80 FR 41685 - Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016

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

Federal Register Volume 80, Issue 135 (July 15, 2015)

Page Range		41685-41966
FR Document		2015-16875

This major proposed rule addresses changes to the physician fee schedule, and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services, as well as changes in the statute.

Federal Register, Volume 80 Issue 135 (Wednesday, July 15, 2015)

[Federal Register Volume 80, Number 135 (Wednesday, July 15, 2015)]
[Proposed Rules]
[Pages 41685-41966]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-16875]

[[Page 41685]]

Vol. 80

Wednesday,

No. 135

July 15, 2015

Part III

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 405, 410, 411, 414, et al.

Medicare Program; Revisions to Payment Policies Under the Physician Fee
Schedule and Other Revisions to Part B for CY 2016; Proposed Rule

Federal Register / Vol. 80 , No. 135 / Wednesday, July 15, 2015 /
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 425, 495

[CMS-1631-P]
RIN 0938-AS40

Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule and Other Revisions to Part B for CY 2016

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

ACTION: Proposed rule.

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SUMMARY: This major proposed rule addresses changes to the physician
fee schedule, and other Medicare Part B payment policies to ensure that
our payment systems are updated to reflect changes in medical practice
and the relative value of services, as well as changes in the statute.

DATES: Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on September 8, 2015.

ADDRESSES: In commenting, please refer to file code CMS-1631-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 www.regulations.gov. Follow the instructions for
``submitting a comment.''
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1631-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-1631-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
4. By hand or courier. If you prefer, you may deliver (by hand or
courier) your written comments before the close of the comment period
to either of the following addresses:
a. For delivery in Washington, DC--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, Room 445-G, Hubert
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC
20201.
(Because access to the interior of the Hubert H. Humphrey Building
is not readily available to persons without federal government
identification, commenters are encouraged to leave their comments in
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing
by stamping in and retaining an extra copy of the comments being
filed.)
b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid
Services, Department of Health and Human Services, 7500 Security
Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address,
please call telephone number (410) 786-7195 in advance to schedule your
arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand
or courier delivery may be delayed and received after the comment
period.

FOR FURTHER INFORMATION CONTACT:
Donta Henson, (410) 786-1947 for any physician payment issues not
identified below.
Gail Addis, (410) 786-4522, for issues related to the refinement
panel.
Chava Sheffield, (410) 786-2298, for issues related to practice
expense methodology, impacts, conversion factors, target, and phase-in
provisions.
Jessica Bruton, (410) 786-5991, for issues related to potentially
misvalued code lists.
Geri Mondowney, (410) 786-4584, for issues related to geographic
practice cost indices and malpractice RVUs.
Ken Marsalek, (410) 786-4502, for issues related to telehealth
services.
Ann Marshall, (410) 786-3059, for issues related to advance care
planning, and for primary care and care management services.
Michael Soracoe, (410) 786-6312, for issues related to the
valuation and coding of the global surgical packages.
Roberta Epps, (410) 786-4503, for issues related to PAMA section
218(a) policy.
Regina Walker-Wren, (410) 786-9160, for issues related to the
``incident to'' proposals.
Lindsey Baldwin, (410) 786-1694, for issues related to valuation of
moderate sedation and colonoscopy services and portable x-ray
transportation fees.
Emily Yoder, (410) 786-1804, for issues related to valuation of
radiation treatment services.
Amy Gruber, (410) 786-1542, for issues related to ambulance payment
policy.
Corinne Axelrod, (410) 786-5620, for issues related to rural health
clinics or federally qualified health centers and payment to
grandfathered tribal FQHCs.
Simone Dennis, (410) 786-8409, for issues related to rural health
clinics HCPCS reporting.
Edmund Kasaitis (410) 786-0477, for issues related to Part B drugs,
biologicals, and biosimilars.
Alesia Hovatter, (410) 786-6861, for issues related to Physician
Compare.
Christine Estella, (410) 786-0485, for issues related to the
physician quality reporting system and the merit-based incentive
payment system.
Alexandra Mugge (410) 786-4457, for issues related to EHR Incentive
Program.
Sarah Arceo, (410) 786-2356) or Patrice Holtz, (410-786-5663) for
issues related to EHR Incentive Program-CPC initiative and meaningful
use aligned reporting.
Christiane LaBonte, (410) 786-7237, for issues related to
comprehensive primary care initiative.
Rabia Khan, (410) 786-9328 or Terri Postma, (410) 786-4169, for
issues related to Medicare Shared Savings Program.
Kimberly Spalding Bush, (410) 786-3232, or Sabrina Ahmed (410) 786-
7499, for issues related to value-based Payment Modifier and Physician
Feedback Program.
Frederick Grabau, (410) 786-0206, for issues related to changes to
opt-out regulations.
Lisa Ohrin Wilson (410) 786-8852, for issues related to physician
self-referral updates.

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: http://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

[[Page 41687]]

Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday
through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an
appointment to view public comments, phone 1-800-743-3951.

Table of Contents

I. Executive Summary and Background
A. Executive Summary
B. Background
II. Provisions of the Proposed Rule for PFS
A. Determination of Practice Expense (PE) Relative Value Units
(RVUs)
B. Determination of Malpractice Relative Value Units (RVUs)
C. Potentially Misvalued Services Under the Physician Fee
Schedule
D. Refinement Panel
E. Improving Payment Accuracy for Primary Care and Care
Management Services
F. Target for Relative Value Adjustments for Misvalued Services
G. Phase-In of Significant RVU Reductions
H. Changes for Computed Tomography (CT) Under the Protecting
Access to Medicare Act of 2014 (PAMA)
I. Valuation of Specific Codes
J. Medicare Telehealth Services
K. Incident to Proposals: Billing Physician as the Supervising
Physician and Ancillary Personnel Requirements
L. Portable X-Ray: Billing of the Transportation Fee
M. Technical Correction: Waiver of Deductible for Anesthesia
Services Furnished on the Same Date as a Planned Screening
Colorectal Cancer Test
III. Other Provisions of the Proposed Regulations
A. Proposed Provisions Associated With the Ambulance Fee
Schedule
B. Chronic Care Management (CCM) Services for Rural Health
Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)
C. Healthcare Common Procedure Coding System (HCPCS) Coding for
Rural Health Clinics (RHCs)
D. Payment to Grandfathered Tribal FQHCs That Were Provider-
Based Clinics on or Before April 7, 2000
E. Part B Drugs--Biosimilars
F. Productivity Adjustment for the Ambulance, Clinical
Laboratory, and DMEPOS Fee Schedules
G. Appropriate Use Criteria for Advanced Diagnostic Imaging
Services
H. Physician Compare Web site
I. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
J. Electronic Clinical Quality Measures (eCQM) and Certification
Criteria and Electronic Health Record (EHR) Incentive Program--
Comprehensive Primary Care (CPC) Initiative and Medicare Meaningful
Use Aligned Reporting
K. Potential Expansion of the Comprehensive Primary Care (CPC)
Initiative
L. Medicare Shared Savings Program
M. Value-Based Payment Modifier and Physician Feedback Program
N. Physician Self-Referral Updates
O. Private Contracting/Opt-Out
IV. Collection of Information Requirements
V. Response to Comments
VI. Regulatory Impact Analysis
Regulations Text

Acronyms

In addition, because of the many organizations and terms to which
we refer by acronym in this proposed rule, we are listing these
acronyms and their corresponding terms in alphabetical order below:
AAA Abdominal aortic aneurysms
ACO Accountable care organization
AMA American Medical Association
ASC Ambulatory surgical center
ATA American Telehealth Association
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program]
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
CAD Coronary artery disease
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic care management
CEHRT Certified EHR technology
CF Conversion factor
CG-CAHPS Clinician and Group Consumer Assessment of Healthcare
Providers and Systems
CLFS Clinical Laboratory Fee Schedule
CNM Certified nurse-midwife
CP Clinical psychologist
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPT [Physicians] Current Procedural Terminology (CPT codes,
descriptions and other data only are copyright 2014 American Medical
Association. All rights reserved.)
CQM Clinical quality measure
CSW Clinical social worker
CT Computed tomography
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DM Diabetes mellitus
DSMT Diabetes self-management training
eCQM Electronic clinical quality measures
EHR Electronic health record
E/M Evaluation and management
EP Eligible professional
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FFS Fee-for-service
FQHC Federally qualified health center
FR Federal Register
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPO Group purchasing organization
GPRO Group practice reporting option
GTR Genetic Testing Registry
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDTF Independent diagnostic testing facility
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
ISO Insurance service office
IWPUT Intensity of work per unit of time
LCD Local coverage determination
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAP Measure Applications Partnership
MAPCP Multi-payer Advanced Primary Care Practice
MAV Measure application validity [process]
MCP Monthly capitation payment
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L.
110-275)
MMA Medicare Prescription Drug, Improvement and Modernization Act of
2003 (Pub. L. 108-173, enacted on December 8, 2003)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MSSP Medicare Shared Savings Program
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
NQS National Quality Strategy
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989 (Pub. L. 101-239)
OBRA '90 Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508)
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
OT Occupational therapy
PA Physician assistant
PAMA Protecting Access to Medicare Act of 2014 (Pub. L. 113-93)
PC Professional component
PCIP Primary Care Incentive Payment
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
PT Physical therapy
PY Performance year
QCDR Qualified clinical data registry
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale

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RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RUC American Medical Association/Specialty Society Relative (Value)
Update Committee
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SIM State Innovation Model
SLP Speech-language pathology
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
UAF Update adjustment factor
UPIN Unique Physician Identification Number
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VM Value-Based Payment Modifier

Addenda Available Only Through the Internet on the CMS Web Site

The PFS Addenda along with other supporting documents and tables
referenced in this proposed rule are available through the Internet on
the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
Click on the link on the left side of the screen titled, ``PFS Federal
Regulations Notices'' for a chronological list of PFS Federal Register
and other related documents. For the CY 2016 PFS proposed rule, refer
to item CMS-1631-P. Readers who experience any problems accessing any
of the Addenda or other documents referenced in this rule and posted on
the CMS Web site identified above should contact Donta Henson at (410)
786-1947.

CPT (Current Procedural Terminology) Copyright Notice

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

I. Executive Summary and Background

A. Executive Summary

1. Purpose
This major proposed rule proposes to revise payment polices under
the Medicare Physician Fee Schedule (PFS) and make other policy changes
related to Medicare Part B payment. These proposed changes would be
applicable to services furnished in CY 2016.
2. Summary of the Major Provisions
The Social Security Act (the Act) requires us to establish payments
under the PFS based on national uniform relative value units (RVUs)
that account for the relative resources used in furnishing a service.
The Act requires that RVUs be established for three categories of
resources: Work, practice expense (PE); and malpractice (MP) expense;
and, that we establish by regulation each year's payment amounts for
all physicians' services paid under the PFS, incorporating geographic
adjustments to reflect the variations in the costs of furnishing
services in different geographic areas. In this major proposed rule, we
establish RVUs for CY 2016 for the PFS, and other Medicare Part B
payment policies, to ensure that our payment systems are updated to
reflect changes in medical practice and the relative value of services,
as well as changes in the statute. In addition, this proposed rule
includes discussions and proposals regarding:
Potentially Misvalued PFS Codes.
Telehealth Services.
Advance Care Planning Services.
Establishing Values for New, Revised, and Misvalued Codes.
Target for Relative Value Adjustments for Misvalued
Services.
Phase-in of Significant RVU Reductions.
``Incident to'' policy.
Portable X-Ray Transportation Fee.
Updating the Ambulance Fee Schedule regulations.
Changes in Geographic Area Delineations for Ambulance
Payment.
Chronic Care Management Services for RHCs and FQHCs.
HCPCS Coding for RHCs.
Payment to Grandfathered Tribal FQHCs that were Provider-
Based Clinics on or before April 7, 2000.
Payment for Biosimilars under Medicare Part B.
Physician Compare Web site.
Physician Quality Reporting System.
Medicare Shared Savings Program.
Electronic Health Record (EHR) Incentive Program.
Value-Based Payment Modifier and the Physician Feedback
Program.
3. Summary of Costs and Benefits
The Act requires that annual adjustments to PFS RVUs may not cause
annual estimated expenditures to differ by more than $20 million from
what they would have been had the adjustments not been made. If
adjustments to RVUs would cause expenditures to change by more than $20
million, we must make adjustments to preserve budget neutrality. These
adjustments can affect the distribution of Medicare expenditures across
specialties. In addition, several proposed changes would affect the
specialty distribution of Medicare expenditures. When considering the
combined impact of work, PE, and MP RVU changes, the projected payment
impacts are small for most specialties; however, the impact would be
larger for a few specialties.
We have determined that this major proposed rule is economically
significant. For a detailed discussion of the economic impacts, see
section VII. of this proposed rule.

B. Background

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

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RVUs, Harvard worked with panels of experts, both inside and outside
the federal government, and obtained input from numerous physician
specialty groups.
As specified in section 1848(c)(1)(A) of the Act, the work
component of physicians' services means the portion of the resources
used in furnishing the service that reflects physician time and
intensity. We establish work RVUs for new, revised and potentially
misvalued codes based on our review of information that generally
includes, but is not limited to, recommendations received from the
American Medical Association/Specialty Society Relative Value Update
Committee (RUC), the Health Care Professionals Advisory Committee
(HCPAC), the Medicare Payment Advisory Commission (MedPAC), and other
public commenters; medical literature and comparative databases; as
well as a comparison of the work for other codes within the Medicare
PFS, and consultation with other physicians and health care
professionals within CMS and the federal government. We also assess the
methodology and data used to develop the recommendations submitted to
us by the RUC and other public commenters, and the rationale for their
recommendations.
b. Practice Expense RVUs
Initially, only the work RVUs were resource-based, and the PE and
MP RVUs were based on average allowable charges. Section 121 of the
Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on
October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and
required us to develop resource-based PE RVUs for each physicians'
service beginning in 1998. We were required to consider general
categories of expenses (such as office rent and wages of personnel, but
excluding malpractice expenses) comprising PEs. The PE RVUs continue to
represent the portion of these resources involved in furnishing PFS
services.
Originally, the resource-based method was to be used beginning in
1998, but section 4505(a) of the Balanced Budget Act of 1997 (Pub. L.
105-33, enacted on August 5, 1997) (BBA) delayed implementation of the
resource-based PE RVU system until January 1, 1999. In addition,
section 4505(b) of the BBA provided for a 4-year transition period from
the charge-based PE RVUs to the resource-based PE RVUs.
We established the resource-based PE RVUs for each physicians'
service in a final rule, published on November 2, 1998 (63 FR 58814),
effective for services furnished in CY 1999. Based on the requirement
to transition to a resource-based system for PE over a 4-year period,
payment rates were not fully based upon resource-based PE RVUs until CY
2002. This resource-based system was based on two significant sources
of actual PE data: the Clinical Practice Expert Panel (CPEP) data and
the AMA's Socioeconomic Monitoring System (SMS) data. (These data
sources are described in greater detail in the CY 2012 final rule with
comment period (76 FR 73033).)
Separate PE RVUs are established for services furnished in facility
settings, such as a hospital outpatient department (HOPD) or an
ambulatory surgical center (ASC), and in nonfacility settings, such as
a physician's office. The nonfacility RVUs reflect all of the direct
and indirect PEs involved in furnishing a service described by a
particular HCPCS code. The difference, if any, in these PE RVUs
generally results in a higher payment in the nonfacility setting
because in the facility settings some costs are borne by the facility.
Medicare's payment to the facility (such as the outpatient prospective
payment system (OPPS) payment to the HOPD) would reflect costs
typically incurred by the facility. Thus, payment associated with those
facility resources is not made under the PFS.
Section 212 of the Balanced Budget Refinement Act of 1999 (Pub. L.
106-113, enacted on November 29, 1999) (BBRA) directed the Secretary of
Health and Human Services (the Secretary) to establish a process under
which we accept and use, to the maximum extent practicable and
consistent with sound data practices, data collected or developed by
entities and organizations to supplement the data we normally collect
in determining the PE component. On May 3, 2000, we published the
interim final rule (65 FR 25664) that set forth the criteria for the
submission of these supplemental PE survey data. The criteria were
modified in response to comments received, and published in the Federal
Register (65 FR 65376) as part of a November 1, 2000 final rule. The
PFS final rules published in 2001 and 2003, respectively, (66 FR 55246
and 68 FR 63196) extended the period during which we would accept these
supplemental data through March 1, 2005.
In the CY 2007 PFS final rule with comment period (71 FR 69624), we
revised the methodology for calculating direct PE RVUs from the top-
down to the bottom-up methodology beginning in CY 2007. We adopted a 4-
year transition to the new PE RVUs. This transition was completed for
CY 2010. In the CY 2010 PFS final rule with comment period, we updated
the practice expense per hour (PE/HR) data that are used in the
calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010,
we began a 4-year transition to the new PE RVUs using the updated PE/HR
data, which was completed for CY 2013.
c. Malpractice RVUs
Section 4505(f) of the BBA amended section 1848(c) of the Act to
require that we implement resource-based MP RVUs for services furnished
on or after CY 2000. The resource-based MP RVUs were implemented in the
PFS final rule with comment period published November 2, 1999 (64 FR
59380). The MP RVUs are based on commercial and physician-owned
insurers' malpractice insurance premium data from all the states, the
District of Columbia, and Puerto Rico. For more information on MP RVUs,
see section II.C. of this proposed rule.
d. Refinements to the RVUs
Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no
less often than every 5 years. Prior to CY 2013, we conducted periodic
reviews of work RVUs and PE RVUs independently. We completed five-year
reviews of work RVUs that were effective for calendar years 1997, 2002,
2007, and 2012.
Although refinements to the direct PE inputs initially relied
heavily on input from the RUC Practice Expense Advisory Committee
(PEAC), the shifts to the bottom-up PE methodology in CY 2007 and to
the use of the updated PE/HR data in CY 2010 have resulted in
significant refinements to the PE RVUs in recent years.
In the CY 2012 PFS final rule with comment period (76 FR 73057), we
finalized a proposal to consolidate reviews of work and PE RVUs under
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued
codes under section 1848(c)(2)(K) of the Act into one annual process.
In addition to the five-year reviews, beginning for CY 2009, CMS,
and the RUC have identified and reviewed a number of potentially
misvalued codes on an annual basis based on various identification
screens. This annual review of work and PE RVUs for potentially
misvalued codes was supplemented by the amendments to section 1848 of
the Act, as enacted by section 3134 of the Affordable Care Act, which
requires the agency to periodically identify, review and adjust values
for potentially misvalued codes.

[[Page 41690]]

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

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x GPCI
MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
Section 1848(b)(2)(B) of the Act specifies that the fee schedule
amounts for anesthesia services are to be based on a uniform relative
value guide, with appropriate adjustment of an anesthesia conversion
factor, in a manner to assure that fee schedule amounts for anesthesia
services are consistent with those for other services of comparable
value. Therefore, there is a separate fee schedule methodology for
anesthesia services. Specifically, we establish a separate conversion
factor for anesthesia services and we utilize the uniform relative
value guide, or base units, as well as time units, to calculate the fee
schedule amounts for anesthesia services. Since anesthesia services are
not valued using RVUs, a separate methodology for locality adjustments
is also necessary. This involves an adjustment to the national
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
Section 220(d) of the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93, enacted on April 1, 2014) added a new
subparagraph (O) to section 1848(c)(2) of the Act to establish an
annual target for reductions in PFS expenditures resulting from
adjustments to relative values of misvalued codes. If the estimated net
reduction in expenditures for a year is equal to or greater than the
target for that year, the provision specifies that reduced expenditures
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS. The provision also specifies that the
amount by which such reduced expenditures exceed the target for a given
year shall be treated as a reduction in expenditures for the subsequent
year for purposes of determining whether the target for the subsequent
year has been met. The provision also specifies that an amount equal to
the difference between the target and the estimated net reduction,
called the target recapture amount shall not be taken into account when
applying the budget neutrality requirements specified in section
1848(c)(2)(B)(ii)(II) of the Act. The PAMA originally applied the
target to CYs 2017 through 2020 and set the target amount to 0.5
percent of the estimated amount of expenditures under the PFS for each
of those 4 years.
More recently, section 202 of the Achieving a Better Life
Experience Act of 2014 (ABLE) (Division B of Pub. L. 113-295, enacted
December 19, 2014) accelerated the application of the target, amending
section 1848(c)(2)(O) of the Act to specify that targets would apply
for CYs 2016, 2017, and 2018 and set a 1 percent target for CY 2016 and
0.5 percent for CYs 2017 and 2018. The implementation of the target
legislation is discussed in section II.F. of this proposed rule.
Section 1848(c)(7) of the Act, as added by section 220(e) of the
PAMA, specifies that for services that are not new or revised codes, if
the total RVUs for a service for a year would otherwise be decreased by
an estimated 20 percent or more as compared to the total RVUs for the
previous year, the applicable adjustments in work, PE, and MP RVUs
shall be phased-in over a 2-year period. Although section 220(e) of the
PAMA required the phase-in of RVU reductions of 20 percent or more to
begin for 2017, section 202 of the ABLE Act now requires the phase-in
to begin in CY 2016. The implementation of the phase-in legislation is
discussed in section II.G. of this proposed rule.
Section 218(a) of the PAMA adds a new section 1834(p) to the
statute. Section 1834(p) requires reductions in payment for the
technical component (TC) (and the TC of the global fee) of the PFS
service and in the hospital OPPS payment (5 percent in 2016, and 15
percent in 2017 and subsequent years) for computed tomography (CT)
services (identified as of January 1, 2014 by HCPCS codes 70450-70498,
71250-71275, 72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-
74178, 74261-74263, and 75571-75574, and succeeding codes) furnished
using equipment that does not meet each of the attributes of the
National Electrical Manufacturers Association (NEMA) Standard XR-29-
2013, entitled ``Standard Attributes on CT Equipment Related to Dose
Optimization and Management.'' The implementation of section 218(a) of
the PAMA is discussed in section II.H. of this proposed rule.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
(Pub. L. 114-10, enacted on April 16, 2015) makes several changes to
the statute, including but not limited to:
(1) Repealing the sustainable growth rate (SGR) update methodology
for physicians' services.
(2) Revising the PFS update for 2015 and subsequent years.
(3) Establishing a Merit-based Incentive Payment System (MIPS)
under which eligible professionals (initially including physicians,
physician assistants, nurse practitioners, clinical nurse specialists,
and certified registered nurse anesthetists) receive annual payment
increases or decreases based on their performance in a prior period.
These and other MACRA provisions are discussions in various sections of
this proposed rule. Please refer to the table of contents for the
location of the various MACRA provision discussions.

II. Provisions of the Proposed Rule for PFS

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

1. Overview
Practice expense (PE) is the portion of the resources used in
furnishing a service that reflects the general categories of physician
and practitioner expenses, such as office rent and personnel wages, but
excluding malpractice expenses, as specified in section 1848(c)(1)(B)
of the Act. As required by section 1848(c)(2)(C)(ii) of the Act, we use
a resource-based system for determining PE RVUs for each physicians'
service. We develop PE RVUs by considering the direct and indirect
practice resources involved in furnishing each service. Direct expense
categories include clinical labor, medical supplies, and medical

[[Page 41691]]

equipment. Indirect expenses include administrative labor, office
expense, and all other expenses. The sections that follow provide more
detailed information about the methodology for translating the
resources involved in furnishing each service into service-specific PE
RVUs. We refer readers to the CY 2010 PFS final rule with comment
period (74 FR 61743 through 61748) for a more detailed explanation of
the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
We determine the direct PE for a specific service by adding the
costs of the direct resources (that is, the clinical staff, medical
supplies, and medical equipment) typically involved with furnishing
that service. The costs of the resources are calculated using the
refined direct PE inputs assigned to each CPT code in our PE database,
which are generally based on our review of recommendations received
from the RUC and those provided in response to public comment periods.
For a detailed explanation of the direct PE methodology, including
examples, we refer readers to the Five-Year Review of Work Relative
Value Units under the PFS and Proposed Changes to the Practice Expense
Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final
rule with comment period (71 FR 69629).
b. Indirect Practice Expense per Hour Data
We use survey data on indirect PEs incurred per hour worked in
developing the indirect portion of the PE RVUs. Prior to CY 2010, we
primarily used the practice expense per hour (PE/HR) by specialty that
was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). The
AMA administered a new survey in CY 2007 and CY 2008, the Physician
Practice Expense Information Survey (PPIS). The PPIS is a
multispecialty, nationally representative, PE survey of both physicians
and nonphysician practitioners (NPPs) paid under the PFS using a survey
instrument and methods highly consistent with those used for the SMS
and the supplemental surveys. The PPIS gathered information from 3,656
respondents across 51 physician specialty and health care professional
groups. We believe the PPIS is the most comprehensive source of PE
survey information available. We used the PPIS data to update the PE/HR
data for the CY 2010 PFS for almost all of the Medicare-recognized
specialties that participated in the survey.
When we began using the PPIS data in CY 2010, we did not change the
PE RVU methodology itself or the manner in which the PE/HR data are
used in that methodology. We only updated the PE/HR data based on the
new survey. Furthermore, as we explained in the CY 2010 PFS final rule
with comment period (74 FR 61751), because of the magnitude of payment
reductions for some specialties resulting from the use of the PPIS
data, we transitioned its use over a 4-year period from the previous PE
RVUs to the PE RVUs developed using the new PPIS data. As provided in
the CY 2010 PFS final rule with comment period (74 FR 61751), the
transition to the PPIS data was complete for CY 2013. Therefore, PE
RVUs from CY 2013 forward are developed based entirely on the PPIS
data, except as noted in this section.
Section 1848(c)(2)(H)(i) of the Act requires us to use the medical
oncology supplemental survey data submitted in 2003 for oncology drug
administration services. Therefore, the PE/HR for medical oncology,
hematology, and hematology/oncology reflects the continued use of these
supplemental survey data.
Supplemental survey data on independent labs from the College of
American Pathologists were implemented for payments beginning in CY
2005. Supplemental survey data from the National Coalition of Quality
Diagnostic Imaging Services (NCQDIS), representing independent
diagnostic testing facilities (IDTFs), were blended with supplementary
survey data from the American College of Radiology (ACR) and
implemented for payments beginning in CY 2007. Neither IDTFs, nor
independent labs, participated in the PPIS. Therefore, we continue to
use the PE/HR that was developed from their supplemental survey data.
Consistent with our past practice, the previous indirect PE/HR
values from the supplemental surveys for these specialties were updated
to CY 2006 using the MEI to put them on a comparable basis with the
PPIS data.
We also do not use the PPIS data for reproductive endocrinology and
spine surgery since these specialties currently are not separately
recognized by Medicare, nor do we have a method to blend the PPIS data
with Medicare-recognized specialty data.
Previously, we established PE/HR values for various specialties
without SMS or supplemental survey data by crosswalking them to other
similar specialties to estimate a proxy PE/HR. For specialties that
were part of the PPIS for which we previously used a crosswalked PE/HR,
we instead used the PPIS-based PE/HR. We continue previous crosswalks
for specialties that did not participate in the PPIS. However,
beginning in CY 2010 we changed the PE/HR crosswalk for portable x-ray
suppliers from radiology to IDTF, a more appropriate crosswalk because
these specialties are more similar to each other for work time.
For registered dietician services, the resource-based PE RVUs have
been calculated in accordance with the final policy that crosswalks the
specialty to the ``All Physicians'' PE/HR data, as adopted in the CY
2010 PFS final rule with comment period (74 FR 61752) and discussed in
more detail in the CY 2011 PFS final rule with comment period (75 FR
73183).
For CY 2016, we have incorporated the available utilization data
for interventional cardiology, which became a recognized Medicare
specialty during 2014. We are proposing to use a proxy PE/HR value for
interventional cardiology, as there are no PPIS data for this
specialty, by crosswalking the PE/HR for from Cardiology, since the
specialties furnish similar services in the Medicare claims data. The
proposed change is reflected in the ``PE/HR'' file available on the CMS
Web site under the supporting data files for the CY 2016 PFS proposed
rule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html.
c. Allocation of PE to Services
To establish PE RVUs for specific services, it is necessary to
establish the direct and indirect PE associated with each service.
(1) Direct Costs
The relative relationship between the direct cost portions of the
PE RVUs for any two services is determined by the relative relationship
between the sum of the direct cost resources (that is, the clinical
staff, medical supplies, and medical equipment) typically involved with
furnishing each of the services. The costs of these resources are
calculated from the refined direct PE inputs in our PE database. For
example, if one service has a direct cost sum of $400 from our PE
database and another service has a direct cost sum of $200, the direct
portion of the PE RVUs of the first service would be twice as much as
the direct portion of the PE RVUs for the second service.
(2) Indirect Costs
Section II.A.2.b. of this proposed rule describes the current data
sources for specialty-specific indirect costs used in our PE
calculations. We allocated the

[[Page 41692]]

indirect costs to the code level on the basis of the direct costs
specifically associated with a code and the greater of either the
clinical labor costs or the work RVUs. We also incorporated the survey
data described earlier in the PE/HR discussion. The general approach to
developing the indirect portion of the PE RVUs is as follows:
For a given service, we use the direct portion of the PE
RVUs calculated as previously described and the average percentage that
direct costs represent of total costs (based on survey data) across the
specialties that furnish the service to determine an initial indirect
allocator. In other words, the initial indirect allocator is calculated
so that the direct costs equal the average percentage of direct costs
of those specialties furnishing the service. For example, if the direct
portion of the PE RVUs for a given service is 2.00 and direct costs, on
average, represented 25 percent of total costs for the specialties that
furnished the service, the initial indirect allocator would be
calculated so that it equals 75 percent of the total PE RVUs. Thus, in
this example, the initial indirect allocator would equal 6.00,
resulting in a total PE RVUs of 8.00 (2.00 is 25 percent of 8.00 and
6.00 is 75 percent of 8.00).
Next, we add the greater of the work RVUs or clinical
labor portion of the direct portion of the PE RVUs to this initial
indirect allocator. In our example, if this service had work RVUs of
4.00 and the clinical labor portion of the direct PE RVUs was 1.50, we
would add 4.00 (since the 4.00 work RVUs are greater than the 1.50
clinical labor portion) to the initial indirect allocator of 6.00 to
get an indirect allocator of 10.00. In the absence of any further use
of the survey data, the relative relationship between the indirect cost
portions of the PE RVUs for any two services would be determined by the
relative relationship between these indirect cost allocators. For
example, if one service had an indirect cost allocator of 10.00 and
another service had an indirect cost allocator of 5.00, the indirect
portion of the PE RVUs of the first service would be twice as great as
the indirect portion of the PE RVUs for the second service.
Next, we incorporate the specialty-specific indirect PE/HR
data into the calculation. In our example, if, based on the survey
data, the average indirect cost of the specialties furnishing the first
service with an allocator of 10.00 was half of the average indirect
cost of the specialties furnishing the second service with an indirect
allocator of 5.00, the indirect portion of the PE RVUs of the first
service would be equal to that of the second service.
(4) Facility and Nonfacility Costs
For procedures that can be furnished in a physician's office, as
well as in a hospital or other facility setting, we establish two PE
RVUs: facility and nonfacility. The methodology for calculating PE RVUs
is the same for both the facility and nonfacility RVUs, but is applied
independently to yield two separate PE RVUs. Because in calculating the
PE RVUs for services furnished in a facility, we do not include
resources that would generally not be provided by physicians when
furnishing the service in a facility, the facility PE RVUs are
generally lower than the nonfacility PE RVUs. Medicare makes a separate
payment to the facility for its costs of furnishing a service.
(5) Services With Technical Components (TCs) and Professional
Components (PCs)
Diagnostic services are generally comprised of two components: A
professional component (PC); and a technical component (TC). The PC and
TC may be furnished independently or by different providers, or they
may be furnished together as a ``global'' service. When services have
separately billable PC and TC components, the payment for the global
service equals the sum of the payment for the TC and PC. To achieve
this we use a weighted average of the ratio of indirect to direct costs
across all the specialties that furnish the global service, TCs, and
PCs; that is, we apply the same weighted average indirect percentage
factor to allocate indirect expenses to the global service, PCs, and
TCs for a service. (The direct PE RVUs for the TC and PC sum to the
global.)
(6) PE RVU Methodology
For a more detailed description of the PE RVU methodology, we refer
readers to the CY 2010 PFS final rule with comment period (74 FR 61745
through 61746).
(a) Setup File
First, we create a setup file for the PE methodology. The setup
file contains the direct cost inputs, the utilization for each
procedure code at the specialty and facility/nonfacility place of
service level, and the specialty-specific PE/HR data calculated from
the surveys.
(b) Calculate the Direct Cost PE RVUs
Sum the costs of each direct input.
Step 1: Sum the direct costs of the inputs for each service. Apply
a scaling adjustment to the direct inputs.
Step 2: Calculate the aggregate pool of direct PE costs for the
current year. Under our current methodology, we first multiply the
current year's conversion factor by the product of the current year's
PE RVUs and utilization for each service to arrive at the aggregate
pool of total PE costs (Step 2a). We then calculate the average direct
percentage of the current pool of PE RVUs (using a weighted average of
the survey data for the specialties that furnish each service (Step
2b).) We then multiply the result of 2a by the result of 2b to arrive
at the aggregate pool of direct PE costs for the current year. For CY
2016, we are proposing a technical improvement to step 2a of this
calculation. In place of the step 2a calculation described above, we
propose to set the aggregate pool of PE costs equal to the product of
the ratio of the current aggregate PE RVUs to current aggregate work
RVUs and the proposed aggregate work RVUs. Historically, in allowing
the current PE RVUs to determine the size of the base PE pool in the PE
methodology, we have assumed that the relationship of PE RVUs to work
RVUs is constant from year to year. Since this is not ordinarily the
case, by not considering the proposed aggregate work RVUs in
determining the size of the base PE pool, we have introduced some minor
instability from year to year in the relative shares of work, PE, and
MP RVUs. While this proposed modification would result in greater
stability in the relationship among the work and PE RVU components in
the aggregate, we do not anticipate it will affect the distribution of
PE RVUs across specialties. The PE RVUs in addendum B of this proposed
rule with comment period reflect this proposed refinement to the PE
methodology.
Step 3: Calculate the aggregate pool of direct PE costs for use in
ratesetting. This is the product of the aggregate direct costs for all
services from Step 1 and the utilization data for that service.
Step 4: Using the results of Step 2 and Step 3, calculate a direct
PE scaling adjustment to ensure that the aggregate pool of direct PE
costs calculated in Step 3 does not vary from the aggregate pool of
direct PE costs for the current year. Apply the scaling factor to the
direct costs for each service (as calculated in Step 1).
Step 5: Convert the results of Step 4 to an RVU scale for each
service. To do this, divide the results of Step 4 by the CF. Note that
the actual value of the CF used in this calculation does not influence
the final direct cost PE RVUs, as long as the same CF is used in Step 2
and Step 5. Different CFs will result in different direct PE scaling
factors, but

[[Page 41693]]

this has no effect on the final direct cost PE RVUs since changes in
the CFs and changes in the associated direct scaling factors offset one
another.
(c) Create the Indirect Cost PE RVUs
Create indirect allocators.
Step 6: Based on the survey data, calculate direct and indirect PE
percentages for each physician specialty.
Step 7: Calculate direct and indirect PE percentages at the service
level by taking a weighted average of the results of Step 6 for the
specialties that furnish the service. Note that for services with TCs
and PCs, the direct and indirect percentages for a given service do not
vary by the PC, TC, and global service.
Historically, we have used the specialties that furnish the service
in the most recent full year of Medicare claims data (crosswalked to
the current year set of codes) to determine which specialties furnish
individual procedures. For example, for CY 2015 ratesetting, we used
the mix of specialties that furnished the services in the CY 2013
claims data to determine the specialty mix assigned to each code. While
we believe that there are clear advantages to using the most recent
available data in making these determinations, we have also found that
using a single year of data contributes to greater year-to-year
instability in PE RVUs for individual codes and often creates extreme,
annual fluctuations for low-volume services, as well as delayed
fluctuations for some services described by new codes once claims data
for those codes becomes available.
We believe that using an average of the three most recent years of
available data may increase stability of PE RVUs and mitigate code-
level fluctuations for both the full range of PFS codes, and for new
and low-volume codes in particular. Therefore, we are proposing to
refine this step of the PE methodology to use an average of the 3 most
recent years of available Medicare claims data to determine the
specialty mix assigned to each code. The PE RVUs in Addendum B of the
CMS Web site reflect this proposed refinement to the PE methodology.
Step 8: Calculate the service level allocators for the indirect PEs
based on the percentages calculated in Step 7. The indirect PEs are
allocated based on the three components: The direct PE RVUs; the
clinical PE RVUs; and the work RVUs. For most services the indirect
allocator is: Indirect PE percentage * (direct PE RVUs/direct
percentage) + work RVUs.
There are two situations where this formula is modified:
If the service is a global service (that is, a service
with global, professional, and technical components), then the indirect
PE allocator is: Indirect percentage (direct PE RVUs/direct percentage)
+ clinical labor PE RVUs + work RVUs.
If the clinical labor PE RVUs exceed the work RVUs (and
the service is not a global service), then the indirect allocator is:
Indirect PE percentage (direct PE RVUs/direct percentage) + clinical
labor PE RVUs.
(Note: For global services, the indirect PE allocator is based on
both the work RVUs and the clinical labor PE RVUs. We do this to
recognize that, for the PC service, indirect PEs will be allocated
using the work RVUs, and for the TC service, indirect PEs will be
allocated using the direct PE RVUs and the clinical labor PE RVUs. This
also allows the global component RVUs to equal the sum of the PC and TC
RVUs.)
For presentation purposes in the examples in Table 1, the formulas
were divided into two parts for each service.
The first part does not vary by service and is the
indirect percentage (direct PE RVUs/direct percentage).
The second part is either the work RVU, clinical labor PE
RVU, or both depending on whether the service is a global service and
whether the clinical PE RVUs exceed the work RVUs (as described earlier
in this step).
Apply a scaling adjustment to the indirect allocators.
Step 9: Calculate the current aggregate pool of indirect PE RVUs by
multiplying the result of step 2a (as calculated with the proposed
change) by the average indirect PE percentage from the survey data.
Step 10: Calculate an aggregate pool of indirect PE RVUs for all
PFS services by adding the product of the indirect PE allocators for a
service from Step 8 and the utilization data for that service.
Step 11: Using the results of Step 9 and Step 10, calculate an
indirect PE adjustment so that the aggregate indirect allocation does
not exceed the available aggregate indirect PE RVUs and apply it to
indirect allocators calculated in Step 8.
Calculate the indirect practice cost index.
Step 12: Using the results of Step 11, calculate aggregate pools of
specialty-specific adjusted indirect PE allocators for all PFS services
for a specialty by adding the product of the adjusted indirect PE
allocator for each service and the utilization data for that service.
Step 13: Using the specialty-specific indirect PE/HR data,
calculate specialty-specific aggregate pools of indirect PE for all PFS
services for that specialty by adding the product of the indirect PE/HR
for the specialty, the work time for the service, and the specialty's
utilization for the service across all services furnished by the
specialty.
Step 14: Using the results of Step 12 and Step 13, calculate the
specialty-specific indirect PE scaling factors.
Step 15: Using the results of Step 14, calculate an indirect
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor
for the entire PFS.
Step 16: Calculate the indirect practice cost index at the service
level to ensure the capture of all indirect costs. Calculate a weighted
average of the practice cost index values for the specialties that
furnish the service. (Note: For services with TCs and PCs, we calculate
the indirect practice cost index across the global service, PCs, and
TCs. Under this method, the indirect practice cost index for a given
service (for example, echocardiogram) does not vary by the PC, TC, and
global service.)
Step 17: Apply the service level indirect practice cost index
calculated in Step 16 to the service level adjusted indirect allocators
calculated in Step 11 to get the indirect PE RVUs.
(d) Calculate the Final PE RVUs
Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
The final PE BN adjustment is calculated by comparing the results of
Step 18 to the proposed aggregate work RVUs scaled by the ratio of
current aggregate PE and work RVUs, consistent with the proposed
changes in Steps 2 and 9. This final BN adjustment is required to
redistribute RVUs from step 18 to all PE RVUs in the PFS, and because
certain specialties are excluded from the PE RVU calculation for
ratesetting purposes, but we note that all specialties are included for
purposes of calculating the final BN adjustment. (See ``Specialties
excluded from ratesetting calculation'' later in this section.)
(e) Setup File Information
Specialties excluded from ratesetting calculation: For the
purposes of calculating the PE RVUs, we exclude certain specialties,
such as certain nonphysician practitioners paid at a percentage of the
PFS and low-volume specialties, from the calculation. These specialties
are included for the purposes of calculating the BN adjustment. They
are displayed in Table 1.

[[Page 41694]]

Table 1--Specialties Excluded from Ratesetting Calculation
------------------------------------------------------------------------
Specialty code Specialty description
------------------------------------------------------------------------
49..................... Ambulatory surgical center.
50..................... Nurse practitioner.
51..................... Medical supply company with certified
orthotist.
52..................... Medical supply company with certified
prosthetist.
53..................... Medical supply company with certified
prosthetist[dash]orthotist.
54..................... Medical supply company not included in 51, 52,
or 53.
55..................... Individual certified orthotist.
56..................... Individual certified prosthetist.
57..................... Individual certified
prosthetist[dash]orthotist.
58..................... Medical supply company with registered
pharmacist.
59..................... Ambulance service supplier, e.g., private
ambulance companies, funeral homes, etc.
60..................... Public health or welfare agencies.
61..................... Voluntary health or charitable agencies.
73..................... Mass immunization roster biller.
74..................... Radiation therapy centers.
87..................... All other suppliers (e.g., drug and department
stores).
88..................... Unknown supplier/provider specialty.
89..................... Certified clinical nurse specialist.
96..................... Optician.
97..................... Physician assistant.
A0..................... Hospital.
A1..................... SNF.
A2..................... Intermediate care nursing facility.
A3..................... Nursing facility, other.
A4..................... HHA.
A5..................... Pharmacy.
A6..................... Medical supply company with respiratory
therapist.
A7..................... Department store.
B2..................... Pedorthic personnel.
B3..................... Medical supply company with pedorthic
personnel.
------------------------------------------------------------------------

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

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

[[Page 41695]]

66................................... Team Surgeons.......... 33%.................... 33%.
----------------------------------------------------------------------------------------------------------------

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

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

Where:

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

Usage: We currently use an equipment utilization rate assumption of
50 percent for most equipment, with the exception of expensive
diagnostic imaging equipment, for which we use a 90 percent assumption
as required by section 1848(b)(4)(C) of the Act. We also direct the
reader to section II.5.b of this proposed rule for a discussion of our
proposed change in the utilization rate assumption for the linear
accelerator used in furnishing radiation treatment services.
Maintenance: This factor for maintenance was proposed and finalized
during rulemaking for CY 1998 PFS (62 FR 33164). Several stakeholders
have suggested that this maintenance factor assumption should be
variable, similar to other assumptions in the equipment cost per minute
calculation. In CY 2015 rulemaking, we solicited comments regarding the
availability of reliable data on maintenance costs that vary for
particular equipment items. We received several comments about variable
maintenance costs, and in reviewing the information offered in those
comments, it is clear that the relationship between maintenance costs
and the price of equipment is not necessarily uniform across equipment.
However, based on our review of comments, we have been unable to
identify a systematic way of varying the maintenance cost assumption
relative to the price or useful life of equipment. Therefore, in order
to accommodate a variable, as opposed to a standard, maintenance rate
within the equipment cost per minute calculation, we believe we would
have to gather and maintain valid data on the maintenance costs for
each equipment item in the direct PE input database, much like we do
for price and useful life.
Given our longstanding difficulties in acquiring accurate pricing
information for equipment items, we are seeking comment on whether
adding another item-specific financial variable for equipment costs
will be likely to increase the accuracy of PE RVUs across the PFS. We
note that most of the information for maintenance costs we have
received is for capital equipment, and for the most part, this
information has been limited to single invoices. Like the invoices for
the equipment items themselves, we do not believe that very small
numbers of voluntarily submitted invoices are likely to reflect typical
costs for all of the same reasons we have discussed in previous
rulemaking. We note that some commenters submitted high-level summary
data from informal surveys but we currently have no means to validate
that data. Therefore, we continue to seek a source of publicly
available data on actual maintenance costs for medical equipment to
improve the accuracy of the equipment costs used in developing PE RVUs.
Interest Rate: In the CY 2013 final rule with comment period (77 FR
68902), we updated the interest rates used in developing an equipment
cost per minute calculation. The interest rate was based on the Small
Business Administration (SBA) maximum interest rates for different
categories of loan size (equipment cost) and maturity (useful life).
The interest rates are listed in Table 3. (See 77 FR 68902 for a
thorough discussion of this issue.)

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

[[Page 41696]]

Table 4--Calculation of PE RVUS Under Methodology for Selected Codes
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
33533 CABG,
99213 Office arterial, 71020 chest x- 71020-TC chest 71020-26 chest 93000 ECG, 93005 ECG, 93010 ECG,
Step Source Formula visit, est single ray x-ray, x-ray, complete, tracing report
nonfacility facility nonfacility nonfacility nonfacility nonfacility nonfacility nonfacility
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Labor cost (Lab)............... Step 1............... AMA.................. ..................... 13.32 77.52 5.74 5.74 0 5.1 5.1 0
(2) Supply cost (Sup).............. Step 1............... AMA.................. ..................... 2.98 7.34 0.53 0.53 0 1.19 1.19 0
(3) Equipment cost (Eqp)........... Step 1............... AMA.................. ..................... 0.17 0.58 7.08 7.08 0 0.09 0.09 0
(4) Direct cost (Dir).............. Step 1............... ..................... =(1)+(2)+(3)......... 16.48 85.45 13.36 13.36 0 6.38 6.38 0
(5) Direct adjustment (Dir. Adj.).. Steps 2-4............ See footnote*........ ..................... 0.6003 0.6003 0.6003 0.6003 0.6003 0.6003 0.6003 0.6003
(6) Adjusted Labor................. Steps 2-4............ =Labor * Dir Adj..... =(1)*(5)............. 8 46.53 3.45 3.45 0 3.06 3.06 0
(7) Adjusted Supplies.............. Steps 2-4............ =Eqp * Dir Adj....... =(2)*(5)............. 1.79 4.41 0.32 0.32 0 0.72 0.72 0
(8) Adjusted Equipment............. Steps 2-4............ =Sup * Dir Adj....... =(3)*(5)............. 0.10 0.35 4.25 4.25 0 0.05 0.05 0
(9) Adjusted Direct................ Steps 2-4............ ..................... =(6)+(7)+(8)......... 9.89 51.29 8.02 8.02 0 3.83 3.83 0
(10) Conversion Factor (CF)........ Step 5............... PFS.................. ..................... 35.9335 35.9335 35.9335 35.9335 35.9335 35.9335 35.9335 35.9335
(11) Adj. labor cost converted..... Step 5............... =(Lab * Dir Adj)/CF.. =(6)/(10)............ 0.22 1.3 0.1 0.1 0 0.09 0.09 0
(12) Adj. supply cost converted.... Step 5............... =(Sup * Dir Adj)/CF.. =(7)/(10)............ 0.05 0.12 0.01 0.01 0 0.02 0.02 0
(13) Adj. equipment cost converted. Step 5............... =(Eqp * Dir Adj)/CF.. =(8)/(10)............ 0 0.01 0.12 0.12 0 0 0 0
(14) Adj. direct cost converted.... Step 5............... ..................... =(11)+(12)+(13)...... 0.28 1.43 0.22 0.22 0 0.11 0.11 0
(15) Work RVU...................... Setup File........... PFS.................. ..................... 0.97 33.75 0.22 0 0.22 0.17 0 0.17
(16) Dir_pct....................... Steps 6,7............ Surveys.............. ..................... 0.25 0.17 0.29 0.29 0.29 0.29 0.29 0.29
(17) Ind_pct....................... Steps 6,7............ Surveys.............. ..................... 0.75 0.83 0.71 0.71 0.71 0.71 0.71 0.71
(18) Ind. Alloc. Formula (1st part) Step 8............... See Step 8........... ..................... (14)/ (14)/ (14)/ (14)/ (14)/ (14)/ (14)/ (14)/
(16)*(17) (16)*(17) (16)*(17) (16)*(17) (16)*(17) (16)*(17) (16)*(17) (16)*(17)
(19) Ind. Alloc.(1st part)......... Step 8............... ..................... See 18............... 0.83 6.75 0.54 0.54 0 0.26 0.26 0
(20) Ind. Alloc. Formula (2nd part) Step 8............... See Step 8........... ..................... (15) (15) (15+11) (11) (15) (15+11) (11) (15)
(21) Ind. Alloc.(2nd part)......... Step 8............... ..................... See 20............... 0.97 33.75 0.32 0.1 0.22 0.26 0.09 0.17
(22) Indirect Allocator (1st + 2nd) Step 8............... ..................... =(19)+(21)........... 1.8 40.50 0.86 0.64 0.22 0.52 0.35 0.17
(23) Indirect Adjustment (Ind. Steps 9-11........... See Footnote**....... ..................... 0.3811 0.3811 0.3811 0.3811 0.3811 0.3811 0.3811 0.3811
Adj.).
(24) Adjusted Indirect Allocator... Steps 9-11........... =Ind Alloc * Ind Adj. ..................... 0.69 15.43 0.33 0.24 0.08 0.2 0.13 0.06
(25) Ind. Practice Cost Index Steps 12-16.......... ..................... ..................... 1.07 0.76 0.98 0.98 0.98 0.9 0.9 0.9
(IPCI).
(26) Adjusted Indirect............. Step 17.............. = Adj.Ind Alloc * PCI =(24)*(25)........... 0.73 11.68 0.32 0.24 0.08 0.18 0.12 0.06
(27) Final PE RVU.................. Step 18.............. =(Adj Dir + Adj Ind) =((14)+(26)) * Other 1.01 13.15 0.54 0.46 0.08 0.28 0.23 0.06
* Other Adj. Adj).
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.
Notes: PE RVUs above (row 27), may not match Addendum B due to rounding.
The use of any particular conversion factor (CF) in the table to illustrate the PE Calculation has no effect on the resulting RVUs.
*The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [step2]/[step3]; **The indirect adj =[current pe rvus * avg ind pct]/[sum of ind allocators]=[step9]/[step10]

[[Page 41697]]

c. Changes to Direct PE Inputs for Specific Services
In this section, we discuss other CY 2016 proposals related to
particular PE inputs. The proposed direct PE inputs are included in the
proposed CY 2016 direct PE input database, which is available on the
CMS Web site under downloads for the CY 2016 PFS proposed rule with
comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
(1) PE Inputs for Digital Imaging Services
Prior to CY 2015 rulemaking, the RUC provided a recommendation
regarding the PE inputs for digital imaging services. Specifically, the
RUC recommended that we remove supply and equipment items associated
with film technology from a list of codes since these items are no
longer typical resource inputs. The RUC also recommended that the
Picture Archiving and Communication System (PACS) equipment be included
for these imaging services since these items are now typically used in
furnishing imaging services. However, since we did not receive any
invoices for the PACS system, we were unable to determine the
appropriate pricing to use for the inputs. For CY 2015, we proposed,
and finalized our proposal, to remove the film supply and equipment
items, and to create a new equipment item as a proxy for the PACS
workstation as a direct expense. We used the current price associated
with ED021 (computer, desktop, w-monitor) to price the new item, ED050
(PACS Workstation Proxy), pending receipt of invoices to facilitate
pricing specific to the PACS workstation.
Subsequent to establishing payment rates for CY 2015, we received
information from several stakeholders regarding pricing for items
related to the digital acquisition and storage of images. Some of these
stakeholders submitted information that included prices for items
clearly categorized as indirect costs within the established PE
methodology and equivalent to the storage mechanisms for film.
Additionally, some of the invoices we received included other products
(like training and maintenance costs) in addition to the equipment
items, and there was no distinction on these invoices between the
prices for the equipment items themselves and the related services.
However, we did receive invoices from one stakeholder that facilitated
a proposed price update for the PACS workstation. Therefore, we are
proposing to update the price for the PACS workstation to $5,557 from
the current price of $2,501 since the latter price was based on the
proxy item and the former based on submitted invoices. The PE RVUs in
Addendum B on the CMS Web site reflect the updated price.
In addition to the workstation used by the clinical staff acquiring
the images and furnishing the technical component of the services, a
stakeholder also submitted more detailed information regarding a
workstation used by the practitioner interpreting the image in
furnishing the professional component of many of these services. As we
stated in the CY 2015 final rule with comment period (79 FR 67563), we
generally believe that workstations used by these practitioners are
more accurately considered indirect costs associated with the
professional component of the service. However, we understand that the
professional workstations for interpretation of digital images are
similar in principle to some of the previous film inputs incorporated
into the global and technical components of the codes. Given that many
of these services are reported globally in the nonfacility setting, we
believe it may be appropriate to include these costs as direct inputs
for the associated HCPCS codes. Based on our established methodology,
these costs would be incorporated into the PE RVUs of the global and
technical component of the HCPCS code. We are seeking comment on
whether including the professional workstation as a direct PE input for
these codes would be appropriate, given that the resulting PE RVUs
would be assigned to the global and technical components of the codes.
Another stakeholder expressed concern about the changes in direct
PE inputs for CPT code 76377, (3D radiographic procedure with
computerized image post-processing), that were proposed and finalized
in CY 2015 rulemaking as part of the film to digital change. Based on a
recommendation from the RUC, we removed the input called ``computer
workstation, 3D reconstruction CT-MR'' from the direct PE input
database and assigned the associated minutes to the proxy for the PACS
workstation. We are seeking comment from stakeholders, including the
RUC, about whether or not the PACS workstation used in in imaging codes
is the same workstation that is used in the postprocessing described by
CPT code 76377, or if more specific workstation should be incorporated
in the direct PE input database . . .
(2) Standardization of Clinical Labor Tasks
As we noted in PFS rulemaking for CY 2015, we continue to work on
revisions to the direct PE input database to provide the number of
clinical labor minutes assigned for each task for every code in the
database instead of only including the number of clinical labor minutes
for the pre-service, service, and post-service periods for each code.
In addition to increasing the transparency of the information used to
set PE RVUs, this improvement would allow us to compare clinical labor
times for activities associated with services across the PFS, which we
believe is important to maintaining the relativity of the direct PE
inputs. This information will facilitate the identification of the
usual numbers of minutes for clinical labor tasks and the
identification of exceptions to the usual values. It will also allow
for greater transparency and consistency in the assignment of equipment
minutes based on clinical labor times. Finally, we believe that the
information can be useful in maintaining standard times for particular
clinical labor tasks that can be applied consistently to many codes as
they are valued over several years, similar in principle to the use of
physician pre-service time packages. We believe such standards will
provide greater consistency among codes that share the same clinical
labor tasks and could improve relativity of values among codes. For
example, as medical practice and technologies change over time, changes
in the standards could be updated at once for all codes with the
applicable clinical labor tasks, instead of waiting for individual
codes to be reviewed.
While this work is not yet complete, we anticipate completing it in
the near future. In the following paragraphs, we address a series of
issues related to clinical labor tasks, particularly relevant to
services currently being reviewed under the misvalued code initiative
(a) Clinical Labor Tasks Associated With Digital Imaging
In PFS rulemaking for CY 2015, we noted that the RUC recommendation
regarding inputs for digital imaging services indicated that, as each
code is reviewed under the misvalued code initiative, the clinical
labor tasks associated with digital technology (instead of film) would
need to be addressed. When we reviewed that recommendation, we did not
have the capability of assigning standard clinical labor times for the
hundreds of individual codes since the direct PE

[[Page 41698]]

input database did not previously allow for comprehensive adjustments
for clinical labor times based on particular clinical labor tasks.
Therefore, consistent with the recommendation, we proposed to remove
film-based supply and equipment items but maintain clinical labor
minutes that were assigned based on film technology.
As noted in the paragraphs above, we continue to improve the direct
PE input database by specifying the minutes for each code associated
with each clinical labor task. Once completed, this work would allow
adjustments to be made to minutes assigned to particular clinical labor
tasks related to digital technology, consistent with the changes that
were made to individual supply and equipment items. In the meantime, we
believe it would be appropriate to establish standard times for
clinical labor tasks associated with all digital imaging for purposes
of reviewing individual services at present, and for possible broad-
based standardization once the changes to the database facilitate our
ability to adjust time for existing services. Therefore, we are seeking
comment on the appropriate standard minutes for the clinical labor
tasks associated with services that use digital technology, which are
listed in Table 5. We note that the application of any standardized
times we adopt for clinical labor tasks to codes that are not being
reviewed in this proposed rule would be considered for possible
inclusion in future notice and comment rulemaking.

Table 5--Clinical Labor Tasks Associated With Digital Technology
------------------------------------------------------------------------
Clinical labor task Typical minutes
------------------------------------------------------------------------
Availability of prior images confirmed............... 2
Patient clinical information and questionnaire 2
reviewed by technologist, order from physician
confirmed and exam protocoled by radiologist........
Technologist QC's * images in PACS, checking for all 2
images, reformats, and dose page....................
Review examination with interpreting MD.............. 2
Exam documents scanned into PACS. Exam completed in 1
RIS system to generate billing process and to
populate images into Radiologist work queue.........
------------------------------------------------------------------------
* This clinical labor task is listed as it appears on the ``PE
worksheets.'' QC refers to quality control, which we understand to
mean the verification of the image using the PACS workstation.

(b) Pathology Clinical Labor Tasks
As with the clinical labor tasks associated with digital imaging,
many of the specialized clinical labor tasks associated with pathology
services do not have consistent times across those codes. In reviewing
the recommendations for pathology services, we have not identified
information that suggests that the inconsistencies reflect the judgment
that the same tasks take significantly more or less time depending on
the individual service for which they are performed, especially given
the specificity with which they are described.
We have therefore developed proposed standard times that we have
used in proposing direct PE inputs. These times are based on our review
and assessment of the current times included for these clinical labor
tasks in the direct PE input database. We have listed these proposed
standard times in Table 6. For services reviewed for CY 2016, in cases
where the RUC-recommended times differed from these standards, we have
refined the time for those tasks to align with the values in Table 6.
We seek comment on whether these standard times accurately reflect the
typical time it takes to perform these clinical labor tasks when
furnishing pathology services.

Table 6--Standard Times for Clinical Labor Tasks Associated With
Pathology Services
------------------------------------------------------------------------
Standard clinical
Clinical Labor Task labor time
------------------------------------------------------------------------
Accession specimen/prepare for examination.......... 4
Assemble and deliver slides with paperwork to 0.5
pathologists.......................................
Assemble other light microscopy slides, open nerve 0.5
biopsy slides, and clinical history, and present to
pathologist to prepare clinical pathologic
interpretation.....................................
Assist pathologist with gross specimen examination.. 3
Clean room/equipment following procedure (including 1
any equipment maintenance that must be done after
the procedure).....................................
Dispose of remaining specimens, spent chemicals/ 1
other consumables, and hazardous waste.............
Enter patient data, computational prep for antibody 1
testing, generate and apply bar codes to slides,
and enter data for automated slide stainer.........
Instrument start-up, quality control functions, 13
calibration, centrifugation, maintaining specimen
tracking, logs and labeling........................
Load specimen into flow cytometer, run specimen, 7
monitor data acquisition and data modeling, and
unload flow cytometer..............................
Preparation: labeling of blocks and containers and 0.5
document location and processor used...............
Prepare automated stainer with solutions and load 4
microscopic slides.................................
Prepare specimen containers/preload fixative/label 0.5
containers/distribute requisition form(s) to
physician..........................................
Prepare, pack and transport specimens and records 1
for in-house storage and external storage (where
applicable)........................................
Print out histograms, assemble materials with 2
paperwork to pathologists. Review histograms and
gating with pathologist............................
Receive phone call from referring laboratory/ 5
facility with scheduled procedure to arrange
special delivery of specimen procurement kit,
including muscle biopsy clamp as needed. Review
with sender instructions for preservation of
specimen integrity and return arrangements. Contact
courier and arrange delivery to referring
laboratory/facility................................
Register the patient in the information system, 4
including all demographic and billing information..
Stain air dried slides with modified Wright stain. 3
Review slides for malignancy/high cellularity
(cross contamination)..............................
------------------------------------------------------------------------

[[Page 41699]]

(c) Clinical Labor Task: ``Complete Botox Log''
In the process of improving the level of detail in the direct PE
input database by including the minutes assigned for each clinical
labor task, we noticed that there are several codes with minutes
assigned for the clinical labor task called ``complete botox log.'' We
do not believe the completion of such a log is a direct resource cost
of furnishing a medically reasonable and necessary physician's service
for a Medicare beneficiary. Therefore, we are proposing to eliminate
the minutes assigned for the task ``complete botox log'' from the
direct PE input database. The PE RVUs displayed in Addendum B on the
CMS Web site were calculated with the modified inputs displayed in the
CY 2016 direct PE input database.
(3) Clinical Labor Input Inconsistencies
Subsequent to the publication of the CY 2015 PFS final rule with
comment period, stakeholders alerted us to several clerical
inconsistencies in the clinical labor nonfacility intraservice time for
several vertebroplasty codes with interim final values for CY 2015,
based on our understanding of RUC recommended values. We are proposing
to correct these inconsistencies in the CY 2016 proposed direct PE
input database to reflect the RUC recommended values, without
refinement, as stated in the CY 2015 PFS final rule with comment
period. The CY 2015 interim final direct PE inputs for these codes are
displayed on the CMS Web site under downloads for the CY 2015 PFS final
rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. For CY 2016, we are proposing the following adjustments.
For CPT codes 22510 (percutaneous vertebroplasty (bone biopsy included
when performed), 1 vertebral body, unilateral or bilateral injection,
inclusive of all imaging guidance; cervicothoracic) and 22511
(percutaneous vertebroplasty (bone biopsy included when performed), 1
vertebral body, unilateral or bilateral injection, inclusive of all
imaging guidance; lumbosacral), a value of 45 minutes for labor code
L041B (``Radiologic Technologist'') were are proposing to assign for
the ``assist physician'' task and a value of 5 minutes for labor code
L037D (``RN/LPN/MTA'') for the ``Check dressings & wound/home care
instructions/coordinate office visits/prescriptions'' task. For CPT
code 22514 (percutaneous vertebral augmentation, including cavity
creation (fracture reduction and bone biopsy included when performed)
using mechanical device (eg, kyphoplasty), 1 vertebral body, unilateral
or bilateral cannulation, inclusive of all imaging guidance; lumbar),
we are proposing to adjust the nonfacility intraservice time to 50
minutes for L041B, 50 minutes for L051A (``RN''), 38 minutes for a
second L041B, and 12 minutes for L037D. The PE RVUs displayed in
Addendum B on the CMS Web site were calculated with the inputs
displayed in the CY 2016 direct PE input database.
(4) Freezer
We identified several pathology codes for which equipment minutes
are assigned to the item EP110 ``Freezer.'' Minutes are only allocated
to particular equipment items when those items cannot be used in
conjunction with furnishing services to another patient at the same
time. We do not believe that minutes should be allocated to items such
as freezers since the storage of any particular specimen or item in a
freezer for any given period of time would be unlikely to make the
freezer unavailable for storing other specimens or items. Instead, we
propose to classify the freezer as an indirect cost because we believe
that would be most consistent with the principles underlying the PE
methodology since freezers can be used for many specimens at once. The
PE RVUs displayed in Addendum B on the CMS Web site were calculated
with the modified inputs displayed in the CY 2016 direct PE input
database.
(5) Updates to Price for Existing Direct Inputs
In the CY 2011 PFS final rule with comment period (75 FR 73205), we
finalized a process to act on public requests to update equipment and
supply price and equipment useful life inputs through annual rulemaking
beginning with the CY 2012 PFS proposed rule. During 2014, we received
a request to update the price of supply item ``antigen, mite'' (SH006)
from $4.10 per test to $59. In reviewing the request, it is evident
that the requested price update does not apply to the SH006 item but
instead represents a different item than the one currently included as
an input in CPT code 86490 (skin test, coccidioidomycosis). Therefore,
rather than changing the price for SH006 that is included in several
codes, we are proposing to create a new supply code for Spherusol,
valued at $590 per 1 ml vial and $59 per test, and to include this new
item as a supply for 86490 instead of the current input, SH006. We also
received a request to update the price for EQ340 (Patient Worn
Telemetry System) used only in CPT code 93229 (External mobile
cardiovascular telemetry with electrocardiographic recording,
concurrent computerized real time data analysis and greater than 24
hours of accessible ECG data storage (retrievable with query) with ECG
triggered and patient selected events transmitted to a remote attended
surveillance center for up to 30 days; technical support for connection
and patient instructions for use, attended surveillance, analysis and
transmission of daily and emergent data reports as prescribed by a
physician or other qualified health care.) The requestor noted that we
had previously proposed and finalized a policy to remove wireless
communication and delivery costs related to the equipment item that had
previously been included in the direct PE input database as supply
items. The requestor asked that we alter the price of the equipment
from $21,575 to $23,537 to account for the equipment costs specific to
the patient-worn telemetry system.
We have considered this request in the context of the unique nature
of this particular equipment item. This equipment item is unique in
several ways, including that it is used continuously 24 hours per day
and 7 days per week for an individual patient over several weeks. It is
also unique in that the equipment is primarily used outside of a
healthcare setting. Within our current methodology, we currently
account for these unique properties by calculating the per minute costs
with different assumptions than those used for most other equipment by
increasing the number of hours the equipment is available for use.
Therefore, we also believe it would be appropriate to incorporate other
unique aspects of the operating costs of this item in our calculation
of the equipment cost per minute. We believe the requestor's suggestion
to do so by increasing the price of the equipment is practicable and
appropriate. Therefore, we are proposing to change the price for EQ340
(Patient Worn Telemetry System) to $23,537. The PE RVUs displayed in
Addendum B on the CMS Web site were calculated with the modified inputs
displayed in the CY 2016 direct PE input database.
For CY 2015, we received a request to update the price for supply
item ``kit, HER-2/neu DNA Probe'' (SL196) from $105 to $144.50.
Accordingly, we proposed to update the price to $144.50. In the CY 2015
final rule with comment period, we indicated that we obtained new
information suggesting that further study of the price of this item was
necessary before proceeding to update

[[Page 41700]]

the input price. We obtained pricing information readily available on
the Internet that indicated a price of $94 for this item for a
particular hospital. Subsequent to the CY 2015 final rule with comment
period, stakeholders requested that we use the updated price of
$144.50. One stakeholder suggested that the price of $94 likely
reflected discounts for volume purchases not received by the typical
laboratory. We are seeking comment on how to consider the higher-priced
invoice, which is 53 percent higher than the price listed, relative to
the price currently in the direct PE database. Specifically, we are
seeking information on the price of the disposable supply in the
typical case of the service furnished to a Medicare beneficiary,
including, based on data, whether the typical Medicare case is
furnished by an entity likely to receive a volume discount.
(6) Typical Supply and Equipment Inputs for Pathology Services
In reviewing public comments in response to the CY 2015 PFS final
rule with comment period, we re-examined issues around the typical
number of pathology tests furnished at once. In the CY 2013 final rule
with comment period (77 FR 69074), we noted that the number of blocks
assumed for a particular code significantly impacts the assumed
clinical labor, supplies, and equipment for that service. We indicated
that we had concerns that the assumed number of blocks was inaccurate,
and that we sought corroborating, independent evidence that the number
of blocks assumed in the current direct PE input recommendations is
typical. We note that, given the high volume of many pathology
services, these assumptions have a significant impact on the PE RVUs
for all other PFS services. We refer readers to section II.I.5.d where
we detail our concerns about the lack of information regarding typical
batch size and typical block size for many pathology services and
solicit stakeholder input on approaches to obtaining accurate
information that can facilitate our establishing payment rates that
best reflect the relative resources involved in furnishing the typical
service, for both pathology services in particular and more broadly for
services across the PFS.
d. Developing Nonfacility Rates
We note that not all PFS services are priced in the nonfacility
setting, but as medical practice changes, we routinely develop
nonfacility prices for particular services when they can be furnished
outside of a facility setting. We note that the valuation of a service
under the PFS in particular settings does not address whether those
services are medically reasonable and necessary in the case of
individual patients, including being furnished in a setting appropriate
to the patient's medical needs and condition.
(1) Request for Information on Nonfacility Cataract Surgery
Cataract surgery generally has been performed in an ambulatory
surgery center (ASC) or a hospital outpatient department (HOPD).
Therefore, CMS has not assigned nonfacility PE RVUs under the PFS for
cataract surgery. According to Medicare claims data, there are a
relatively small number of these services furnished in nonfacility
settings. Except in unusual circumstances, anesthesia for cataract
surgery is either local or topical/intracameral. Advancements in
technology have significantly reduced operating time and improved both
the safety of the procedure and patient outcomes. We believe that it is
now possible for cataract surgery to be furnished in an in-office
surgical suite, especially for routine cases. Cataract surgery patients
require a sterile surgical suite with certain equipment and supplies
that we believe could be a part of a nonfacility-based setting that is
properly constructed and maintained for appropriate infection
prevention and control.
We believe that there are potential advantages for all parties to
furnishing appropriate cataract surgery cases in the nonfacility
setting. Cataract surgery has been for many years the highest volume
surgical procedure performed on Medicare beneficiaries. For
beneficiaries, cataract surgery in the office setting might provide the
additional convenience of receiving the preoperative, operative, and
post-operative care in one location. It might also reduce delays
associated with registration, processing, and discharge protocols
associated with some facilities. Similarly, it might provide surgeons
with greater flexibility in scheduling patients at an appropriate site
of service depending on the individual patient's needs. For example,
routine cases in patients with no comorbidities could be performed in
the nonfacility surgical suite, while more complicated cases (for
example, pseudoexfoliation) could be scheduled in the ASC or HOPD. In
addition, furnishing cataract surgery in the nonfacility setting could
result in lower Medicare expenditures for cataract surgery if the
nonfacility payment rate were lower than the sum of the PFS facility
payment rate and the payment to either the ASC or HOPD.
We are seeking comments from ophthalmologists and other
stakeholders on office-based surgical suite cataract surgery. In
addition, we are soliciting comments from the RUC and other
stakeholders on the direct practice expense inputs involved in
furnishing cataract surgery in the nonfacility setting in conjunction
with our consideration of information regarding the possibility of
developing nonfacility PE RVUs for cataract surgery. We understand that
cataract surgery generally requires some standard equipment and
supplies (for example; phacoemulsification machine, surgical pack,
intraocular lenses (IOL), etc.) that would be incorporated as direct PE
inputs in calculating nonfacility PE RVUs.
(2) Direct PE Inputs for Functional Endoscopic Sinus Surgery Services
A stakeholder indicated that due to changes in technology and
technique, several codes that describe endoscopic sinus surgeries can
now be furnished in the nonfacility setting. According to Medicare
claims data, there are a relatively small number of these services
furnished in nonfacility settings. These CPT codes are 31254 (Nasal/
sinus endoscopy, surgical; with ethmoidectomy, partial (anterior)),
31255 (Nasal/sinus endoscopy, surgical; with ethmoidectomy, total
(anterior and posterior)), 31256 (Nasal/sinus endoscopy, surgical, with
maxillary antrostomy;), 31267 (Nasal/sinus endoscopy, surgical, with
maxillary antrostomy; with removal of tissue from maxillary sinus),
31276 (Nasal/sinus endoscopy, surgical with frontal sinus exploration,
with or without removal of tissue from frontal sinus), 31287 (Nasal/
sinus endoscopy, surgical, with sphenoidotomy;), and 31288 (Nasal/sinus
endoscopy, surgical, with sphenoidotomy; with removal of tissue from
the sphenoid sinus). We are seeking input from stakeholders, including
the RUC, about the appropriate direct PE inputs for these services.

B. Determination of Malpractice Relative Value Units (RVUs)

1. Overview
Section 1848(c) of the Act requires that each service paid under
the PFS be comprised of three components: work, PE, and malpractice
(MP) expense. As required by section 1848(c)(2)(C)(iii) of the Act,
beginning in CY 2000, MP RVUs are resource based. Malpractice RVUs for
new codes after 1991 were

[[Page 41701]]

extrapolated from similar existing codes or as a percentage of the
corresponding work RVU. Section 1848(c)(2)(B)(i) of the Act also
requires that we review, and if necessary adjust, RVUs no less often
than every 5 years. In the CY 2015 PFS final rule with comment period,
we implemented the third review and update of MP RVUs. For a discussion
of the third review and update of MP RVUs see the CY 2015 proposed rule
(79 FR 40349 through 40355) and final rule with comment period (79 FR
67591 through 67596).
As explained in the CY 2011 PFS final rule with comment period (75
FR 73208), MP RVUs for new and revised codes effective before the next
five-year review of MP RVUs (for example, effective CY 2016 through CY
2019, assuming that the next review of MP RVUs occurs for CY 2020) are
determined either by a direct crosswalk from a similar source code or
by a modified crosswalk to account for differences in work RVUs between
the new/revised code and the source code. For the modified crosswalk
approach, we adjust (or ``scale'') the MP RVU for the new/revised code
to reflect the difference in work RVU between the source code and the
new/revised work value (or, if greater, the clinical labor portion of
the fully implemented PE RVU) for the new code. For example, if the
proposed work RVU for a revised code is 10 percent higher than the work
RVU for its source code, the MP RVU for the revised code would be
increased by 10 percent over the source code MP RVU. Under this
approach the same risk factor is applied for the new/revised code and
source code, but the work RVU for the new/revised code is used to
adjust the MP RVUs for risk.
For CY 2016, we propose to continue our current approach for
determining MP RVUs for new/revised codes. For the new and revised
codes for which we include proposed work values and PE inputs in the
proposed rule, we will also publish the proposed MP crosswalks used to
determine their MP RVUs in the proposed rule. The MP crosswalks for
those new and revised codes will be subject to public comment and
finalized in the CY 2016 PFS final rule. The MP crosswalks for new and
revised codes with interim final values established in the CY 2016
final rule will be implemented for CY 2016 and subject to public
comment. They will then be finalized in the CY 2017 PFS final rule with
comment period.
2. Proposed Annual Update of MP RVUs
In the CY 2012 PFS final rule with comment period (76 FR 73057), we
finalized a process to consolidate the five-year reviews of physician
work and PE RVUs with our annual review of potentially misvalued codes.
We discussed the exclusion of MP RVUs from this process at the time,
and we stated that, since it is not feasible to obtain updated
specialty level MP insurance premium data on an annual basis, we
believe the comprehensive review of MP RVUs should continue to occur at
5-year intervals. In the CY 2015 PFS proposed rule (79 FR 40349 through
40355), we stated that there are two main aspects to the update of MP
RVUs: (1) Recalculation of specialty risk factors based upon updated
premium data; and (2) recalculation of service level RVUs based upon
the mix of practitioners providing the service. In the CY 2015 PFS
final rule with comment period (79 FR 67596), in response to several
stakeholders' comments, we stated that we would address potential
changes regarding the frequency of MP RVU updates in a future proposed
rule. For CY 2016, we are proposing to begin conducting annual MP RVU
updates to reflect changes in the mix of practitioners providing
services, and to adjust MP RVUs for risk. Under this approach, the
specialty-specific risk factors would continue to be updated every five
years using updated premium data, but would remain unchanged between
the 5-year reviews. However, in an effort to ensure that MP RVUs are as
current as possible, our proposal would involve recalibrating all MP
RVUs on an annual basis to reflect the specialty mix based on updated
Medicare claims data. Since under this proposal, we would be
recalculating the MP RVUs annually, we are also proposing to maintain
the relative pool of MP RVUs from year to year; this will preserve the
relative weight of MP RVUs to work and PE RVUs. We are proposing to
calculate the current pool of MP RVUs by using a process parallel to
the one we use in calculating the pool of PE RVUs. (We direct the
reader to section II.2.b.(6) for detailed description of that process,
including a proposed technical revision for 2016.) To determine the
specialty mix assigned to each code, we are also proposing to use the
same process used in the PE methodology, described in section
II.2.b.(6) of this proposed rule. We note that for CY 2016, we are
proposing to modify the specialty mix assignment methodology to use an
average of the 3 most recent years of available data instead of a
single year of data as is our current policy. We anticipate that this
change will increase the stability of PE and MP RVUs and mitigate code-
level fluctuations for all services paid under the PFS, and for new and
low-volume codes in particular. We are also proposing to no longer
apply the dominant specialty for low volume services, because the
primary rationale for the policy has been mitigated by this proposed
change in methodology. However, we are not proposing to adjust the
code-specific overrides established in prior rulemaking for codes where
the claims data are inconsistent with a specialty that could be
reasonably expected to furnish the service. We believe that these
proposed changes will serve to balance the advantages of using annually
updated information with the need for year-to-year stability in values.
We seek comment on both aspects of the proposal: updating the specialty
mix for MP RVUs annually (while continuing to update specialty-specific
risk factors every 5 years using updated premium data); and using the
same process to determine the specialty mix assigned to each code as is
used in the PE methodology, including the proposed modification to use
the most recent 3 years of claims data. We also seek comment on whether
this approach will be helpful in addressing some of the concerns
regarding the calculation of MP RVUs for services with low volume in
the Medicare population, including the possibility of limiting our use
of code-specific overrides of the claims data.
We are also proposing an additional refinement in our process for
assigning MP RVUs to individual codes. Historically, we have used a
floor of 0.01 MP RVUs for all nationally-priced PFS codes. This means
that even when the code-level calculation for the MP RVU falls below
0.005, we have rounded to 0.01. In general, we believe this approach
accounts for the minimum MP costs associated with each service
furnished to a Medicare beneficiary. However, in examining the
calculation of MP RVUs, we do not believe that this floor should apply
to add-on codes. Since add-on codes must be reported with another code,
there is already an MP floor of 0.01 that applies to the base code, and
therefore, to each individual service. By applying the floor to add-on
codes, the current methodology practically creates a 0.02 floor for any
service reported with one add-on code, and 0.03 for those with 2 add-on
codes, etc. Therefore, we are proposing to maintain the 0.01 MP RVU
floor for all nationally-priced PFS services that are described by base
codes, but not for add-on codes. We will continue to calculate,
display, and make payments that include MP RVUs for

[[Page 41702]]

add-on codes that are calculated to 0.01 or greater, including those
that round to 0.01. We are only proposing to allow the MP RVUs for add-
on codes to round to 0.00 where the calculated MP RVU is less than
0.005.
We will continue to study the appropriate frequency for collecting
and updating premium data and will address any further proposed changes
in future rulemaking.
3. MP RVU Update for Anesthesia Services
In the CY 2015 PFS proposed rule (79 FR 40354 through 40355), we
did not include an adjustment under the anesthesia fee schedule to
reflect updated MP premium information, and stated that we intended to
propose an anesthesia adjustment for MP in the CY 2016 PFS proposed
rule. We also solicited comments regarding how to best reflect updated
MP premium amounts under the anesthesiology fee schedule.
As we previously explained, anesthesia services under the PFS are
paid based upon a separate fee schedule, so routine updates must be
calculated in a different way than those for services for which payment
is calculated based upon work, PE, and MP RVUs. To apply budget
neutrality and relativity updates to the anesthesiology fee schedule,
we typically develop proxy RVUs for individual anesthesia services that
are derived from the total portion of PFS payments made through the
anesthesia fee schedule. We then update the proxy RVUs as we would the
RVUs for other PFS services and adjust the anesthesia fee schedule
conversion factor based on the differences between the original proxy
RVUs and those adjusted for relativity and budget neutrality.
We believe that taking the same approach to update the anesthesia
fee schedule based on new MP premium data is appropriate. However,
because work RVUs are integral to the MP RVU methodology and anesthesia
services do not have work RVUs, we decided to seek potential
alternatives prior to implementing our approach in conjunction with the
proposed CY 2015 MP RVUs based on updated premium data. One commenter
supported the delay in proposing to update the MP for anesthesia at the
same time as updating the rest of the PFS, and another commenter
suggested using mean anesthesia MP premiums per provider over a 4 or 5
year period prorated by Medicare utilization to yield the MP expense
for anesthesia services; no commenters offered alternatives to
calculating updated MP for anesthesia services. The latter suggestion
might apply more broadly to the MP methodology for the PFS and does not
address the methodology as much as the data source.
We continue to believe that payment rates for anesthesia should
reflect MP resource costs relative to the rest of the PFS, including
updates to reflect changes over time. Therefore, for CY 2016, in order
to appropriately update the MP resource costs for anesthesia, we are
proposing to make adjustments to the anesthesia conversion factor to
reflect the updated premium information collected for the five year
review. To determine the appropriate adjustment, we calculated imputed
work RVUs and MP RVUs for the anesthesiology fee schedule services
using the work, PE, and MP shares of the anesthesia fee schedule.
Again, this is consistent with our longstanding approach to making
annual adjustments to the PE and work RVU portions of the
anesthesiology fee schedule. To reflect differences in the complexity
and risk among the anesthesia fee schedule services, we multiplied the
service-specific risk factor for each anesthesia fee schedule service
by the CY 2016 imputed proxy work RVUs and used the product as the
updated raw proxy MP RVUs for each anesthesia service for CY 2016. We
then applied the same scaling adjustments to these raw proxy MP RVUs
that we apply to the remainder of the PFS MP RVUs. Finally, we
calculated the aggregate difference between the 2015 proxy MP RVUs and
the proxy MP RVUs calculated for CY 2016. We then adjusted the portion
of the anesthesia conversion factor attributable to MP proportionately;
we refer the reader to section VI.C. of this proposed rule for the
Anesthesia Fee Schedule Conversion Factors for CY 2016. We are inviting
public comments regarding this proposal.
4. MP RVU Methodology Refinements
In the CY 2015 PFS final rule with comment period (79 FR 67591
through 67596), we finalized updated MP RVUs that were calculated based
on updated MP premium data obtained from state insurance rate filings.
The methodology used in calculating the finalized CY 2015 review and
update of resource-based MP RVUs largely paralleled the process used in
the CY 2010 update. We posted our contractor's report, ``Final Report
on the CY 2015 Update of Malpractice RVUs'' on the CMS Web site. It is
also located under the supporting documents section of the CY 2015 PFS
final rule with comment period located at http://www.cms.gov/PhysicianFeeSched/. A more detailed explanation of the 2015 MP RVU
update can be found in the CY 2015 PFS proposed rule (79 FR 40349
through 40355).
In the CY 2015 PFS proposed rule, we outlined the steps for
calculating MP RVUs. In the process of calculating MP RVUs for purposes
of this proposed rule, we have identified a necessary refinement to way
we have calculated Step 1, which involves computing a preliminary
national average premium for each specialty, to align the calculations
within the methodology to the calculations described within the
aforementioned contractor's report. Specifically, in the calculation of
the national premium for each specialty (refer to equations 2.3, 2.4,
2.5 in the aforementioned contractor's report), we calculate a weighted
sum of premiums across areas and divide it by a weighted sum of MP
GPCIs across areas. The calculation currently takes the ratio of sums,
rather than the weighted average of the local premiums to the MP GPCI
in that area. Instead, we are proposing to update the calculation to
use a price-adjusted premium (that is, the premium divided by the GPCI)
in each area, and then taking a weighted average of those adjusted
premiums. The CY 2016 PFS proposed rule MP RVUs were calculated in this
manner.
Additionally, in the calculation of the national average premium
for each specialty as discussed above, our current methodology used the
total RVUs in each area as the weight in the numerator (that is, for
premiums), and total MP RVUs as the weights in the denominator (that
is, for the MP GPCIs). After further consideration, we believe that the
use of these RVU weights is problematic. Use of weights that are
central to the process at hand presents potential circularity since
both weights incorporate MP RVUs as part of the computation to
calculate MP RVUs. The use of different weights for the numerator and
denominator introduces potential inconsistency. Instead, we believe
that it would be better to use a different measure that is independent
of MP RVUs and better represents the reason for weighting.
Specifically, we are proposing to use area population as a share of
total U.S. population as the weight. The premium data are for all MP
premium costs, not just those associated with Medicare patients, so we
believe that the distribution of the population does a better job of
capturing the role of each area's premium in the ``national'' premium
for each specialty than our previous Medicare-specific measure. Use of
population weights also avoids the potential problems of circularity
and inconsistency.

[[Page 41703]]

The CY 2016 PFS proposed MP RVUs, as displayed in Addendum B of
this proposed rule, reflect MP RVUs calculated following our
established methodology, with the inclusion of the proposals and
refinements described above.

C. Potentially Misvalued Services Under the Physician Fee Schedule

1. Background
Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a
periodic review, not less often than every 5 years, of the RVUs
established under the PFS. Section 1848(c)(2)(K) of the Act requires
the Secretary to periodically identify potentially misvalued services
using certain criteria and to review and make appropriate adjustments
to the relative values for those services. Section 1848(c)(2)(L) to the
Act also requires the Secretary to develop a process to validate the
RVUs of certain potentially misvalued codes under the PFS, using the
same criteria used to identify potentially misvalued codes, and to make
appropriate adjustments.
As discussed in section I.B. of this proposed rule, each year we
develop appropriate adjustments to the RVUs taking into account
recommendations provided by the American Medical Association/Specialty
Society Relative Value Scale Update Committee (RUC), the Medicare
Payment Advisory Commission (MedPAC), and others. For many years, the
RUC has provided us with recommendations on the appropriate relative
values for new, revised, and potentially misvalued PFS services. We
review these recommendations on a code-by-code basis and consider these
recommendations in conjunction with analyses of other data, such as
claims data, to inform the decision-making process to establish
relative values for these codes. We may also consider analyses of work
time, work RVUs, or direct practice expense (PE) inputs using other
data sources, such as Department of Veteran Affairs (VA), National
Surgical Quality Improvement Program (NSQIP), the Society for Thoracic
Surgeons (STS), and the Physician Quality Reporting System (PQRS)
databases. In addition to considering the most recently available data,
we also assess the results of physician surveys and specialty
recommendations submitted to us by the RUC. We also consider
information provided by other stakeholders. We conduct a review to
assess the appropriate RVUs in the context of contemporary medical
practice. We note that section 1848(c)(2)(A)(ii) of the Act authorizes
the use of extrapolation and other techniques to determine the RVUs for
physicians' services for which specific data are not available, in
addition to requiring us to take into account the results of
consultations with organizations representing physicians who furnish
the services. In accordance with section 1848(c) of the Act, we
determine and make appropriate adjustments to the RVUs. We discuss
these methodologies as applied to particular codes in section I.B. of
this proposed rule.
Section 1848(c)(2)(K)(ii) of the Act augments our efforts by
directing the Secretary to specifically examine, as determined
appropriate, potentially misvalued services in the following
categories:
Codes that have experienced the fastest growth.
Codes that have experienced substantial changes in
practice expenses.
Codes that describe new technologies or services within an
appropriate time period (such as 3 years) after the relative values are
initially established for such codes.
Codes which are multiple codes that are frequently billed
in conjunction with furnishing a single service.
Codes with low relative values, particularly those that
are often billed multiple times for a single treatment.
Codes that have not been subject to review since
implementation of the fee schedule.
Codes that account for the majority of spending under the
PFS.
Codes for services that have experienced a substantial
change in the hospital length of stay or procedure time.
Codes for which there may be a change in the typical site
of service since the code was last valued.
Codes for which there is a significant difference in
payment for the same service between different sites of service.
Codes for which there may be anomalies in relative values
within a family of codes.
Codes for services where there may be efficiencies when a
service is furnished at the same time as other services.
Codes with high intra-service work per unit of time.
Codes with high practice expense relative value units.
Codes with high cost supplies.
Codes as determined appropriate by the Secretary.
Section 1848(c)(2)(K)(iii) of the Act also specifies that the
Secretary may use existing processes to receive recommendations on the
review and appropriate adjustment of potentially misvalued services. In
addition, the Secretary may conduct surveys, other data collection
activities, studies, or other analyses, as the Secretary determines to
be appropriate, to facilitate the review and appropriate adjustment of
potentially misvalued services. This section also authorizes the use of
analytic contractors to identify and analyze potentially misvalued
codes, conduct surveys or collect data, and make recommendations on the
review and appropriate adjustment of potentially misvalued services.
Additionally, this section provides that the Secretary may coordinate
the review and adjustment of any RVU with the periodic review described
in section 1848(c)(2)(B) of the Act. Section 1848(c)(2)(K)(iii)(V) of
the Act specifies that the Secretary may make appropriate coding
revisions (including using existing processes for consideration of
coding changes) that may include consolidation of individual services
into bundled codes for payment under the PFS.
2. Progress in Identifying and Reviewing Potentially Misvalued Codes
To fulfill our statutory mandate, we have identified and reviewed
numerous potentially misvalued codes as specified in section
1848(c)(2)(K)(ii) of the Act, and we plan to continue our work
examining potentially misvalued codes in these areas over the upcoming
years. As part of our current process, we identify potentially
misvalued codes for review, and request recommendations from the RUC
and other public commenters on revised work RVUs and direct PE inputs
for those codes. The RUC, through its own processes, also identifies
potentially misvalued codes for review. Through our public nomination
process for potentially misvalued codes established in the CY 2012 PFS
final rule with comment period, other individuals and stakeholder
groups submit nominations for review of potentially misvalued codes as
well.
Since CY 2009, as a part of the annual potentially misvalued code
review and Five-Year Review process, we have reviewed over 1,560
potentially misvalued codes to refine work RVUs and direct PE inputs.
We have assigned appropriate work RVUs and direct PE inputs for these
services as a result of these reviews. A more detailed discussion of
the extensive prior reviews of potentially misvalued codes is included
in the CY 2012 PFS final rule with comment period (76 FR 73052

[[Page 41704]]

through 73055). In the CY 2012 final rule with comment period, we
finalized our policy to consolidate the review of physician work and PE
at the same time (76 FR 73055 through 73958), and established a process
for the annual public nomination of potentially misvalued services.
In the CY 2013 final rule with comment period, we built upon the
work we began in CY 2009 to review potentially misvalued codes that
have not been reviewed since the implementation of the PFS (so-called
``Harvard-valued codes''). In CY 2009, we requested recommendations
from the RUC to aid in our review of Harvard-valued codes that had not
yet been reviewed, focusing first on high-volume, low intensity codes
(73 FR 38589). In the Fourth Five-Year Review, we requested
recommendations from the RUC to aid in our review of Harvard-valued
codes with annual utilization of greater than 30,000 (76 FR 32410). In
the CY 2013 final rule with comment period, we identified as
potentially misvalued Harvard-valued services with annual allowed
charges that total at least $10,000,000. In addition to the Harvard-
valued codes, in the CY 2013 final rule with comment period we
finalized for review a list of potentially misvalued codes that have
stand-alone PE (codes with physician work and no listed work time, and
codes with no physician work and listed work time).
In the CY 2014 final rule with comment period, we finalized for
review a list of potentially misvalued services. We included on the
list for review ultrasound guidance codes that had longer procedure
times than the typical procedure with which the code is billed to
Medicare. We also finalized our proposal to replace missing post-
operative hospital E/M visit information and work time for
approximately 100 global surgery codes. In CY 2014, we also considered
a proposal to limit Medicare PFS payments for services furnished in a
non-facility setting when the PFS payment would exceed the combined
Medicare payment made to the practitioner under the PFS and facility
payment made to either the ASC or hospital outpatient. Based upon
extensive public comment we did not finalize this proposal.
In the CY 2015 final rule with comment period, we finalized a list
of potentially misvalued services. The potentially misvalued codes list
included the publicly nominated CPT code 41530; two neurostimulator
implantation codes, CPT 64553 and 64555; four epidural injection codes,
CPT 62310, 62311, 62318 and 62319; three breast mammography codes, CPT
77055, 77056 and 77057; an abdominal aortic aneurysm ultrasound
screening code, HCPCS G0389; a prostate biopsy code, G0416; and an
obesity behavioral group counseling code, HCPCS G0473. We also
finalized our ``high expenditure services across specialty'' screen as
a tool to identify potentially misvalued codes though we did not
finalize the particular list of codes identified in that rule as
potentially misvalued. In CY 2015, we also considered and finalized a
proposal addressing the valuation and coding of global surgical
packages, which would revalue and transition 10 and 90-day global codes
to 0-day codes. We also sought comment on approaches to revalue
services that included moderate sedation as an inherent part of
furnishing the procedure.
3. Validating RVUs of Potentially Misvalued Codes
Section 1848(c)(2)(L) of the Act requires the Secretary to
establish a formal process to validate RVUs under the PFS. The Act
specifies that the validation process may include validation of work
elements (such as time, mental effort and professional judgment,
technical skill and physical effort, and stress due to risk) involved
with furnishing a service and may include validation of the pre-, post-
, and intra-service components of work. The Secretary is directed, as
part of the validation, to validate a sampling of the work RVUs of
codes identified through any of the 16 categories of potentially
misvalued codes specified in section 1848(c)(2)(K)(ii) of the Act.
Furthermore, the Secretary may conduct the validation using methods
similar to those used to review potentially misvalued codes, including
conducting surveys, other data collection activities, studies, or other
analyses as the Secretary determines to be appropriate to facilitate
the validation of RVUs of services.
In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS
proposed rule (76 FR 42790), we solicited public comments on possible
approaches, methodologies, and data sources that we should consider for
a validation process. A summary of the comments along with our
responses is included in the CY 2011 PFS final rule with comment period
(75 FR 73217) and the CY 2012 PFS final rule with comment period (73054
through 73055).
We contracted with two outside entities to develop validation
models for RVUs. Given the central role of time in establishing work
RVUs and the concerns that have been raised about the current time
values used in rate setting, we contracted with the Urban Institute to
collect time data from several practices for services selected by the
contractor in consultation with CMS. Urban Institute has used a variety
of approaches to develop objective time estimates, depending on the
type of service. Objective time estimates will be compared to the
current time values used in the fee schedule. The project team will
then convene groups of physicians from a range of specialties to review
the new time data and the potential implications for work and the ratio
of work to time. Urban Institute has prepared an interim report,
``Development of a Model for the Valuation of Work Relative Value
Units,'' which discusses the challenges encountered in collecting
objective time data and offers some thoughts on how these can be
overcome. This interim report is posted on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/RVUs-Validation-UrbanInterimReport.pdf. A
final report will be available once the project is complete.
The second contract is with the RAND Corporation, which is using
available data to build a validation model to predict work RVUs and the
individual components of work RVUs, time and intensity. The model
design was informed by the statistical methodologies and approach used
to develop the initial work RVUs and to identify potentially misvalued
procedures under current CMS and RUC processes. RAND consulted with a
technical expert panel on model design issues and the test results. The
RAND report is available on the CMS Web site under downloads for the CY
2015 PFS Final Rule with Comment Period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices-Items/CMS-1612-FC.html.
4. CY 2016 Identification of Potentially Misvalued Services for Review
a. Public Nomination of Potentially Misvalued Codes
In the CY 2012 PFS final rule with comment period, we finalized a
process for the public to nominate potentially misvalued codes (76 FR
73058). The public and stakeholders may nominate potentially misvalued
codes for review by submitting the code with supporting documentation
during the 60-day public comment period following the release of the
annual PFS final rule with comment period. Supporting documentation for
codes nominated for the annual review of potentially misvalued codes
may

[[Page 41705]]

include, but are not limited to, the following:
Documentation in the peer reviewed medical literature or
other reliable data that there have been changes in physician work due
to one or more of the following: technique; knowledge and technology;
patient population; site-of-service; length of hospital stay; and work
time.
An anomalous relationship between the code being proposed
for review and other codes.
Evidence that technology has changed physician work, that
is, diffusion of technology.
Analysis of other data on time and effort measures, such
as operating room logs or national and other representative databases.
Evidence that incorrect assumptions were made in the
previous valuation of the service, such as a misleading vignette,
survey, or flawed crosswalk assumptions in a previous evaluation.
Prices for certain high cost supplies or other direct PE
inputs that are used to determine PE RVUs are inaccurate and do not
reflect current information.
Analyses of work time, work RVU, or direct PE inputs using
other data sources (for example, Department of Veteran Affairs (VA)
National Surgical Quality Improvement Program (NSQIP), the Society for
Thoracic Surgeons (STS) National Database, and the Physician Quality
Reporting System (PQRS) databases).
National surveys of work time and intensity from
professional and management societies and organizations, such as
hospital associations.
After we receive the nominated codes during the 60-day comment
period following the release of the annual PFS final rule with comment
period, we evaluate the supporting documentation and assess whether the
nominated codes appear to be potentially misvalued codes appropriate
for review under the annual process. In the following year's PFS
proposed rule, we publish the list of nominated codes and indicate
whether we are proposing each nominated code as a potentially misvalued
code.
During the comment period on the CY 2015 proposed rule and final
rule with comment period, we received nominations and supporting
documentation for three codes to be considered as potentially misvalued
codes. We evaluated the supporting documentation for each nominated
code to ascertain whether the submitted information demonstrated that
the code should be proposed as potentially misvalued.
CPT Code 36516 (Therapeutic apheresis; with extracorporeal
selective adsorption or selective filtration and plasma reinfusion) was
nominated for review as potentially misvalued. The nominator stated
that CPT code 36516 is misvalued because of incorrect direct and
indirect PE inputs and an incorrect work RVU. Specifically, the
nominator stated that the direct supply costs failed to include an $18
disposable bag and the $37 cost for biohazard waste disposal of the
post-treatment bag, and the labor costs associated with nursing being
inaccurate. The nominator also stated that the overhead expenses
associated with this service were unrealistic and that the current work
RVU undervalues a physician's time and expertise. We are proposing this
code as a potentially misvalued code. We note that we established a
policy in CY 2011 to consider biohazard bags as an indirect expense,
and not as a direct PE input (75 FR 73192).
CPT Codes 52441 (Cystourethroscopy with insertion of permanent
adjustable transprostatic implant; single implant) and 52442
(Cystourethroscopy with insertion of permanent adjustable
transprostatic implant; each additional permanent adjustable
transprostatic implant) were nominated for review as potentially
misvalued. The nominator stated that the costs of the direct practice
expense inputs were inaccurate, including the cost of the implant. We
are proposing these codes as potentially misvalued codes.
b. Electronic Analysis of Implanted Neurostimulator (CPT Codes 95970-
95982)
All of the inputs for CPT codes 95971 (Electronic analysis of
implanted neurostimulator pulse generator system (eg, rate, pulse
amplitude, pulse duration, configuration of wave form, battery status,
electrode selectability, output modulation, cycling, impedance and
patient compliance measurements); simple spinal cord, or peripheral
(ie, peripheral nerve, sacral nerve, neuromuscular) neurostimulator
pulse generator/transmitter, with intraoperative or subsequent
programming), 95972 (Electronic analysis of implanted neurostimulator
pulse generator system (eg, rate, pulse amplitude, pulse duration,
configuration of wave form, battery status, electrode selectability,
output modulation, cycling, impedance and patient compliance
measurements); complex spinal cord, or peripheral (ie, peripheral
nerve, sacral nerve, neuromuscular) (except cranial nerve)
neurostimulator pulse generator/transmitter, with intraoperative or
subsequent programming, up to one hour) and 95973 (Electronic analysis
of implanted neurostimulator pulse generator system (eg, rate, pulse
amplitude, pulse duration, configuration of wave form, battery status,
electrode selectability, output modulation, cycling, impedance and
patient compliance measurements); complex spinal cord, or peripheral
(ie, peripheral nerve, sacral nerve, neuromuscular) (except cranial
nerve) neurostimulator pulse generator/transmitter, with intraoperative
or subsequent programming, each additional 30 minutes after first hour
(List separately in addition to code for primary procedure)) were
reviewed and valued in the CY 2015 final rule with comment period (79
FR 67670). Due to significant time changes in the base codes, we
believe the entire family detailed in Table 7 should be considered as
potentially misvalued and reviewed in a manner consistent with our
review of CPT codes 95971, 95972 and 95973.

Table 7--Proposed Potentially Misvalued Codes Identified in the
Electronic Analysis of Implanted Neurostimulator Family
------------------------------------------------------------------------
HCPCS Short descriptor
------------------------------------------------------------------------
95970......................... Analyze neurostim no prog.
95974......................... Cranial neurostim complex.
95975......................... Cranial neurostim complex.
95978......................... Analyze neurostim brain/1h.
95979......................... Analyz neurostim brain addon.
95980......................... Io anal gast n-stim init.
95981......................... Io anal gast n-stim subsq.
95982......................... Io ga n-stim subsq w/reprog.
------------------------------------------------------------------------

c. Review of High Expenditure Services across Specialties with Medicare
Allowed Charges of $10,000,000 or More
In the CY 2015 PFS rule, we proposed and finalized the high
expenditure screen as a tool to identify potentially misvalued codes in
the statutory category of ``codes that account for the majority of
spending under the PFS.'' We also identified codes through this screen
and proposed them as potentially misvalued in the CY 2015 PFS proposed
rule (79 FR 40337-40338). However, given the resources required for the
revaluation of codes with 10- and 90-day global periods, we did not
finalize those codes as potentially misvalued codes in the CY 2015 PFS
final rule with comment period. We stated that we would re-run the high
expenditure screen at a future date, and subsequently propose the
specific set of

[[Page 41706]]

codes that meet the high expenditure criteria as potentially misvalued
codes (79 FR 67578).
We believe that our current resources will not necessitate further
delay in proceeding with the high expenditure screen for CY 2016. We
have re-run the screen with the same criteria finalized in last year's
rule. However, in developing this year's proposed list, we excluded all
codes with 10- and 90-day global periods since we believe these codes
should be reviewed as part of the global surgery revaluation. We are
proposing the 118 codes listed in Table 8 as potentially misvalued
codes, identified using the high expenditure screen under the statutory
category, ``codes that account for the majority of spending under the
PFS.''
To develop this list, we followed the same approach taken last year
except we excluded 10 and 90- day global periods. Specifically, we
identified the top 20 codes by specialty (using the specialties used in
Table 45) in terms of allowed charges. As we did last year, we excluded
codes that we have reviewed since CY 2010, those with fewer than $10
million in allowed charges, and those that describe anesthesia or E/M
services. We excluded E/M services from the list of proposed
potentially misvalued codes for the same reasons that we excluded them
in a similar review in CY 2012. These reasons were explained in the CY
2012 final rule with comment period (76 FR 73062 through 73065).

Table 8--Proposed Potentially Misvalued Codes Identified Through High
Expenditure by Specialty Screen
------------------------------------------------------------------------
HCPCS Short descriptor
------------------------------------------------------------------------
10022......................... Fna w/image
11100......................... Biopsy skin lesion
11101......................... Biopsy skin add-on
11730......................... Removal of nail plate
20550......................... Inj tendon sheath/ligament
20552......................... Inj trigger point 1/2 muscl
20553......................... Inject trigger points 3/>
22614......................... Spine fusion extra segment
22840......................... Insert spine fixation device
22842......................... Insert spine fixation device
22845......................... Insert spine fixation device
27370......................... Injection for knee x-ray
29580......................... Application of paste boot
31500......................... Insert emergency airway
31575......................... Diagnostic laryngoscopy
31579......................... Diagnostic laryngoscopy
31600......................... Incision of windpipe
33518......................... Cabg artery-vein two
36215......................... Place catheter in artery
36556......................... Insert non-tunnel cv cath
36569......................... Insert picc cath
36620......................... Insertion catheter artery
38221......................... Bone marrow biopsy
51700......................... Irrigation of bladder
51702......................... Insert temp bladder cath
51720......................... Treatment of bladder lesion
51728......................... Cystometrogram w/vp
51729......................... Cystometrogram w/vp&up
51784......................... Anal/urinary muscle study
51797......................... Intraabdominal pressure test
51798......................... Us urine capacity measure
52000......................... Cystoscopy
55700......................... Biopsy of prostate
58558......................... Hysteroscopy biopsy
67820......................... Revise eyelashes
70491......................... Ct soft tissue neck w/dye
70543......................... Mri orbt/fac/nck w/o &w/dye
70544......................... Mr angiography head w/o dye
70549......................... Mr angiograph neck w/o&w/dye
71010......................... Chest x-ray 1 view frontal
71020......................... Chest x-ray 2vw frontal&latl
71260......................... Ct thorax w/dye
71270......................... Ct thorax w/o & w/dye
72195......................... Mri pelvis w/o dye
72197......................... Mri pelvis w/o & w/dye
73110......................... X-ray exam of wrist
73130......................... X-ray exam of hand
73718......................... Mri lower extremity w/o dye
73720......................... Mri lwr extremity w/o&w/dye
74000......................... X-ray exam of abdomen
74022......................... X-ray exam series abdomen
74181......................... Mri abdomen w/o dye
74183......................... Mri abdomen w/o & w/dye
75635......................... Ct angio abdominal arteries
75710......................... Artery x-rays arm/leg
75978......................... Repair venous blockage
76512......................... Ophth us b w/non-quant a
76519......................... Echo exam of eye
76536......................... Us exam of head and neck
77059......................... Mri both breasts
77263......................... Radiation therapy planning
77334......................... Radiation treatment aid(s)
77470......................... Special radiation treatment
78306......................... Bone imaging whole body
78452......................... Ht muscle image spect mult
88185......................... Flowcytometry/tc add-on
88189......................... Flowcytometry/read 16 & >
88321......................... Microslide consultation
88360......................... Tumor immunohistochem/manual
88361......................... Tumor immunohistochem/comput
91110......................... Gi tract capsule endoscopy
92002......................... Eye exam new patient
92136......................... Ophthalmic biometry
92240......................... Icg angiography
92250......................... Eye exam with photos
92275......................... Electroretinography
92557......................... Comprehensive hearing test
92567......................... Tympanometry
93280......................... Pm device progr eval dual
93288......................... Pm device eval in person
93293......................... Pm phone r-strip device eval
93294......................... Pm device interrogate remote
93295......................... Dev interrog remote 1/2/mlt
93296......................... Pm/icd remote tech serv
93306......................... Tte w/doppler complete
93350......................... Stress tte only
93351......................... Stress tte complete
93503......................... Insert/place heart catheter
93613......................... Electrophys map 3d add-on
93965......................... Extremity study
94010......................... Breathing capacity test
94620......................... Pulmonary stress test/simple
95004......................... Percut allergy skin tests
95165......................... Antigen therapy services
95957......................... Eeg digital analysis
96101......................... Psycho testing by psych/phys
96116......................... Neurobehavioral status exam
96118......................... Neuropsych tst by psych/phys
96360......................... Hydration iv infusion init
96372......................... Ther/proph/diag inj sc/im
96374......................... Ther/proph/diag inj iv push
96375......................... Tx/pro/dx inj new drug addon
96401......................... Chemo anti-neopl sq/im
96402......................... Chemo hormon antineopl sq/im
96409......................... Chemo iv push sngl drug
96411......................... Chemo iv push addl drug
96567......................... Photodynamic tx skin
96910......................... Photochemotherapy with uv-b
97032......................... Electrical stimulation
97035......................... Ultrasound therapy
97110......................... Therapeutic exercises
97112......................... Neuromuscular reeducation
97113......................... Aquatic therapy/exercises
97116......................... Gait training therapy
97140......................... Manual therapy 1/regions
97530......................... Therapeutic activities
97535......................... Self care mngment training
G0283......................... Elec stim other than wound
------------------------------------------------------------------------

5. Valuing Services That Include Moderate Sedation as an Inherent Part
of Furnishing the Procedure
The CPT manual includes more than 400 diagnostic and therapeutic
procedures, listed in Appendix G, for which CPT has determined that
moderate sedation is an inherent part of furnishing the procedure.
Therefore, only the procedure code is reported when furnishing the
service, and in developing RVUs for these services, we include the
resource costs associated with moderate sedation in the valuation of
these diagnostic and therapeutic procedures. To the extent that
moderate sedation is inherent in the diagnostic or therapeutic service,
we believe that the inclusion of moderate sedation in the valuation of
the procedure is accurate. In the CY 2015 PFS proposed rule (79 FR
40349), we noted that it appeared that practice patterns for endoscopic
procedures were changing, with anesthesia increasingly being separately
reported for these procedures. Due to the changing nature of medical
practice, we noted that we were considering establishing a uniform
approach to valuation for all Appendix G services. We continue to seek
an approach that is based on using the best available objective
information about the provision of moderate sedation broadly, rather
than merely addressing this issue on a code-by-code basis using RUC
survey data when individual procedures

[[Page 41707]]

are revalued. We sought public comment on approaches to address the
appropriate valuation of these services given that moderate sedation is
no longer inherent for many of these services. To the extent that
Appendix G procedure values are adjusted to no longer include moderate
sedation, we requested suggestions as to how moderate sedation should
be reported and valued, and how to remove from existing valuations the
RVUs and inputs related to moderate sedation.
To establish an approach to valuation for all Appendix G services
based on the best data about the provision of moderate sedation, we
need to determine the extent of the misvaluation for each code. We know
that there are standard packages for the direct PE inputs associated
with moderate sedation, and we began to develop approaches to estimate
how much of the work is attributable to moderate sedation. However, we
believe that we should seek input from the medical community prior to
proposing changes in values for these services, given the different
methodologies used to develop work RVUs for the hundreds of services in
Appendix G. Therefore, we are seeking recommendations from the RUC and
other interested stakeholders for appropriate valuation of the work
associated with moderate sedation before formally proposing an approach
that allows Medicare to adjust payments based on the resource costs
associated with the moderate sedation or anesthesia services that are
being furnished.
The anesthesia procedure codes 00740 (Anesthesia for procedure on
gastrointestinal tract using an endoscope) and 00810 (Anesthesia for
procedure on lower intestine using an endoscope) are used for
anesthesia furnished in conjunction with lower GI procedures. In
reviewing Medicare claims data, we noted that a separate anesthesia
service is now reported more than 50 percent of the time that several
types of colonoscopy procedures are reported. Given the significant
change in the relative frequency with which anesthesia codes are
reported with colonoscopy services, we believe the relative values of
the anesthesia services should be re-examined. Therefore, we are
proposing to identify CPT codes 00740 and 00810 as potentially
misvalued. We welcome comments on both of these issues.
6. Improving the Valuation and Coding of the Global Package
a. Proposed Transition of 10-Day and 90-Day Global Packages Into 0-Day
Global Packages
In the CY 2015 PFS final rule (79 FR 67582 through 67591) we
finalized a policy to transition all 10-day and 90-day global codes to
0-day global codes to improve the accuracy of valuation and payment for
the various components of global surgical packages, including pre- and
post-operative visits and performance of the surgical procedure.
Although we have marginally addressed some of the concerns noted with
global packages in previous rulemaking, we believe there is still an
unmet need to address some of the fundamental issues with the 10- and
90-day post-operative global packages. We believe it is critical that
the RVUs used to develop PFS payment rates reflect the most accurate
resource costs associated with PFS services. We believe that valuing
global codes that package services together without objective,
auditable data on the resource costs associated with the components of
the services contained in the packages may significantly skew
relativity and create unwarranted payment disparities within PFS fee-
for-service payment. We also believe that the resource based valuation
of individual physicians' services will continue to serve as a critical
foundation for Medicare payment to physicians. Therefore, we believe it
is critical that the RVUs under the PFS be based as closely and
accurately as possible on the actual resources involved in furnishing
the typical occurrence of specific services.
We stated our belief that transforming all 10- and 90-day global
codes to 0-day global codes would:
Increase the accuracy of PFS payment by setting payment
rates for individual services based more closely upon the typical
resources used in furnishing the procedures;
Avoid potentially duplicative or unwarranted payments when
a beneficiary receives post-operative care from a different
practitioner during the global period;
Eliminate disparities between the payment for E/M services
in global periods and those furnished individually;
Maintain the same-day packaging of pre- and post-operative
physicians' services in the 0-day global; and
Facilitate availability of more accurate data for new
payment models and quality research.
b. Impact of the Medicare Access and CHIP Reauthorization Act of 2015
The Medicare Access and CHIP Reauthorization Act (MACRA) was
enacted into law on April 16, 2015. Section 523 of the MACRA addresses
payment for global surgical packages. Section 523(a) adds a new
paragraph at section 1848(c)(8) of the Act. Section 1848(c)(8)(A)(i) of
the Act prohibits the Secretary from implementing the policy
established in the CY 2015 PFS final rule with comment period that
would have transitioned all 10-day and 90-day global surgery packages
to 0-day global periods. Section 1848(c)(8)(A)(ii) of the Act provides
that nothing in the previous clause shall be construed to prevent the
Secretary from revaluing misvalued codes for specific surgical services
or assigning values to new or revised codes for surgical services.
Section 1848(c)(8)(B)(i) of the Act requires CMS to develop through
rulemaking a process to gather information needed to value surgical
services from a representative sample of physicians, and requires that
the data collection shall begin no later than January 1, 2017. The
collected information must include the number and level of medical
visits furnished during the global period and other items and services
related to the surgery, as appropriate. This information must be
reported on claims at the end of the global period or in another manner
specified by the Secretary. Section 1848(c)(8)(B)(ii) of the Act
requires that, every 4 years, we must reassess the value of this
collected information, and allows us to discontinue the collection if
the Secretary determines that we have adequate information from other
sources in order to accurately value global surgical services. Section
1848(c)(8)(B)(iii) of the Act specifies that the Inspector General will
audit a sample of the collected information to verify its accuracy.
Section 1848(c)(8)(C) of the Act requires that, beginning in CY 2019,
we must use the information collected as appropriate, along with other
available data, to improve the accuracy of valuation of surgical
services under the PFS. Section 523(b) of the MACRA adds a new
paragraph at section 1848(c)(9) of the Act which authorizes the
Secretary, through rulemaking, to delay up to 5 percent of the PFS
payment for services for which a physician is required to report
information under section 1848(c)(8)(B)(i) of the Act until the
required information is reported.
Since section 1848(c)(8)(B)(i) of the Act, as added by section
523(a) of the MACRA, requires us to use rulemaking

[[Page 41708]]

to develop and implement the process to gather information needed to
value surgical services no later than January 1, 2017, we are seeking
input from stakeholders on various aspects of this task. We are
soliciting comments from the public regarding the kinds of auditable,
objective data (including the number and type of visits and other
services furnished by the practitioner reporting the procedure code
during the current post-operative periods) needed to increase the
accuracy of the values for surgical services. We are also seeking
comment on the most efficient means of acquiring these data as
accurately and efficiently as possible. For example, we seek
information on the extent to which individual practitioners or
practices may currently maintain their own data on services, including
those furnished during the post-operative period, and how we might
collect and objectively evaluate those data for use in increasing the
accuracy of the values beginning in CY 2019. We will use the
information from the public comments to help develop a proposed
approach for the collection of this information in future rulemaking.
Section 1848(c)(8)(C) of the Act mandates that we use the collected
data to improve the accuracy of valuation of surgery services beginning
in 2019. We described in previous rulemaking (79 FR 67582 through
67591) the limitations and difficulties involved in the appropriate
valuation of the global packages, especially when the values of the
component services are not clear. We are seeking public comment on
potential methods of valuing the individual components of the global
surgical package, including the procedure itself, and the pre- and
post-operative care, including the follow-up care during post-operative
days. We are particularly interested in stakeholder input regarding the
overall accuracy of the values and descriptions of the component
services within the global packages. For example, we seek information
from stakeholders on whether (both qualitatively and quantitatively)
postoperative visits differ from other E/M services. We are also
interested in stakeholder input on what other items and services
related to the surgery, aside from postoperative visits, are furnished
to beneficiaries during post-operative care. We believe that
stakeholder input regarding these questions will help determine what
data should be collected, as well as how to improve the accuracy of the
valuations. We welcome the full range of public feedback from
stakeholders to assist us in this process.
We intend to provide further opportunities for public feedback
prior to developing a proposal for CY 2017 to collect this required
data. We also seek comments regarding stakeholder interest in the
potential for an open door forum, town hall meetings with the public,
or other avenues for direct communication regarding implementation of
these provisions of the Act.

D. Refinement Panel

1. Background
As discussed in the CY 1993 PFS final rule with comment period (57
FR 55938), we adopted a refinement panel process to assist us in
reviewing the public comments on CPT codes with interim final work RVUs
for a year and in developing final work values for the subsequent year.
We decided the panel would be composed of a multispecialty group of
physicians who would review and discuss the work involved in each
procedure under review, and then each panel member would individually
rate the work of the procedure. We believed establishing the panel with
a multispecialty group would balance the interests of the specialty
societies who commented on the work RVUs with the budgetary and
redistributive effects that could occur if we accepted extensive
increases in work RVUs across a broad range of services.
Following enactment of section 1848(c)(2)(K) of the Act, which
required the Secretary periodically to identify and review potentially
misvalued codes and make appropriate adjustments to the RVUs, we
reassessed the refinement panel process. As detailed in the CY 2011 PFS
final rule with comment period (75 FR 73306), we continued using the
established refinement panel process with some modifications.
For CY 2015, in light of the changes we made to the process for
valuing new, revised and potentially misvalued codes (79 FR 67606), we
reassessed the role that the refinement panel process plays in the code
valuation process. We noted that the current refinement panel process
is tied to the review of interim final values. It provides an
opportunity for stakeholders to provide new clinical information that
was not available at the time of the RUC valuation that might affect
work RVU values that are adopted in the interim final value process.
For CY 2015 interim final rates, we stated in the CY 2015 PFS final
rule with comment period that we will use the refinement panel process
as usual for these codes (79 FR 67609).
2. CY 2016 Refinement Panel Proposal
Beginning in CY 2016, we are proposing to permanently eliminate the
refinement panel and instead publish the proposed rates for all interim
final codes in the PFS proposed rule for the subsequent year. For
example, we will publish the proposed rates for all CY 2016 interim
final codes in the CY 2017 PFS proposed rule. With the change in the
process for valuing codes adopted in the CY 2015 final rule with
comment period (79 FR 67606), proposed values for most codes that are
being valued for CY 2016 will be published in the CY 2016 PFS proposed
rule. As explained in the CY 2015 final rule with comment period, only
a small number of codes being valued for CY 2016 will be published as
interim final in the 2016 PFS final rule with comment period and be
subject to comment. We will evaluate the comments we receive on these
code values, and both respond to these comments and propose values for
these codes for CY 2017 in the CY 2017 PFS proposed rule. Therefore,
stakeholders will have two opportunities to comment and to provide any
new clinical information that was not available at the time of the RUC
valuation that might affect work RVU values that are adopted on an
interim final basis. We believe that this proposed process, which
includes two opportunities for public notice and comment, offers
stakeholders a better mechanism and ample opportunity for providing any
additional data for our consideration, and discussing any concerns with
our interim final values, than the current refinement process. It also
provides greater transparency because comments on our rules are made
available to the public at www.regulations.gov. We welcome comments on
this proposed change to eliminate the use of refinement panels in our
process for establishing final values for interim final codes.

E. Improving Payment Accuracy for Primary Care and Care Management
Services

We are committed to supporting primary care, and we have
increasingly recognized care management as one of the critical
components of primary care that contributes to better health for
individuals and reduced expenditure growth (77 FR 68978). Accordingly,
we have prioritized the development and implementation of a series of
initiatives designed to improve the accuracy of payment for, and
encourage long-term investment in, care management services.

[[Page 41709]]

In addition to the Medicare Shared Savings Program, various
demonstration initiatives including the Pioneer Accountable Care
Organization (ACO), the patient-centered medical home model in the
Multi-payer Advanced Primary Care Practice (MAPCP), the Federally
Qualified Health Center (FQHC) Advanced Primary Care Practice
demonstration, the Comprehensive Primary Care (CPC) initiative, among
others (see the CY 2015 PFS final rule (79 FR 67715) for a discussion
of these), we also have continued to explore potential refinements to
the PFS that would appropriately value care management within
Medicare's statutory structure for fee-for-service physician payment
and quality reporting. The payment for some non-face-to-face care
management services is bundled into the payment for face-to-face
evaluation and management (E/M) visits. However, because the current E/
M office/outpatient visit CPT codes were designed with an overall
orientation toward episodic treatment, we have recognized that these E/
M codes may not reflect all the services and resources involved with
furnishing certain kinds of care, particularly comprehensive,
coordinated care management for certain categories of beneficiaries.
Over several years, we have developed proposals and sought
stakeholder input regarding potential PFS refinements to improve the
accuracy of payment for care management services. For example, in the
CY 2013 PFS final rule with comment period, we adopted a policy to pay
separately for transitional care management (TCM) involving the
transition of a beneficiary from care furnished by a treating physician
during an inpatient stay to care furnished by the beneficiary's primary
physician in the community (77 FR 68978 through 68993). In the CY 2014
PFS final rule with comment period, we finalized a policy, beginning in
CY 2015 (78 FR 74414), to pay separately for chronic care management
(CCM) services furnished to Medicare beneficiaries with two or more
chronic conditions. We believe that these new separately billable codes
more accurately describe, recognize, and make payment for non-face-to-
face care management services furnished by practitioners and clinical
staff to particular patient populations.
We view ongoing refinements to payment for care management services
as part of a broader strategy to incorporate input and information
gathered from research, initiatives, and demonstrations conducted by
CMS and other public and private stakeholders, the work of all parties
involved in the potentially misvalued code initiative, and, more
generally, from the public at large. Based on input and information
gathered from these sources, we are considering several potential
refinements that would continue our efforts to improve the accuracy of
PFS payments. In this section, we discuss these potential refinements.
1. Improved Payment for the Professional Work of Care Management
Services
Although both the TCM and CCM services describe certain aspects of
professional work, some stakeholders have suggested that neither of
these new sets of codes nor the inputs used in their valuations
explicitly account for all of the services and resources associated
with the more extensive cognitive work that primary care physicians and
other practitioners perform in planning and thinking critically about
the individual chronic care needs of particular subsets of Medicare
beneficiaries. Stakeholders assert that the time and intensity of the
cognitive efforts are in addition to the work typically required to
supervise and manage the clinical staff associated with the current TCM
and CCM codes. Similarly, we continue to receive requests from a few
stakeholders for CMS to lead efforts to revise the current CPT E/M
codes or construct a new set of E/M codes. The goal of such efforts
would be to better describe and value the physician work (time and
intensity) specific to primary care and other cognitive specialties in
the context of complex care of patients relative to the time and
intensity of the procedure-oriented care physicians and practitioners,
who use the same codes to report E/M services. Some of these
stakeholders have suggested that in current medical practice, many
physicians, in addition to the time spent treating acute illnesses,
spend substantial time working toward optimal outcomes for patients
with chronic conditions and patients they treat episodically, which can
involve additional work not reflected in the codes that describe E/M
services since that work is not typical across the wide range of
practitioners that report the same codes. According to these groups,
this work involves medication reconciliation, the assessment and
integration of numerous data points, effective coordination of care
among multiple other clinicians, collaboration with team members,
continuous development and modification of care plans, patient or
caregiver education, and the communication of test results.
We agree with stakeholders that it is important for Medicare to use
codes that accurately describe the services furnished to Medicare
beneficiaries and to accurately reflect the relative resources involved
with furnishing those services. Therefore, we are interested in
receiving public comments on ways to recognize the different resources
(particularly in cognitive work) involved in delivering broad-based,
ongoing treatment, beyond those resources already incorporated in the
codes that describe the broader range of E/M services. The resource
costs of this work may include the time and intensity related to the
management of both long-term and, in some cases, episodic conditions.
In order to appropriately recognize the different resource costs for
this additional cognitive work within the structure of PFS resource-
based payments, we are particularly interested in codes that could be
used in addition to, not instead of, the current E/M codes.
In principle, these codes could be similar to the hundreds of
existing add-on codes that describe additional resource costs, such as
additional blocks or slides in pathology services, additional units of
repair in dermatologic procedures, or additional complexity in
psychotherapy services. For example, these codes might allow for the
reporting of the additional time and intensity of the cognitive work
often undertaken by primary care and other cognitive specialties in
conjunction with an evaluation and management service, much like add-on
codes for certain procedures or diagnostic test describe the additional
resources sometimes involved in furnishing those services. Similar to
the CCM code, the codes might describe the increased resources used
over a longer period of time than during one patient visit. For
example, the add-on codes could describe the professional time in
excess of 30 minutes and/or a certain set of furnished services, per
one calendar month for a single patient to coordinate care, provide
patient or caregiver education, reconcile and manage medications,
assess and integrate data, or develop and modify care plans. Such
activity may be particularly relevant for the care of patients with
multiple or complicated chronic or acute conditions and should
contribute to optimal patient outcomes, including more coordinated,
safer care.
Like CCM, we would require that the patient have an established
relationship with the billing professional; and additionally, the use
of an add-on code would require the extended professional resources to
be reported with another

[[Page 41710]]

separately payable service. However, in contrast to the CCM code, the
new codes might be reported based on the resources involved in
professional work, instead of the resource costs in terms of clinical
staff time. The codes might also apply broadly to patients in a number
of different circumstances, and would not necessarily make reporting
the code(s) contingent on particular business models or technologies
for medical practices. We are interested in stakeholder comments on the
kinds of services that involve the type of cognitive work described
above and whether or not the creation of particular codes might improve
the accuracy of the relative values used for such services on the PFS.
Finally, we are interested in receiving information from stakeholders
on the overlap between the kinds of cognitive resource costs discussed
above and those already accounted for through the currently payable
codes that describe CCM and other care management services.
We strongly encourage stakeholders to comment on this topic in
order to assist us in developing potential proposals to address these
issues through rulemaking in CY 2016 for implementation in CY 2017. We
anticipate using this approach, which would parallel our multi-year
approach for implementing CCM and TCM services, in order to facilitate
broader input from stakeholders regarding details of implementing such
codes, including their structure and description, valuation, and any
requirements for reporting.
2. Establishing Separate Payment for Collaborative Care
We believe that the care and management for Medicare beneficiaries
with multiple chronic conditions, a particularly complicated disease or
acute condition, or common behavioral health conditions often requires
extensive discussion, information-sharing and planning between a
primary care physician and a specialist (for example, with a
neurologist for a patient with Alzheimer's disease plus other chronic
diseases). We note that for CY 2014, CPT created four codes that
describe interprofessional telephone/internet consultative services
(CPT codes 99446-99449). Because Medicare pays for telephone
consultations with or about a beneficiary as a part of other services
furnished to the beneficiary, we currently do not make separate payment
for these services. We note that such interprofessional consultative
services are distinct from the face-to-face visits previously reported
to Medicare using the consultation codes, and we refer the reader to
the CY 2010 PFS final rule for information regarding Medicare payment
policies for those services (74 FR 61767).
However, in considering how to improve the accuracy of our payments
for care coordination particularly for patients requiring more
extensive care, we are seeking comment on how Medicare might accurately
account for the resource costs of a more robust interprofessional
consultation within the current structure of PFS payment. For example,
we would be interested in stakeholders' perspectives regarding whether
there are conditions under which it might be appropriate to make
separate payment for services like those described by these CPT codes.
We are interested in stakeholder input regarding the parameters of, and
resources involved in these collaborations between a specialist and
primary care practitioner, especially in the context of the structure
and valuation of current E/M services. In particular, we are interested
in comments about how these collaborations could be distinguished from
the kind of services included in other E/M services, how these services
could be described if stakeholders believe the current CPT codes are
not adequate, and how these services should be valued on the PFS. We
are also interested in comments on whether we should tie those
interprofessional consultations to a beneficiary encounter and on
developing appropriate beneficiary protections to ensure that
beneficiaries are fully aware of the involvement of the specialist in
the beneficiary's care and the associated benefits of the collaboration
between the primary care physician and the specialist physician prior
to being billed for such services.
Additionally, we are seeking comment on whether this kind of care
might benefit from inclusion in a CMMI model that would allow Medicare
to test its effectiveness with a waiver of beneficiary financial
liability and/or variation of payment amounts for the consulting and
the primary care practitioners. Without such protections, beneficiaries
could be responsible for coinsurance for services of physicians whose
role in the beneficiary's care is not necessarily understood by the
beneficiary. Finally, we also are seeking comment on key technology
supports needed to support collaboration between specialist and primary
care practitioners in support of high quality care management services,
on whether we should consider including technology requirements as part
of any proposed services, and on how such requirements could be
implemented in a way that minimizes burden on providers. We strongly
encourage stakeholders to comment on this topic in order to assist us
in developing potential proposals to address these issues through
rulemaking in CY 2016 for implementation in CY 2017. We anticipate
using this approach, which would parallel our multi-year approach for
implementing CCM and TCM services, in order to facilitate broader input
from stakeholders regarding details of implementing such codes,
including their structure and description, valuation, and any
requirements for reporting.
a. Collaborative Care Models for Beneficiaries With Common Behavioral
Health Conditions
In recent years, many randomized controlled trials have established
an evidence base for an approach to caring for patients with common
behavioral health conditions called ``Collaborative Care.''
Collaborative care typically is provided by a primary care team,
consisting of a primary care provider and a care manager, who works in
collaboration with a psychiatric consultant, such as a psychiatrist.
Care is directed by the primary care team and includes structured care
management with regular assessments of clinical status using validated
tools and modification of treatment as appropriate. The psychiatric
consultant provides regular consultations to the primary care team to
review the clinical status and care of patients and to make
recommendations. Several resources have been published that describe
collaborative care models in greater detail and assess their impact,
including pieces from the University of Washington (http://aims.uw.edu/
), the Institute for Clinical and Economic Review (http://ctaf.org/reports/integration-behavioral-health-primary-care), and the Cochrane
Collaboration (http://www.cochrane.org/CD006525/DEPRESSN_collaborative-care-for-people-with-depression-and-anxiety).
Because this particular kind of collaborative care model has been
tested and documented in medical literature, we are particularly
interested in seeking comment on how coding under the PFS might
facilitate appropriate valuation of the services furnished under such a
collaborative care model. As these kinds of collaborative models of
care become more prevalent, we will evaluate potential refinements to
the PFS to account for the provision of services through such a model.
We are seeking information to assist us in considering refinements to
coding and payment to

[[Page 41711]]

address this model in particular. We also would assess application of
the collaborative care model for other diagnoses and treatment
modalities. For example, we seek comments on how a code similar to the
CCM code applicable to multiple diagnoses and treatment plans could be
used to describe collaborative care services, as well as other
interprofessional services and could be appropriately valued and
reported within the resource-based relative value PFS system, and how
the resources involved in furnishing such services could be
incorporated into the current set of PFS codes without overlap. We also
request input on whether requirements similar to those used for CCM
services should apply to a new collaborative care code, and whether
such a code could be reported in conjunction with CCM or other E/M
services. For example, we might consider whether the code should
describe a minimum amount of time spent by the psychiatric consultant
for a particular patient per one calendar month and be complemented by
either the CCM or other care management code to support the care
management and primary care elements of the collaborative care model.
As with our discussion on interprofessional consultation in this
section of the proposed rule, because the patient may not have direct
contact with the psychiatric consultant, we seek comment on whether
and, if so, how written consent for the non-face-to-face services
should be required prior to practitioners reporting any new
interprofessional consultation code or the care management code.
We are also seeking comment on appropriate care delivery
requirements for billing, the appropriateness of CCM technology
requirements or other technology requirements for these services,
necessary qualifications for psychiatric consultants, and whether or
not there are particular conditions for which payment would be more
appropriate than others; as well as how these services may interact
with quality reporting, the resource inputs we might use to value the
services under the PFS (specifically, work RVUs, time, and direct PE
inputs), and whether or not separate codes should be developed for the
psychiatric consultant and the care management components of the
service.
We are also seeking comment on whether this kind of care model
should be implemented through a CMMI demonstration that would allow
Medicare to test its effectiveness with a waiver of beneficiary
financial liability and/or variation of payment methodology and amounts
for the psychiatric consultant and the primary care physician. Again,
we strongly encourage stakeholders to comment on this topic in order to
assist us in developing potential proposals to address these issues
through rulemaking in CY 2016 for implementation in CY 2017.
3. CCM and TCM Services
a. Reducing Administrative Burden for CCM and TCM Services
In CY 2013, we implemented separate payment for TCM services, and
in CY 2015, we implemented separate payment for CCM services. Both have
many service elements and billing requirements that the physician or
nonphysician practitioner must satisfy in order to fully furnish these
services and to report these codes (77 FR 68989, 79 FR 67728). These
elements and requirements are relatively extensive and generally exceed
those for other E/M and similar services. Since the implementation of
these services, some practitioners have stated that the service
elements and billing requirements are too burdensome, and suggested
that they interfere with their ability to provide these care management
services to their patients who could benefit from them. In light of
this feedback from the physician and practitioner community, we are
soliciting comments on steps that we could take to further improve
beneficiary access to TCM and CCM services. Our aims in implementing
separate payment for these services are that Medicare practitioners are
paid appropriately for the services they furnish, and that
beneficiaries receive comprehensive care management that benefits their
long term health outcomes. However, we understand that excessive
requirements on practitioners could possibly undermine the overall
goals of the payment policies. We are interested in stakeholder input
in how we can best balance access to these services and practitioner
burdens such that Medicare beneficiaries may obtain the full benefit of
these services.
b. Payment for CPT Codes Related to CCM Services
As we stated in the CY 2015 PFS final rule (79 FR 67719), we
believe that Medicare beneficiaries with two or more chronic conditions
as defined under the CCM code can benefit from the care management
services described by that code, and we want to make this service
available to all such beneficiaries. As with most services paid under
the PFS, we recognize that furnishing CCM services to some
beneficiaries will require more resources and some less; but we value
and make payment based upon the typical service. Because CY 2015 is the
first year for which we are making separate payment for CCM services,
we are seeking information regarding the circumstances under which this
service is furnished. This information includes the clinical status of
the beneficiaries receiving the service and the resources involved in
furnishing the service, such as the number of documented non-face-to-
face minutes furnished by clinical staff in the months the code is
reported. We would be interested in examining such information in order
to identify the range of minutes furnished over those months as well as
the distribution of the number of minutes within the total volume of
services. We are also seeking objective data regarding the resource
costs associated with furnishing the services described by this code.
As we review that information, in addition to our own claims data, we
will consider any changes in payment and coding that may be warranted
in the coming years, including the possibility of establishing separate
payment amounts and making Medicare payment for the related CPT codes,
such as the complex care coordination codes, CPT codes 99487 and 99489.

F. Target for Relative Value Adjustments for Misvalued Services

Section 220(d) of the Protecting Access to Medicare Act of 2014
(PAMA) (Pub. L. 113-93, enacted on April 1, 2014) added a new
subparagraph at section 1848(c)(2) of the Act to establish an annual
target for reductions in PFS expenditures resulting from adjustments to
relative values of misvalued codes. Under section 1848(c)(2)(O)(ii) of
the Act, if the estimated net reduction in expenditures for a year is
equal to or greater than the target for the year, reduced expenditures
attributable to such adjustments shall be redistributed in a budget-
neutral manner within the PFS in accordance with the existing budget
neutrality requirement under section 1848(c)(2)(B)(ii)(II) of the Act.
The provision also specifies that the amount by which such reduced
expenditures exceeds the target for a given year shall be treated as a
net reduction in expenditures for the succeeding year, for purposes of
determining whether the target has been met for that subsequent year.
Section 1848(c)(2)(O)(iv) of the Act defines a target recapture amount
as the amount by which the target for the year exceeds the estimated
net reduction in expenditures under the PFS resulting from adjustments
to RVUs for misvalued codes. Section 1848(c)(2)(O)(iii) of the

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Act specifies that, if the estimated net reduction in PFS expenditures
for the year is less than the target for the year, an amount equal to
the target recapture amount shall not be taken into account when
applying the budget neutrality requirements specified in section
1848(c)(2)(B)(ii)(II) of the Act. Section 220(d) of the PAMA applied to
calendar years (CYs) 2017 through 2020 and set the target under section
1848(c)(2)(O)(v) of the Act at 0.5 percent of the estimated amount of
expenditures under the PFS for each of those 4 years.
Section 202 of the Achieving a Better Life Experience Act of 2014
(ABLE) (Division B of Pub. L. 113-295, enacted December 19, 2014))
amended section 1848(c)(2)(O) of the Act to accelerate the application
of the PFS expenditure reduction target to CYs 2016, 2017, and 2018,
and to set a 1 percent target for CY 2016 and 0.5 percent for CYs 2017
and 2018. As a result of these provisions, if the estimated net
reduction for a given year is less than the target for that year,
payments under the fee schedule will be reduced.
In this section, we are proposing a methodology to implement this
statutory provision in a manner consistent with the broader statutory
construct of the PFS. In developing this proposed methodology, we have
identified several aspects of our approach for which we are
specifically seeking comment. We have organized this discussion by
identifying and explaining these aspects in particular but we are
seeking comment on all aspects of our proposal.
1. Distinguishing ``Misvalued Code'' Adjustments From Other RVU
Adjustments
The potentially misvalued code initiative has resulted in changes
in PFS payments in several ways. First, potentially misvalued codes
have been identified, reviewed, and revalued through notice and comment
rulemaking. However, in many cases, the identification of particular
codes as potentially misvalued has led to the review and revaluation of
related codes, and frequently, to revisions to the underlying coding
for large sets of related services. Similarly, the review of individual
codes has initiated reviews and proposals to make broader adjustments
to values for codes across the PFS, such as when the review of a series
of imaging codes prompted a RUC recommendation and CMS proposal to
update the direct PE inputs for imaging services to assume digital
instead of film costs. This change, originating through the misvalued
code initiative, resulted in a significant reduction in RVUs for a
large set of PFS services, even though the majority of affected codes
were not initially identified through potentially misvalued code
screens. Finally, due to both the relativity inherent in the PFS
ratesetting process and the budget neutrality requirements specified in
section 1848(c)(2)(B)(ii)(II) of the Act, adjustments to the RVUs for
individual services necessarily result in the shifting of RVUs to broad
sets of other services across the PFS.
To implement the PFS expenditure reduction target provisions under
section 1848(c)(2)(O) of the Act, we must identify a subset of the
adjustments in RVUs for a year to reflect an estimated ``net
reduction'' in expenditures. Therefore, we dismissed the possibility of
including all changes in RVUs for a year in calculating the estimated
net reduction in PFS expenditures, even though we believe that the
redistributions in RVUs to other services are an important aspect of
the potentially misvalued code initiative. Conversely, we similarly
considered the possibility of limiting the calculation of the estimated
net reduction in expenditures to reflect RVU adjustments made to the
codes formally identified as ``potentially misvalued.'' We do not
believe that calculation would reflect the significant changes in
payments that have directly resulted from the review and revaluation of
misvalued codes under section 1848(c)(2) of the Act. We further
considered whether to include only those codes that underwent a
comprehensive review (work and PE). As we previously have stated (76 FR
73057), we believe that a comprehensive review of the work and PE for
each code leads to the more accurate assignment of RVUs and appropriate
payments under the PFS than do fragmentary adjustments for only one
component. However, if we calculated the net reduction in expenditures
using revisions to RVUs only from comprehensive reviews, the
calculation would not include changes in PE RVUs that result from
proposals like the film-to-digital change for imaging services, which
not only originated from the review of potentially misvalued codes, but
substantially improved the accuracy of PFS payments faster and more
efficiently than could have been done through the multiple-year process
required to complete a comprehensive review of all imaging codes.
After considering these options, we believe that the best approach
is to define the reduction in expenditures as a result of adjustments
to RVUs for misvalued codes to include the estimated pool of all
services with revised input values. This would limit the pool of RVU
adjustments used to calculate the net reduction in expenditures to
those for the services for which individual, comprehensive review or
broader proposed adjustments have resulted in changes to service-level
inputs of work RVUs, direct PE inputs, or MP RVUs, as well as services
directly affected by changes to coding for related services. For
example, coding changes in certain codes can sometimes necessitate
revaluations for related codes that have not been reviewed as misvalued
codes, because the coding changes have also affected the scope of the
related services. This definition would incorporate all reduced
expenditures from revaluations for services that are deliberately
addressed as potentially misvalued codes, as well as those for services
with broad-based adjustments like film-to-digital and services that are
redefined through coding changes as a result of the review of misvalued
codes.
Because the annual target is calculated by measuring changes from
one year to the next, we also considered how to account for changes in
values that are best measured over 3 years, instead of 2 years. Under
our current process, the overall change in valuation for many misvalued
codes is measured across values for 3 years: The original value in the
first year, the interim final value in the second year, and the
finalized value in the third year. As we describe in section II.I.2. of
this proposed rule, our misvalued code process has been to establish
interim final RVUs for the potentially misvalued, new, and revised
codes in the final rule with comment period for a year. Then, during
the 60-day period following the publication of the final rule with
comment period, we accept public comment about those valuations. For
the final rule with comment period for the subsequent year, we consider
and respond to public comments received on the interim final values,
and make any appropriate adjustments to values based on those comments.
However, the straightforward calculation of the target would only
compare changes between 2 years and not among 3 years, so the
contribution of a particular change towards the target for any single
year would be measured against only the preceding year without regard
to the overall change that takes place over 3 years.
For recent years, interim final values for misvalued codes (year 2)
have generally reflected reductions relative to original values (year
1), and for most codes, the interim final values (year 2) are
maintained and finalized (year 3). However, when values for particular

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codes have changed between the interim final (year 2) and final values
(year 3) based on public comment, the general tendency has been that
codes increase in the final value (year 3) relative to the interim
final value (year 2), even in cases where the final value (year 3)
represents a decrease from the original value (year 1). Therefore, for
these codes, the year 2 changes compared to year 1 would risk over-
representing the overall reduction, while the year 3 to year 2 changes
would represent an increase in value. If there were similar targets in
every PFS year, and a similar number of misvalued code changes made on
an interim final basis, the incongruence in measuring what is really a
3-year change in 2-year increments might not be particularly
problematic since each year's calculation would presumably include a
similar number of codes measured between years 1 and 2 and years 2 and
3.
However, including changes that take place over 3 years is
particularly problematic for calculating the target for CY 2016 for two
reasons. First, CY 2015 was the final full year of establishing interim
final values for all new, revised, and potentially misvalued codes.
Starting with this proposed rule, we are proposing and finalizing
values for a significant portion of misvalued codes during one calendar
year. Therefore, CY 2015 will include a disproportionate number of
services that would be measured between years 2 and 3 relative to the
services measured between 1 and 2 years. Second, because there was no
target for CY 2015, any reductions that occurred on an interim final
basis for CY 2015 were not counted toward achievement of a target. If
we were to include any upward adjustments made to these codes based on
public comment as ``misvalued code'' changes for CY 2016, we would
effectively be counting the service-level increases for 2016 (year 3)
relative to 2015 (year 2) against achievement of the target without any
consideration to the service-level changes relative to 2014 (year 1),
even in cases where the overall change in valuation was negative.
Therefore, we are proposing to exclude code-level input changes for
CY 2015 interim final values from the calculation of the CY 2016
misvalued code target since the misvalued change occurred over multiple
years, including years not applicable to the misvalued code target
provision.
We note that the impact of interim final values in the calculation
of targets for future years will be diminished as we transition to
proposing values for almost all new, revised, and potentially misvalued
codes in the proposed rule. We anticipate a smaller number of interim
final values for CY 2016 relative to CY 2015. For calculation of the CY
2018 target, we anticipate almost no impact based on misvalued code
adjustments that occur over multiple years.
The list of codes with proposed changes for CY 2016 included under
this proposed definition of ``adjustments to RVUs for misvalued codes''
is available on the CMS Web site under downloads for the CY 2016 PFS
proposed rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
2. Calculating ``Net Reduction''
Once the RVU changes attributable to misvalued codes are
identified, estimated net reductions would be calculated summing the
decreases and offsetting any applicable increases in valuation within
the changes defined as misvalued, as described above. Because the
provision only explicitly addresses reductions, and we recognize many
stakeholders will want to maximize the overall magnitude of the
measured reductions in order to prevent an overall reduction to the PFS
conversion factor, we considered the possibility of ignoring the
applicable increases in valuation in the calculation of net reduction.
However, we believe that the requirement to calculate ``net''
reductions implies that we are to take into consideration both
decreases and increases. Additionally, we believe this approach may be
the only practical one due to the presence of new and deleted codes on
an annual basis.
For example, a service that is described by a single code in a
given year, like intensity-modulated radiation therapy (IMRT) treatment
delivery, could be addressed as a misvalued service in a subsequent
year through a coding revision that splits the service into two codes,
``simple'' and ``complex.'' If we counted only the reductions in RVUs,
we would count only the change in value between the single code and the
new code that describes the ``simple'' treatment delivery code. In this
scenario, the change in value from the single code to the new
``complex'' treatment delivery code would be ignored, so that even if
there were an increase in the payment for IMRT treatment delivery
service(s) overall, the mere change in coding would contribute
inappropriately to a ``net reduction in expenditures.'' Therefore, we
are proposing to net the increases and decreases in values for
services, including those for which there are coding revisions, in
calculating the estimated net reduction in expenditures as a result of
adjustments to RVUs for misvalued codes.
3. Measuring the Adjustments
The most straightforward method to estimating the net reduction in
expenditures due to adjustments to RVUs for misvalued codes is to
compare the total RVUs of the relevant set of codes (by volume) in the
current year to the update year, and divide that by the total RVUs for
all codes (by volume) for the current year. This approach is intuitive
and relatively easy to replicate.
However, this method is imprecise for several reasons. First, and
most significantly, the code-level PE RVUs in the update year include
either increases due to the redistribution of RVUs from other services
or reductions due to increases in PE for other services. Second,
because relativity for work RVUs is maintained through annual
adjustments to the CF, the precise value of a work RVU in any given
year is adjusted based on the total number of work RVUs in that year.
Finally, relativity for the MP RVUs is maintained by both
redistribution of MP RVUs and adjustments to the CF, when necessary
(under our proposed methodology this is true annually; based on our
established methodology the redistribution of the MP RVUs only takes
place once every 5 years and the CF is adjusted otherwise). Therefore,
to make a more precise assessment of the net reduction in expenditures
that are the result of adjustments to the RVUs for misvalued codes, we
would need to compare, for the included codes, the update year's total
work RVUs (by volume), direct PE RVUs (by volume), indirect PE RVUs (by
volume), and MP RVUs (by volume) to the same RVUs in the current year,
prior to the application of any scaling factors or adjustments. This
would make for a direct comparison between years.
However, this approach would mean that the calculation of the net
reduction in expenditures would occur within various steps of the PFS
ratesetting methodology. While we believe that this approach would be
transparent and external stakeholders could replicate this method, it
may be difficult and time-consuming for stakeholders to do so. We also
noted that when we modeled the interaction of the phase-in legislation
and the calculation of the target using this approach during the
development of this proposal, there were methodological challenges in
making these calculations. When we simulated the two approaches using

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information from prior PFS years, we found that both approaches
generally resulted in similar estimated net reductions. After
considering these options, we are proposing to use the approach of
comparing the total RVUs (by volume) for the relevant set of codes in
the current year to the update year, and divide that result by the
total RVUs (by volume) for the current year. We seek comment on whether
comparing the update year's work RVUs, direct PE RVUs, indirect PE
RVUs, and MP RVUs for the relevant set of codes (by volume) prior to
the application of any scaling factors or adjustments to those of the
current year would be a preferable methodology for determining the
estimated net reduction.
4. Estimating the Target for CY 2016
CY 2016 represents a transition year in our new process of
proposing values for new, revised and misvalued codes in the proposed
rule, rather than establishing them as interim final in the final rule
with comment period. For CY 2016, we will propose values for which we
had the RUC's recommendations by our deadline of February 10th, and
will establish interim final values for any codes received after the
February 10th deadline but in time for us to value for the final rule.
For CY 2016, there will still be a significant number of codes valued
not in the proposed rule but in the final rule with comment period. In
future years (with the exception of entirely new services), all codes,
even those for which we do not receive RUC recommendations in time for
the proposed rule, will be in the proposed rule for the subsequent year
and not in the final rule with comment period. Therefore, for CY 2016,
unlike for the targets for CY 2017 and CY 2018, because we will not be
able to calculate a realistic estimate of the target amount at the time
the proposed rule is published, we will not incorporate the impact of
the target into the calculation of the proposed PFS payment rates.
However, because we would apply any required budget neutrality
adjustment related to this provision to the conversion factor, the
proposed RVUs for individual services in this proposed rule would be
the same, regardless of the estimate of the target. We also refer
readers to the regulatory impact analysis section of this proposed rule
for an interim estimate of the estimated net reduction in expenditures
relative to the 1 percent target for CY 2016, based solely on the
proposed changes in this rule.

G. Phase-in of Significant RVU Reductions

Section 1848(c)(7) of the Act, as added by section 220(e) of the
PAMA, also specifies that for services that are not new or revised
codes, if the total RVUs for a service for a year would otherwise be
decreased by an estimated 20 percent or more as compared to the total
RVUs for the previous year, the applicable adjustments in work, PE, and
MP RVUs shall be phased-in over a 2-year period. Although section
220(e) of the PAMA required the phase-in to begin for 2017, section 202
of the ABLE Act amended section 1848(c)(7) of the Act to require that
the phase-in begin for CY 2016.
In this section, we are proposing a methodology to implement this
statutory provision. In developing this proposed methodology, we have
identified several aspects of our approach for which we are
specifically seeking comment, given the challenges inherent in
implementing this provision in a manner consistent with the broader
statutory construct of the PFS. We have organized this discussion by
identifying and explaining these aspects in particular but we are
seeking comment on all aspects of our proposal.
1. Identifying Services that are Not New or Revised Codes
As described in this proposed rule, the statute specifies that
services described by new or revised codes are not subject to the
phase-in of RVUs. We believe this exclusion recognizes the reality that
there is no practical way to phase-in over 2 years changes to RVUs that
occur as a result of a coding change for a particular service because
there is no relevant reference code or value on which to base the
transition. To determine which services are described by new or revised
codes for purposes of the phase-in provision, we are proposing to apply
the phase-in to all services that are described by the same, unrevised
code in both the current and update year, and to exclude codes that
describe different services in the current and update year. This
approach would exclude services described by new codes or existing
codes for which the descriptors were altered substantially for the
update year to change the services that are reported using the code. We
would also exclude as new and revised codes those codes that describe a
different set of services in the update year when compared to the
current year by virtue of changes in other, related codes, or codes
that are part of a family with significant coding revisions. For
example, significant coding revisions within a family of codes can
change the relationships among codes to the extent that it changes the
way that all services in the group are reported, even if some
individual codes retain the same number or, in some cases, the same
descriptor. Excluding codes from the phase-in when there are
significant revisions to the code family would also help to maintain
the appropriate rank order among codes in the family, avoiding years
for which RVU changes for some codes in a family are in transition
while others were fully implemented. This proposed application of the
phase-in would also be consistent with previous RVU transitions,
especially for PE RVUs, for which we only applied transition values to
those codes that described the same service in both the current and the
update years. We would also exclude from the phase-in as new and
revised codes those codes with changes to the global period, since the
code in the current year would not describe the same units of service
as the code in the update year.
2. Estimating the 20 Percent Threshold
Because the phase-in of RVUs falls within the budget neutrality
requirements specified in section 1848(c)(2)(B)(ii)(II) of the Act, we
are proposing to estimate total RVUs for a service prior to the budget-
neutrality redistributions that result from implementing phase-in
values. We recognize that the result of this approach could mean that
some codes may not qualify for the phase-in despite a reduction in RVUs
that is ultimately slightly greater than 20 percent due to budget
neutrality adjustments that are made after identifying the codes that
meet the threshold in order to reflect the phase-in values for other
codes. We believe the only alternative to this approach is not
practicable, since it would be circular, resulting in cyclical
iteration.
3. RVUs in the First Year of the Phase-In
Section 1848(c)(7) of the Act states that the applicable
adjustments in work, PE, and MP RVUs shall be phased-in over a 2-year
period when the RVU reduction for a code is estimated to be equal to or
greater than 20 percent. We believe that there are two reasonable ways
to determine the portion of the reduction to be phase-in for the first
year. Most recent RVU transitions have distributed the values evenly
across several years. For example, for a 2-year transition we would
estimate the fully implemented value and set a rate

[[Page 41715]]

approximately 50 percent between the value for the current year and the
value for the update year. We believe that this is the most intuitive
approach to the phase-in and is likely the expectation for many
stakeholders. However, we believe that the 50 percent phase-in in the
first year has a significant drawback. For instance, since the statute
establishes a 20 percent threshold as the trigger for phasing in the
change in RVUs, under the 50 percent phase-in approach, a service that
is estimated to be reduced by a total of 19 percent for an update year
would be reduced by a full 19 percent in that update year, while a
service that is estimated to be reduced by 20 percent in an update year
would only be reduced 10 percent in that update year.
The logical alternative approach is to consider a 19 percent
reduction as the maximum 1-year reduction for any service not described
by a new or revised code. This approach would be to reduce the service
by the maximum allowed amount (that is, 19 percent) in the first year,
and then phase in the remainder of the reduction in the second year.
Under this approach, the code that is reduced by 19 percent in a year
and the code that would otherwise have been reduced by 20 percent would
both be reduced by 19 percent in the first year, and the latter code
would see an additional 1 percent reduction in the second year of the
phase-in. For most services, this would likely mean that the majority
of the reduction would take place in the first year of the phase-in.
However, for services with the most drastic reductions (greater than 40
percent), the majority of the reduction would take place in the second
year of the phase-in.
After considering both of these options, we are proposing to
consider the 19 percent reduction as the maximum 1-year reduction and
to phase-in any remaining reduction greater than 19 percent in the
second year of the phase-in. We believe that this approach is more
equitable for codes with significant reductions but that are less than
20 percent. We are seeking comment on this proposal.
4. Applicable Adjustments to RVUs
The phase-in provision instructs that the applicable adjustments in
work, PE, and MP RVUs be phased-in over 2 years for any service that
would otherwise be decreased by an estimated amount equal to or greater
than 20 percent as compared to the total RVUs for the previous year.
However, for several thousand services, we develop separate RVUs for
facility and nonfacility sites of service. For nearly one thousand
other services, we develop separate RVUs for the professional and
technical components of the service and sum those RVUs to allow for
global billing. Therefore, for individual practitioners furnishing
particular services to Medicare beneficiaries, the relevant changes in
RVUs for a particular code are based on the total RVUs for a code for a
particular setting (facility/nonfacility) or for a particular component
(professional/technical). We believe the most straightforward and fair
approach to addressing both the site of service differential and the
codes with professional and technical components is to consider the
RVUs for the different sites of service and components independently
for purposes of identifying when and how the phase-in applies. We are
proposing, therefore, to estimate whether a particular code meets the
20 percent threshold for change in total RVUs by taking into account
the total RVUs that apply to a particular setting or to a particular
component. This would mean that if the change in total facility RVUs
for a code met the threshold, then that change would be phased-in over
2 years, even if the change for the total nonfacility RVUs for the same
code would not be phased-in over 2 years. Similarly, if the change in
the total RVUs for the technical component of a service meets the 20
percent threshold, then that change would be phased-in over 2 years,
even if the change for the professional component did not meet the
threshold. (Because the global is the sum of the professional and
technical components, the portion of the global attributable to the
technical component would then be phased-in, while the portion
attributable to the professional component would not be.)
However, we note that we create the site of service differential
exclusively by developing independent PE RVUs for each service in the
nonfacility and facility settings. That is, for these codes, we use the
same work RVUs and MP RVUs in both settings and vary only the PE RVUs
to implement the difference in resources depending on the setting.
Similarly, we use the work RVUs assigned to the professional component
codes as the work RVUs for the service when billed globally. Like the
codes with the site of service differential, the PE RVUs for each
component are developed independently. The resulting PE RVUs are then
summed for use as the PE RVUs for the code, billed globally. Since
variation of PE RVUs is the only constant across all individual codes,
codes with site of service differentials, and codes with professional
and technical components, we are proposing to apply all adjustments for
the phase-in to the PE RVUs.
We considered alternatives to this approach. For example, for codes
with a site of service differential, we considered applying a phase-in
for codes in both settings (and all components) whenever the total RVUs
in either setting reached the 20 percent threshold. However, there are
cases where the total RVUs for a code in one setting (or one component)
may reach the 20 percent reduction threshold, while the total RVUs for
the other setting (or other component) are increasing. In those cases,
applying phase-in values for work or MP RVUs would mean applying an
additional increase in total RVUs for particular services. We also
considered basing the phase-in of the RVUs for the component codes
billed globally and for the codes with site of service differentials
developing an overall, blended set of overall PE RVUs using a weighted
average of site of service volume in the Medicare claims data. We would
then compare the global or blended value in the prior year versus the
global or blended value in the current year and apply the phase-in to
the value for the current year before re-allocating the new value to
the respective RVUs in each setting. We did not pursue this approach
for several reasons. First, the resulting phase-in amounts would not
relate logically to the values paid to any individual practitioner,
except those who bill the PC/TC codes globally. Second, the approach
would be so administratively complicated that it would likely be
difficult to replicate or predict.
Therefore, we have concluded that applying the adjustments to the
PE RVUs for individual codes in order to effect the appropriate phase-
in amount is the most straightforward and fair approach to mitigate the
impact of significant reductions of total RVUs for services furnished
by individual practitioners. The list of codes subject to the phase-in,
and the RVUs that result from this proposed methodology, is available
on the CMS Web site under downloads for the CY 2016 PFS proposed rule
with comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

[[Page 41716]]

H. Changes for Computed Tomography (CT) Under the Protecting Access to
Medicare Act of 2014 (PAMA) (CY 2016 only)

1. Section 218(a) of the Protecting Access to Medicare Act of 2014
(PAMA)
Section 218(a) of PAMA is entitled ``Quality Incentives To Promote
Patient Safety and Public Health in Computed Tomography Diagnostic
Imaging.'' It amends the statute by reducing payment for the technical
component (TC) (and the TC of the global fee) of the PFS service and
the hospital outpatient prospective payment system (OPPS) payment (5
percent in 2016 and 15 percent in 2017 and subsequent years) for
computed tomography (CT) services identified by CPT codes 70450-70498,
71250-71275, 72125-72133, 72191-72194, 73200-73206, 73700-73706, 74150-
74178, 74261-74263, and 75571-75574 furnished using equipment that does
not meet each of the attributes of the National Electrical
Manufacturers Association (NEMA) Standard XR-29-2013, entitled
``Standard Attributes on CT Equipment Related to Dose Optimization and
Management.''
The statutory provision requires that information be provided and
attested to by a supplier and a hospital outpatient department that
indicates whether an applicable CT service was furnished that was not
consistent with the NEMA CT equipment standard, and that such
information may be included on a claim and may be a modifier. The
statutory provision also provides that such information shall be
verified, as appropriate, as part of the periodic accreditation of
suppliers under section 1834(e) of the Act and hospitals under section
1865(a) of the Act. Any reduced expenditures resulting from this
provision are not budget neutral. To implement this provision, we will
create modifier ``CT'' (Computed tomography services furnished using
equipment that does not meet each of the attributes of the National
Electrical Manufacturers Association (NEMA) XR-29-2013 standard).
Beginning in 2016, claims for CT scans described by above-listed CPT
codes (and any successor codes) that are furnished on non-NEMA Standard
XR-29-2013-compliant CT scans must include modifier ``CT'' and that
modifier will result in the applicable payment reduction for the
service.

I. Valuation of Specific Codes

1. Background
Establishing valuations for newly created and revised CPT codes is
a routine part of maintaining the PFS. Since inception of the PFS, it
has also been a priority to revalue services regularly to assure that
the payment rates reflect the changing trends in the practice of
medicine and current prices for inputs used in the PE calculations.
Initially, this was accomplished primarily through the five-year review
process, which resulted in revised work RVUs for CY 1997, CY 2002, CY
2007, and CY 2012, and revised PE RVUs in CY 2001, CY 2006, and CY
2011. Under the five-year review process, revisions in RVUs were
proposed in a proposed rule and finalized in a final rule. In addition
to the five-year reviews, in each year beginning with CY 2009, CMS and
the RUC have identified a number of potentially misvalued codes using
various identification screens, as discussed in section II.C. of this
proposed rule. Each year, when we received RUC recommendations, our
process has been to establish interim final RVUs for the potentially
misvalued codes, new codes, and any other codes for which there were
coding changes in the final rule with comment period for a year. Then,
during the 60-day period following the publication of the final rule
with comment period, we accept public comment about those valuations.
For services furnished during the calendar year following the
publication of interim final rates, we pay for services based upon the
interim final values established in the final rule with comment period.
In the final rule with comment period for the subsequent year, we
consider and respond to public comments received on the interim final
values, and make any appropriate adjustments to values based on those
comments. We then typically finalize the values for the codes.
2. Process for Valuing New, Revised, and Potentially Misvalued Codes
In the CY 2015 PFS final rule with comment period, we finalized a
new process for establishing values for new, revised and potentially
misvalued codes. Under the new process, we include proposed values for
these services in the proposed rule, rather than establishing them as
interim final in the final rule with comment period. CY 2016 represents
a transition year for this new process. For CY 2016, we are proposing
new values in the proposed rule for the codes for which we received
complete RUC recommendations by February 10, 2015. For recommendations
regarding any new or revised codes received after the February 10, 2015
deadline, including updated recommendations for codes included in this
proposed rule, we will establish interim final values in the final rule
with comment period, consistent with previous practice. We note that we
will consider all comments received in response to proposed values for
codes in this rule, including alternative recommendations to those used
in developing the proposed rule. In other words, if the RUC or other
interested stakeholders submit public comments that include new
recommendations for codes for which we propose values as part of this
proposed rule, we would consider those recommendations in developing
final values for the codes in the CY 2016 PFS final rule with comment.
Beginning with valuations for CY 2017, the new process will be
applicable to all codes. That is, beginning with rulemaking for CY
2017, we will propose values for the vast majority of new, revised, and
potentially misvalued codes and consider public comments before
establishing final values for the codes; use G-codes as necessary to
facilitate continued payment for certain services for which we do not
receive recommendations in time to propose values; and adopt interim
final values in the case of wholly new services for which there are no
predecessor codes or values and for which we do not receive
recommendations in time to propose values.
For CY 2016, we received RUC recommendations prior to February 10,
2015 for many new, revised and potentially misvalued codes and have
included proposed values for these codes in this proposed rule.
However, the RUC recommendations included CPT tracking codes instead of
the actual 2016 CPT codes that will first be made available to the
public subsequent to the publication of this proposed rule. Because CPT
procedure codes are 5 alpha-numeric characters but CPT tracking codes
typically have 6 or 7 alpha-numeric characters and CMS systems only
utilize 5-character HCPCS codes, we have developed and used alternative
5-character placeholder codes for this proposed rule. For the
convenience of stakeholders and commenters with access to the CPT
tracking codes, we have displayed a crosswalk from the 5-character
placeholder codes to the CPT tracking codes on our Web site under
downloads for the CY 2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/. The final CPT codes will be included in
the CY 2016 final rule with comment period.
3. Methodology for Establishing Work RVUs
We conducted a review of each code identified in this section and
reviewed the current work RVU (if any), RUC-

[[Page 41717]]

recommended work RVUs, intensity, time to furnish the preservice,
intraservice, and postservice activities, as well as other components
of the service that contribute to the value. Our review of recommended
work RVUs and time generally includes, but is not limited to, a review
of information provided by the RUC, HCPAC, and other public commenters,
medical literature, and comparative databases, as well as a comparison
with other codes within the Medicare PFS, consultation with other
physicians and health care professionals within CMS and the federal
government, as well as Medicare claims data. We also assessed the
methodology and data used to develop the recommendations submitted to
us by the RUC and other public commenters and the rationale for the
recommendations. In the CY 2011 PFS final rule with comment period (75
FR 73328 through 73329), we discussed a variety of methodologies and
approaches used to develop work RVUs, including survey data, building
blocks, crosswalk to key reference or similar codes, and magnitude
estimation. More information on these issues is available in that rule.
When referring to a survey, unless otherwise noted, we mean the surveys
conducted by specialty societies as part of the formal RUC process. The
building block methodology is used to construct, or deconstruct, the
work RVU for a CPT code based on component pieces of the code.
Components used in the building block approach may include preservice,
intraservice, or postservice time and post-procedure visits. When
referring to a bundled CPT code, the building block components could be
the CPT codes that make up the bundled code and the inputs associated
with those codes. Magnitude estimation refers to a methodology for
valuing physician work that determines the appropriate work RVU for a
service by gauging the total amount of physician work for that service
relative to the physician work for similar service across the PFS
without explicitly valuing the components of that work.
The PFS incorporates cross-specialty and cross-organ system
relativity. Valuing services requires an assessment of relative value
and takes into account the clinical intensity and time required to
furnish a service. In selecting which methodological approach will best
determine the appropriate value for a service, we consider the current
and recommended work and time values, as well as the intensity of the
service, all relative to other services.
Several years ago, to aid in the development of preservice time
recommendations for new and revised CPT codes, the RUC created
standardized preservice time packages. The packages include preservice
evaluation time, preservice positioning time, and preservice scrub,
dress and wait time. Currently there are six preservice time packages
for services typically furnished in the facility setting, reflecting
the different combinations of straightforward or difficult procedure,
straightforward or difficult patient, and without or with sedation/
anesthesia. Currently, there are three preservice time packages for
services typically furnished in the nonfacility setting, reflecting
procedures without and with sedation/anesthesia care.
We have developed several standard building block methodologies to
value services appropriately when they have common billing patterns. In
cases where a service is typically furnished to a beneficiary on the
same day as an evaluation and management (E/M) service, we believe that
there is overlap between the two services in some of the activities
furnished during the preservice evaluation and postservice time. We
believe that at least one-third of the work time in both the preservice
evaluation and postservice period is duplicative of work furnished
during the E/M visit. Accordingly, in cases where we believe that the
RUC has not adequately accounted for the overlapping activities in the
recommended work RVU and/or times, we adjust the work RVU and/or times
to account for the overlap. The work RVU for a service is the product
of the time involved in furnishing the service times the intensity of
the work. Preservice evaluation time and postservice time both have a
long-established intensity of work per unit of time (IWPUT) of 0.0224,
which means that 1 minute of preservice evaluation or postservice time
equates to 0.0224 of a work RVU. Therefore, in many cases when we
remove 2 minutes of preservice time and 2 minutes of postservice time
from a procedure to account for the overlap with the same day E/M
service, we also remove a work RVU of 0.09 (4 minutes x 0.0224 IWPUT)
if we do not believe the overlap in time has already been accounted for
in the work RVU. The RUC has recognized this valuation policy and, in
many cases, addresses the overlap in time and work when a service is
typically provided on the same day as an E/M service.
Table 11 contains a list of proposed work RVUs for all codes with
RUC recommendations received by February 10, 2015. Proposed work RVUs
that vary from those recommended by the RUC or for which we do not have
RUC recommendations are addressed in the portions of this section that
are dedicated to particular codes.
The work RVUs and other payment information for all CY 2016 payable
codes are available in Addendum B, including codes for which we have
proposed changes in this proposed rule subject to public comment.
Addendum B is available on the CMS Web site under downloads for the CY
2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/. The proposed time values for all CY 2016 codes are listed
in a file called ``CY 2016 PFS Work Time,'' available on the CMS Web
site under downloads for the CY 2016 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/downloads/.
4. Methodology for Establishing the Direct PE Inputs Used to Develop PE
RVUs
a. Background
On an annual basis, the RUC provides CMS with recommendations
regarding PE inputs for new, revised, and potentially misvalued codes.
We review the RUC-recommended direct PE inputs on a code-by-code basis.
Like our review of recommended work RVUs, our review of recommended
direct PE inputs generally includes, but is not limited to, a review of
information provided by the RUC, HCPAC, and other public commenters,
medical literature, and comparative databases, as well as a comparison
with other codes within the Medicare PFS, consultation with other
physicians and health care professionals within CMS and the federal
government, as well as Medicare claims data. We also assess the
methodology and data used to develop the recommendations submitted to
us by the RUC and other public commenters and the rationale for the
recommendations. When we determine that the RUC recommendations
appropriately estimate the direct PE inputs (clinical labor, disposable
supplies, and medical equipment) required for the typical service,
consistent with the principles of relativity, and reflect our payment
policies, we use those direct PE inputs to value a service. If not, we
refine the recommended PE inputs to better reflect our estimate of the
PE resources required for the service. We also confirm whether CPT
codes should have facility and/or nonfacility direct PE inputs and
refine the inputs accordingly.
Our review and refinement of RUC-recommended direct PE input
includes many refinements that are common

[[Page 41718]]

across codes as well as refinements that are specific to particular
services. Table 13 details our refinements of the RUC's direct PE
recommendations at the code-specific level. In this proposed rule, we
address several refinements that are common across codes, and
refinements to particular codes are addressed in the portions of this
section that are dedicated to particular codes. We note that for each
refinement, we indicate the impact on direct costs for that service. We
point out that, on average, in any case where the impact on the direct
cost for a particular refinement is $0.32 or less, the refinement has
no impact on the final PE RVUs. This calculation considers both the
impact on the direct portion of the PE RVU as well as the impact on the
indirect allocator for the average service. We also note that nearly
half of the refinements listed in Table 13 result in changes under the
$0.32 threshold and are unlikely to result in a change to the final
RVUs.
We also note that the proposed direct PE inputs for CY 2016 are
displayed in the proposed CY 2016 direct PE input database, available
on the CMS Web site under the downloads for the CY 2016 proposed rule
at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also
been used in developing the CY 2016 PE RVUs as displayed in Addendum B
of this proposed rule.
b. Common Refinements
(1) Changes in Work Time
Some direct PE inputs are directly affected by revisions in work
time. Specifically, changes in the intraservice portions of the work
time and changes in the number or level of postoperative visits
associated with the global periods result in corresponding changes to
direct PE inputs. Although the direct PE input recommendations
generally correspond to the work time values associated with services,
we believe that in some cases inadvertent discrepancies between work
time values and direct PE inputs should be refined in the establishment
of proposed direct PE inputs. In other cases, CMS refinement of
recommended proposed work times prompts necessary adjustments in the
direct PE inputs.
(2) Equipment Time
Prior to CY 2010, the RUC did not generally provide CMS with
recommendations regarding equipment time inputs. In CY 2010, in the
interest of ensuring the greatest possible degree of accuracy in
allocating equipment minutes, we requested that the RUC provide
equipment times along with the other direct PE recommendations, and we
provided the RUC with general guidelines regarding appropriate
equipment time inputs. We continue to appreciate the RUC's willingness
to provide us with these additional inputs as part of its PE
recommendations.
In general, the equipment time inputs correspond to the service
period portion of the clinical labor times. We have clarified this
principle, indicating that we consider equipment time as the time
within the intraservice period when a clinician is using the piece of
equipment plus any additional time that the piece of equipment is not
available for use for another patient due to its use during the
designated procedure. For those services for which we allocate cleaning
time to portable equipment items, because the portable equipment does
not need to be cleaned in the room where the service is furnished, we
do not include that cleaning time for the remaining equipment items as
those items and the room are both available for use for other patients
during that time. In addition, when a piece of equipment is typically
used during follow-up post-operative visits included in the global
period for a service, the equipment time would also reflect that use.
We believe that certain highly technical pieces of equipment and
equipment rooms are less likely to be used during all of the pre-
service or post-service tasks performed by clinical labor staff on the
day of the procedure (the clinical labor service period) and are
typically available for other patients even when one member of clinical
staff may be occupied with a pre-service or post-service task related
to the procedure. We also note that we believe these same assumptions
would apply to inexpensive equipment items that are used in conjunction
with and located in a room with non-portable highly technical equipment
items. Some stakeholders have objected to this rationale for our
refinement of equipment minutes on this basis. We refer readers to our
extensive discussion in response to those objections in the CY 2012 PFS
final rule with comment period (76 FR 73182) and the CY 2015 PFS final
rule with comment period (79 FR 67639).
(3) Standard Tasks and Minutes for Clinical Labor Tasks
In general, the preservice, intraservice period, and postservice
clinical labor minutes associated with clinical labor inputs in the
direct PE input database reflect the sum of particular tasks described
in the information that accompanies the RUC-recommended direct PE
inputs, commonly called the ``PE worksheets.'' For most of these
described tasks, there are a standardized number of minutes, depending
on the type of procedure, its typical setting, its global period, and
the other procedures with which it is typically reported. The RUC
sometimes recommends a number of minutes either greater than or less
than the time typically allotted for certain tasks. In those cases, CMS
staff reviews the deviations from the standards and any rationale
provided for the deviations. When we do not accept the RUC-recommended
exceptions, we refine the proposed direct PE inputs to match the
standard times for those tasks. In addition, in cases when a service is
typically billed with an E/M service, we remove the pre-service
clinical labor tasks to avoid duplicative inputs and to reflect the
resource costs of furnishing the typical service.
In general, clinical labor tasks fall into one of the categories on
the PE worksheets. In cases where tasks cannot be attributed to an
existing category, the tasks are labeled ``other clinical activity.''
We believe that continual addition of new and distinct clinical labor
tasks each time a code is reviewed under the misvalued code initiative
is likely to degrade relativity between newly reviewed services and
those with already existing inputs. To mitigate the potential negative
impact of these additions, our staff reviews these tasks to determine
whether they are fully distinct from existing clinical labor tasks,
typically included for other clinically similar services under the PFS,
and thoroughly explained in the recommendation. For those tasks that do
not meet these criteria, we do not accept these newly recommended
clinical labor tasks; two examples of such tasks encountered during our
review of the recommendations include ``Enter data into laboratory
information system, multiparameter analyses and field data entry,
complete quality assurance documentation'' and ``Consult with
pathologist regarding representation needed, block selection and
appropriate technique.''
In conducting our review of the RUC recommendations for CY 2016, we
noted that several of the recommended times for clinical labor tasks
associated with pathology services differed across codes, both within
the CY 2016 recommendations and in comparison to codes currently in the
direct PE database. We refer readers to Table 6 in section II.A.3. of
this proposed rule where we outline our proposed standard times for
clinical labor tasks associated with pathology services.

[[Page 41719]]

(4) Recommended Items That Are Not Direct PE Inputs
In some cases, the PE worksheets included with the RUC
recommendations include items that are not clinical labor, disposable
supplies, or medical equipment that cannot be allocated to individual
services or patients. Two examples of such items are ``emergency
service container/safety kit'' and ``service contract.'' We have
addressed these kinds of recommendations in previous rulemaking (78 FR
74242), and we do not use these recommended items as direct PE inputs
in the calculation of PE RVUs.
(5) Moderate Sedation Inputs
In the CY 2012 PFS final rule (76 FR 73043 through 73049), we
finalized a standard package of direct PE inputs for services where
moderate sedation is considered inherent in the procedure. In the CY
2015 final rule with comment period, we finalized a refinement to the
standard package to include a stretcher for the same length of time as
the other equipment items in the standard package. We are proposing to
refine the RUC's direct PE recommendations to conform to these
policies. This includes the removal of a power table where it was
included during the intraservice period, as the stretcher takes the
place of the table. These refinements are reflected in the final CY
2016 PFS direct PE input database and detailed in Table 13.
(6) New Supply and Equipment Items
The RUC generally recommends the use of supply and equipment items
that already exist in the direct PE input database for new, revised,
and potentially misvalued codes. Some recommendations include supply or
equipment items that are not currently in the direct PE input database.
In these cases, the RUC has historically recommended a new item be
created and has facilitated our pricing of that item by working with
the specialty societies to provide copies of sales invoices to us. We
received invoices for several new supply and equipment items for CY
2016. We have accepted the majority of these items and added them to
the direct PE input database. Tables 9 and 10 detail the invoices
received for new and existing items in the direct PE database. As
discussed in section II.A. of this proposed rule, we encourage
stakeholders to review the prices associated with these new and
existing items to determine whether these prices appear to be accurate.
Where prices appear inaccurate, we encourage stakeholders to provide
invoices or other information to improve the accuracy of pricing for
these items in the direct PE database. We remind stakeholders that due
to the relativity inherent in the development of RVUs, reductions in
existing prices for any items in the direct PE database increase the
pool of direct PE RVUs available to all other PFS services. Tables 9
and 10 also include the number of invoices received as well as the
number of nonfacility allowed services for procedures that use these
equipment items. We provide the nonfacility allowed services so that
stakeholders will note the impact the particular price might have on PE
relativity, as well as to identify items that are used frequently,
since we believe that stakeholders are more likely to have better
pricing information for items used more frequently. We are concerned
that a single invoice may not be reflective of typical costs and
encourage stakeholders to provide additional invoices so that we might
identify and use accurate prices in the development of PE RVUs.
In some cases, we do not accept the price listed on the invoice
that accompanies the recommendation because we identify publicly
available alternative prices or information that suggests a different
price is more accurate. In these cases, we include this in the
discussion of these codes. In other cases, we cannot adequately price a
newly recommended item due to inadequate information. Sometimes, no
supporting information regarding the price of the item has been
included in the recommendation. In other cases, the supporting
information does not demonstrate that the item has been purchased at
the listed price (for example, vendor price quotes instead of paid
invoices). In cases where the information provided on the item allows
us to identify clinically appropriate proxy items, we might use
existing items as proxies for the newly recommended items. In other
cases, we have included the item in the direct PE input database
without any associated price. Although including the item without an
associated price means that the item does not contribute to the
calculation of the proposed PE RVU for particular services, it
facilitates our ability to incorporate a price once we obtain
information and are able to do so.
(7) Service Period Clinical Labor Time in the Facility Setting
Several of the PE worksheets included in the RUC recommendations
contained clinical labor minutes assigned to the service period in the
facility setting. Our proposed inputs do not include these minutes
because the cost of clinical labor during the service period for a
procedure in the facility setting is not considered a resource cost to
the practitioner since Medicare makes separate payment to the facility
for these costs.
(8) Duplicative Inputs
Several of the PE worksheets included in the RUC recommendations
contained time for the equipment item ``xenon light source'' (EQ167).
Because there appear to be two special light sources already present
(the fiberoptic headlight and the endoscope itself) in the services for
which this equipment item was recommended, we are not proposing to
include the time for this equipment item from these services, and are
seeking comment on whether there is a rationale for including this
additional light source as a direct PE input for these procedures.
5. Methodology for Establishing Malpractice RVUs
As discussed in section II.B. of this proposed rule, our
malpractice methodology uses a crosswalk to establish risk factors for
new services until utilization data becomes available. Table 15 lists
the CY 2016 HCPCS codes and their respective source codes used to set
the proposed CY 2016 MP RVUs. The MP RVUs for these services are
reflected in Addendum B on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

Table 9--Invoices Received for New Direct PE Inputs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated non-facility
Number of allowed services for
CPT/HCPCS Codes Item name CMS Code Average price invoices HCPCS codes using this
item
--------------------------------------------------------------------------------------------------------------------------------------------------------
31626................................... Gold Fiducial Marker....... SB053 135............................ 1 6

[[Page 41720]]

3160A, 3160B, 3160C..................... endoscope, ultrasound ES045 0.............................. 0 212
radial probe.
3725A................................... IVUS catheter.............. SD304 1025........................... 3 795
3725A................................... IVUS Catheter Sterile Cover SD305 120............................ 3 795
3725A, 3725B............................ IVUS system................ ES047 134,025........................ 3 2,948
44385, 44386, 45330, 45331, 45332, Video Sigmoidoscope........ ES043 215,00......................... 1 18,058
45333, 45334, 45335, 45338, 45340,
45346.
44401, 45346, 45388..................... catheter, RF ablation, SC103 1,780.......................... 1 3,543
endoscopic.
44401, 45346............................ radiofrequency generator, EQ369 108,291.67..................... 1 174
endoscopy.
45350, 45398............................ hemorrhoidal banding system SA115 223.50......................... 4 3
5039D, 5039M............................ Nephroureteral Catheter.... SD306 117.90......................... 1 70
657XG................................... suture, nylon, 10-0........ SC104 12.17.......................... 2
657XG................................... intrastromal corneal ring.. SA120 1,145.......................... 7
657XG................................... patient/laser interface SD307 172.50......................... 1
(single--use, disposable).
657XG................................... femtosecond laser.......... ES048 293,000........................ 2
657XG................................... incision programming ES049 10,012.50...................... 1
software.
692XX................................... earwash bottle disposable SD308 1.72........................... 1
tips.
77385, 77386, 77402, 77407, 77412....... Power Conditioner.......... ER102 26,400......................... 2 2,198,441
7778A, 7778B, 7778C, 7778D, 7778E....... brachytherapy treatment ES052 175,000........................ 1 24,936
vault.
88104, 88106, 88108..................... fixative spray for cytospin SL503 1.53........................... 1 62,552
88108................................... Shannon cyto funnel, SD298 2.27........................... 1 48,740
cytospin.
88108................................... slide, microscope coated SL504 0.39........................... 1 48,740
cytospin (single circle).
88182................................... Protease................... SL506 0.43........................... 1 568
88346, 8835X............................ Immunofluorescent mounting SD309 3.50........................... 1 114,211
media.
88346, 8835X............................ Zeus medium................ SL518 0.85........................... 2 114,211
88346, 8835X............................ Hydrophobic PAP Pen........ SK120 1.76........................... 1 114,211
(100 uses).....................
88360, 88361............................ Antibody Estrogen Receptor SL493 13.89.......................... 3 116,718
monoclonal.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 10--Invoices Received for Existing Direct PE Inputs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Estimated non-facility
Current Updated Percent Number of allowed services for
CPT/HCPCS Codes Item name CMS Code price price change invoices HCPCS codes using this
item
--------------------------------------------------------------------------------------------------------------------------------------------------------
31300, 31320, 31360, 31365, 31367, 31368, endosheath.................. SD070 9.50 17.25 82 1 65,318
31370, 31375, 31380, 31382, 31390,
31395, 31628, 31632, 31750, 31755,
31800, 41120, 41130, 41135, 41140,
41145, 41150, 41153, 41155, 41500,
41510, 41512, 41530, 42120, 42842,
42844, 42845, 42870, 42890, 42892,
42894, 42950, 42953, 42955, 43215,
43247, 58555, 58558, 58562, 58563,
60605, 92511, 92612.
41530, 43228, 43229, 43270, 64633, 64634, radiofrequency generator EQ214 32,900 10,000 -70 1 265,270
64635, 64636. (NEURO).
88341, 88342, 88343, 88344, 88360, 88361. Benchmark ULTRA automated EP112 134,000 150,000 12 1 3,279,993
slide preparation system.
8835X.................................... antibody IgA FITC........... SL012 71.40 41.18 -42 1 93,520
95018.................................... benzylpenicilloyl polylysine SH103 72.45 83.00 15 1 60,683
(eg, PrePen) 0.25ml uou.

[[Page 41721]]

95923.................................... kit, electrode, SA014 11.99 4.01 -67 3 96,189
iontophoresis.
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. CY 2016 Valuation of Specific Codes

Table 11--CY 2016 Proposed Work RVUs for New, Revised and Potentially Misvalued Codes
----------------------------------------------------------------------------------------------------------------
CMS time
HCPCS Descriptor Current work RVU RUC work RVU CMS work RVU refinement
----------------------------------------------------------------------------------------------------------------
11750......... Removal of nail......... 2.5................. 1.99 1.58 No.
20240......... Biopsy of bone, open 3.28................ 3.73 2.61 No.
procedure.
27280......... Arthrodesis, open, 14.64............... 20 20 No.
sacroiliac joint
including obtaining
bone graft.
3160A......... Bronchoscopy, rigid or NEW................. 5 4.71 No.
flexible, including
fluoroscopic guidance,
when performed; with
endobronchial
ultrasound (EBUS)
guided transtracheal
and/or transbronchial
sampling (eg,
aspiration[s]/
biopsy[ies]), one or
two mediastinal and/or
hilar lymph node stat.
3160B......... Bronchoscopy, rigid or NEW................. 5.5 5.21 No.
flexible, including
fluoroscopic guidance,
when performed; with
endobronchial
ultrasound (EBUS)
guided transtracheal
and/or transbronchial
sampling (eg,
aspiration[s]/
biopsy[ies]), 3 or more
mediastinal and/or
hilar lymph node stati.
3160C......... Bronchoscopy, rigid or NEW................. 1.7 1.4 No.
flexible, including
fluoroscopic guidance,
when performed; with
transendoscopic
endobronchial
ultrasound (EBUS)
during bronchoscopic
diagnostic or
therapeutic
intervention(s) for
peripheral lesion(s)
(List separately in
addition to.
31622......... Diagnostic examination 2.78................ 2.78 2.78 No.
of lung airways using
an endoscope.
31625......... Biopsy of lung airways 3.36................ 3.36 3.36 No.
using an endoscope.
31626......... Insertion of radiation 4.16................ 4.16 4.16 No.
therapy markers into
lung airways using an
endoscope.
31628......... Biopsy of one lobe of 3.8................. 3.8 3.8 No.
lung using an endoscope.
31629......... Needle biopsy of 4.09................ 4 4 No.
windpipe cartilage,
airway, and/or lung
using an endoscope.
31632......... Biopsy of lung using an 1.03................ 1.03 1.03 No.
endoscope.
31633......... Needle biopsy of lung 1.32................ 1.32 1.32 No.
using an endoscope.
3347A......... Transcatheter pulmonary NEW................. 25 25 No.
valve implantation,
percutaneous approach,
including pre-stenting
of the valve delivery
site, when performed.
37215......... Transcatheter placement 19.68............... 18 18 No.
of intravascular
stent(s), cervical
carotid artery,
percutaneous; with
distal embolic
protection.
3725A......... Intravascular ultrasound NEW................. 1.8 1.8 No.
(noncoronary vessel)
during diagnostic
evaluation and/or
therapeutic
intervention, including
radiological
supervision and
interpretation; initial
non-coronary vessel
(List separately in
addition to code for
primary procedure).
3725B......... Intravascular ultrasound NEW................. 1.44 1.44 No.
(noncoronary vessel)
during diagnostic
evaluation and/or
therapeutic
intervention, including
radiological
supervision and
interpretation; each
additional noncoronary
vessel (List separately
in addition to code for
primary procedure.
38570......... Removal of abdominal 9.34................ 9.34 8.49 No.
cavity lymph nodes
using an endoscope.
38571......... Removal of total lymph 14.76............... 12 12 No.
nodes of both sides of
pelvis using an
endoscope.
38572......... Removal of total lymph 16.94............... 15.6 15.6 No.
nodes of both sides of
pelvis and abdominal
lymph node biopsy using
an endoscope.
3940A......... Mediastinoscopy; NEW................. 5.44 5.44 No.
includes biopsy(ies) of
mediastinal mass (eg,
lymphoma), when
performed.
3940B......... Mediastinoscopy; with NEW................. 7.5 7.25 No.
lymph node biopsy(ies)
(eg, lung cancer
staging).
43775......... Stomach reduction C................... 21.4 20.38 No.
procedure with partial
removal of stomach
using an endoscope.
44380......... Ileoscopy, through 1.05................ 0.97 0.9 No.
stoma; diagnostic,
including collection of
specimen(s) by brushing
or washing, when
performed.
44381......... Ileoscopy, through N/A................. 1.48 1.48 Yes
stoma; with
transendoscopic balloon
dilation.
44382......... Ileoscopy, through 1.27................ 1.27 1.2 No.
stoma; with biopsy,
single or multiple.
44384......... Ileoscopy, through N/A................. 3.11 2.88 No.
stoma; with placement
of endoscopic stent
(includes pre- and post-
dilation and guide wire
passage, when
performed).

[[Page 41722]]

44385......... Endoscopic evaluation of 1.82................ 1.3 1.23 No.
small intestinal pouch
(eg, Kock pouch, ileal
reservoir [S or J]);
diagnostic, including
collection of
specimen(s) by brushing
or washing, when
performed.
44386......... Endoscopic evaluation of 2.12................ 1.6 1.53 No.
small intestinal pouch
(eg, Kock pouch, ileal
reservoir [S or J]);
with biopsy, single or
multiple.
44388......... Colonoscopy through 2.82................ 2.82 2.75 No.
stoma; diagnostic,
including collection of
specimen(s) by brushing
or washing, when
performed (separate
procedure).
44389......... Colonoscopy through 3.13................ 3.12 3.05 No.
stoma; with biopsy,
single or multiple.
44390......... Colonoscopy through 3.82................ 3.82 3.77 No.
stoma; with removal of
foreign body.
44391......... Colonoscopy through 4.31................ 4.22 4.22 No.
stoma; with control of
bleeding, any method.
44392......... Colonoscopy through 3.81................ 3.63 3.63 No.
stoma; with removal of
tumor(s), polyp(s), or
other lesion(s) by hot
biopsy forceps or
bipolar cautery.
44394......... Colonoscopy through 4.42................ 4.13 4.13 No.
stoma; with removal of
tumor(s), polyp(s), or
other lesion(s) by
snare technique.
44401......... Colonoscopy through N/A................. 4.44 4.44 No.
stoma; with ablation of
tumor(s), polyp(s), or
other lesion (includes
pre-and post-dilation
and guide wire passage,
when performed).
44402......... Colonoscopy through N/A................. 4.96 4.73 No.
stoma; with endoscopic
stent placement
(including pre- and
post-dilation and
guidewire passage, when
performed).
44403......... Colonoscopy through N/A................. 5.81 5.53 No.
stoma; with endoscopic
mucosal resection.
44404......... Colonoscopy through N/A................. 3.13 3.05 No.
stoma; with directed
submucosal
injection(s), any
substance.
44405......... Colonoscopy through N/A................. 3.33 3.33 No.
stoma; with
transendoscopic balloon
dilation.
44406......... Colonoscopy through N/A................. 4.41 4.13 No.
stoma; with endoscopic
ultrasound examination,
limited to the sigmoid,
descending, transverse,
or ascending colon and
cecum and adjacent
structures.
44407......... Colonoscopy through N/A................. 5.06 5.06 No.
stoma; with
transendoscopic
ultrasound guided
intramural or
transmural fine needle
aspiration/biopsy(s),
includes endoscopic
ultrasound examination
limited to the sigmoid,
descending, transverse,
or ascending colon and
cecum and adjace.
44408......... Colonoscopy through N/A................. 4.24 4.24 No.
stoma; with
decompression (for
pathologic distention)
(eg, volvulus,
megacolon), including
placement of
decompression tube,
when performed.
45330......... Sigmoidoscopy, flexible; 0.96................ 0.84 0.77 No.
diagnostic, including
collection of
specimen(s) by brushing
or washing when
performed.
45331......... Sigmoidoscopy, flexible; 1.15................ 1.14 1.07 No.
with biopsy, single or
multiple.
45332......... Sigmoidoscopy, flexible; 1.79................ 1.85 1.79 No.
with removal of foreign
body.
45333......... Sigmoidoscopy, flexible; 1.79................ 1.65 1.65 No.
with removal of
tumor(s), polyp(s), or
other lesion(s) by hot
biopsy forceps.
45334......... Sigmoidoscopy, flexible; 2.73................ 2.1 2.1 No.
with control of
bleeding, any method.
45335......... Sigmoidoscopy, flexible; 1.46................ 1.15 1.07 No.
with directed
submucosal
injection(s), any
substance.
45337......... Sigmoidoscopy, flexible; 2.36................ 2.2 2.2 No.
with decompression (for
pathologic distention)
(eg, volvulus,
megacolon), including
placement of
decompression tube,
when performed.
45338......... Sigmoidoscopy, flexible; 2.34................ 2.15 2.15 No.
with removal of
tumor(s), polyp(s), or
other lesion(s) by
snare technique.
45340......... Sigmoidoscopy, flexible; 1.89................ 1.35 1.35 No.
with transendoscopic
balloon dilation.
45341......... Sigmoidoscopy, flexible; 2.6................. 2.43 2.15 No.
with endoscopic
ultrasound examination.
45342......... Sigmoidoscopy, flexible; 4.05................ 3.08 3.08 No.
with transendoscopic
ultrasound guided
intramural or
transmural fine needle
aspiration/biopsy(s).
45346......... Sigmoidoscopy, flexible; N/A................. 2.97 2.84 No.
with ablation of
tumor(s), polyp(s), or
other lesion(s)
(includes pre- and post-
dilation and guide wire
passage, when
performed).
45347......... Sigmoidoscopy, flexible; N/A................. 2.98 2.75 No.
with placement of
endoscopic stent
(includes pre- and post-
dilation and guide wire
passage, when
performed).
45349......... Sigmoidoscopy, flexible; N/A................. 3.83 3.55 No.
with endoscopic mucosal
resection.
45350......... Sigmoidoscopy, N/A................. 1.78 1.78 No.
flexible;with banding
(eg, hemorrhoids).
45378......... Colonoscopy, flexible; 3.69................ 3.36 3.29 No.
diagnostic, including
collection of
specimen(s) by brushing
or washing, when
performed, (separate
procedure).
45379......... Colonoscopy, flexible; 4.68................ 4.37 4.31 No.
with removal of foreign
body.
45380......... Colonoscopy, flexible, 4.43................ 3.66 3.59 No.
proximal to splenic
flexure; with biopsy,
single or multiple.
45381......... Colonoscopy, flexible; 4.19................ 3.67 3.59 No.
with directed
submucosal
injection(s), any
substance.
45382......... Colonoscopy, flexible; 5.68................ 4.76 4.76 No.
with control of
bleeding, any method.

[[Page 41723]]

45384......... Colonoscopy, flexible; 4.69................ 4.17 4.17 No.
with removal of
tumor(s), polyp(s), or
other lesion(s) by hot
biopsy forceps or
bipolar cautery.
45385......... Colonoscopy, flexible; 5.3................. 4.67 4.67 No.
with removal of
tumor(s), polyp(s), or
other lesion(s) by
snare technique.
45386......... Colonoscopy, flexible; 4.57................ 3.87 3.87 No.
with transendoscopic
balloon dilation.
45388......... Colonoscopy, flexible; N/A................. 4.98 4.98 No.
with ablation of
tumor(s), polyp(s), or
other lesion(s)
(includes pre- and post-
dilation and guide wire
passage, when
performed).
45389......... Colonoscopy, flexible; N/A................. 5.5 5.27 No.
with endoscopic stent
placement (includes pre-
and post-dilation and
guide wire passage,
when performed).
45390......... Colonoscopy, flexible; N/A................. 6.35 6.07 No.
with endoscopic mucosal
resection.
45391......... Colonoscopy, flexible; 5.09................ 4.95 4.67 No.
with endoscopic
ultrasound examination
limited to the rectum,
sigmoid, descending,
transverse, or
ascending colon and
cecum, and adjacent
structures.
45392......... Colonoscopy, flexible; 6.54................ 5.6 5.6 No.
with transendoscopic
ultrasound guided
intramural or
transmural fine needle
aspiration/biopsy(s),
includes endoscopic
ultrasound examination
limited to the rectum,
sigmoid, descending,
transverse, or
ascending colon and
cecum, and a.
45393......... Colonoscopy, flexible; N/A................. 4.78 4.78 No.
with decompression (for
pathologic distention)
(eg, volvulus,
megacolon), including
placement of
decompression tube,
when performed.
45398......... Colonoscopy, flexible; N/A................. 4.3 4.3 No.
with banding, (eg,
hemorrhoids).
46500......... Injection of hemorrhoids 1.69................ 1.69 1.42 No.
46601......... Anoscopy; diagnostic, N/A................. 1.6 1.6 No.
with high-resolution
magnification.
46607......... Anoscopy; with high- N/A................. 2.2 2.2 No.
resolution
magnification (hra),
with biopsy, single or
multiple.
47135......... Transplantation of donor 83.64............... 91.78 90 No.
liver to anatomic
position.
50390......... Aspiration and/or 1.96................ 1.96 1.96 No.
injection kidney cyst,
accessed through the
skin.
5039A......... Injection procedure for NEW................. 3.15 3.15 No.
antegrade nephrostogram
and/or ureterogram,
complete diagnostic
procedure including
imaging guidance (eg,
ultrasound and
fluoroscopy) and all
associated radiological
supervision and
interpretation; new
access.
5039B......... Injection procedure for NEW................. 1.42 1.1 No.
antegrade nephrostogram
and/or ureterogram,
complete diagnostic
procedure including
imaging guidance (eg,
ultrasound and
fluoroscopy) and all
associated radiological
supervision and
interpretation;
existing access.
5039C......... Placement of nephrostomy NEW................. 4.7 4.25 No.
catheter, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
5039D......... Placement of NEW................. 5.75 5.3 No.
nephroureteral
catheter, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation, new
access.
5039E......... Exchange nephrostomy NEW................. 2 1.82 No.
catheter, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
5039M......... Convert nephrostomy NEW................. 4.2 4 No.
catheter to
nephroureteral
catheter, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation.
5069G......... Placement of ureteral NEW................. 4.6 4.21 No.
stent, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation; pre-
existing nephrostomy.
5069H......... Placement of ureteral NEW................. 6 5.5 No.
stent, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation; new
access, without
separate.
5069I......... Placement of ureteral NEW................. 7.55 7.05 No.
stent, percutaneous,
including diagnostic
nephrostogram and/or
ureterogram when
performed, imaging
guidance (eg,
ultrasound and/or
fluoroscopy) and all
associated radiological
supervision and
interpretation; new
access, with separate.
5443A......... Repair of traumatic NEW................. 11.5 11.5 No.
corporeal tear(s).
5443B......... Replantation, penis, NEW................. 24.5 22.1 No.
complete amputation
including urethral
repair.

[[Page 41724]]

63045......... Laminectomy, facetectomy 17.95............... 17.95 17.95 No.
and foraminotomy;
cervical.
63046......... Laminectomy, facetectomy 17.25............... 17.25 17.25 No.
and foraminotomy;
thoracic.
657XG......... Implantation of NEW................. 5.93 5.39 No.
intrastromal corneal
ring segments.
68801......... Dilation of tear- 1................... 1 0.82 No.
drainage opening.
68810......... Insertion of probe into 2.15................ 1.54 1.54 No.
the tear duct.
68811......... Insertion of probe into 2.45................ 2.03 1.74 No.
the tear duct under
anesthesia.
68815......... Probing of nasal-tear 3.3................. 3 2.7 No.
duct with insertion of
tube or stent.
68816......... Probing of nasal-tear 3.06................ 2.35 2.1 No.
duct with balloon
catheter dilation.
71100......... Radiologic examination, 0.22................ 0.22 0.22 No.
ribs, unilateral; 2
views.
72070......... Radiologic examination, 0.22................ 0.22 0.22 No.
spine; thoracic, 2
views.
7208A......... Entire spine x ray, one NEW................. 0.3 0.26 No.
view.
7208B......... Entire spine x-ray; 2 or NEW................. 0.35 0.31 No.
3 views.
7208C......... Entire spine x-ray; 4 or NEW................. 0.39 0.35 No.
5 views.
7208D......... Entire spine x-ray; min NEW................. 0.45 0.41 No.
6 views.
73060......... Radiologic examination; 0.17................ 0.16 0.16 No.
humerus, minimum of 2
views.
73560......... Radiologic examination, 0.17................ 0.16 0.16 No.
knee; 1 or 2 views.
73562......... Radiologic examination, 0.18................ 0.18 0.18 No.
knee; 3 views.
73564......... Radiologic examination, 0.22................ 0.22 0.22 No.
knee; complete, 4 or
more views.
73565......... Radiologic examination, 0.17................ 0.16 0.16 No.
knee; both knees,
standing,
anteroposterior.
73590......... Radiologic examination; 0.17................ 0.16 0.16 No.
tibia and fibula, 2
views.
73600......... Radiologic examination, 0.16................ 0.16 0.16 No.
ankle; 2 views.
76999......... Ultrasound procedure.... C................... C C N/A
77387......... Guidance for N/A................. 0.58 0.58 No.
localization of target
volume for delivery of
radiation treatment
delivery, includes
intrafraction tracking
when performed.
7778B......... Remote afterloading high NEW................. 1.4 1.4 No.
dose rate radionuclide
skin surface
brachytherapy, includes
basic dosimetry, when
performed; lesion
diameter over 2.0 cm
and 2 or more channels,
or multiple lesions.
7778C......... Remote afterloading high NEW................. 1.95 1.95 No.
dose rate radionuclide
interstitial or
intracavitary
brachytherapy, includes
basic dosimetry, when
performed; 1 channel.
7778D......... Remote afterloading high NEW................. 3.8 3.8 No.
dose rate radionuclide
interstitial or
intracavitary
brachytherapy, includes
basic dosimetry, when
performed; 2-12
channels.
7778E......... Remote afterloading high NEW................. 5.4 5.4 No.
dose rate radionuclide
interstitial or
intracavitary
brachytherapy, includes
basic dosimetry, when
performed; over 12
channels.
88346......... Antibody evaluation..... 0.86................ 0.74 0.56 No.
8835X......... Immunofluorescence, per NEW................. 0.7 0.53 No.
specimen; each
additional single
antibody stain
procedure (List
separately in addition
to code for primary
procedure).
88367......... Morphometric analysis, 0.73................ 0.86 0.73 No.
in situ hybridization
(quantitative or semi-
quantitative), using
computer-assisted
technology, per
specimen: initial
single probe stain
procedure.
88368......... Morphometric analysis, 0.88................ 0.88 0.88 No.
in situ hybridization
(quantitative or semi-
quantitative) manual,
per specimen; initial
single probe stain
procedure.
91299......... Procedure for C................... C C N/A
gastrointestinal
diagnosis.
9254A......... Caloric vestibular test NEW................. 0.8 0.6 No.
with recording,
bilateral; bithermal
(ie, one warm and one
cool irrigation in each
ear for a total of four
irrigations).
9254B......... Caloric vestibular test NEW................. 0.55 0.3 No.
with recording,
bilateral; monothermal
(ie, one irrigation in
each ear for a total of
two irrigations).
99174......... Instrument-based ocular N................... 0 N No.
screening (eg,
photoscreening,
automated-refraction),
bilateral.
9917X......... Instrument-based ocular NEW................. 0 N No.
screening (eg,
photoscreening,
automated-refraction),
bilateral; with on-site
analysis.
G0104......... Colorectal cancer 0.96................ 0.84 0.77 No.
screening; flexible
sigmoidoscopy.
G0105......... Colorectal cancer 3.36................ 3.36 3.29 No.
screening; colonoscopy
on individual at high
risk.
G0121......... Colorectal cancer 3.36................ 3.36 3.29 No.
screening; colonoscopy
on individual not
meeting criteria for
high risk.
----------------------------------------------------------------------------------------------------------------

[[Page 41725]]

Table 12--CY 2016 Proposed Codes With Direct PE Input Recommendations
Accepted Without Refinement
------------------------------------------------------------------------
HCPCS Descriptor
------------------------------------------------------------------------
20245........................... Bone biopsy excisional.
20697........................... Comp ext fixate strut change.
27280........................... Fusion of sacroiliac joint.
3160A........................... Bronch ebus 141 gmt. 141 ng 1/2 node.
3160B........................... Bronch ebus 141 gmt. 141 ng 3/> node.
3160C........................... Bronch ebus ivntj perph les.
31622........................... Dx bronchoscope/wash.
31625........................... Bronchoscopy w/biopsy(s).
31626........................... Bronchoscopy w/markers.
31628........................... Bronchoscopy/lung bx each.
31629........................... Bronchoscopy/needle bx each.
31632........................... Bronchoscopy/lung bx addl.
31633........................... Bronchoscopy/needle bx addl.
3347A........................... Implant tcat pulm vlv perq.
37215........................... Transcath stent cca w/eps.
3725A........................... Intrvasc us noncoronary 1st.
3725B........................... Intrvasc us noncoronary addl.
38570........................... Laparoscopy lymph node biop.
38571........................... Laparoscopy lymphadenectomy.
3940A........................... Mediastinoscpy w/medstnl bx.
3940B........................... Mediastinoscpy w/lmph nod bx.
44384........................... Small bowel endoscopy.
44402........................... Colonoscopy w/stent plcmt.
44403........................... Colonoscopy w/resection.
44406........................... Colonoscopy w/ultrasound.
44407........................... Colonoscopy w/ndl aspir/bx.
44408........................... Colonoscopy w/decompression.
45337........................... Sigmoidoscopy & decompress.
45341........................... Sigmoidoscopy w/ultrasound.
45342........................... Sigmoidoscopy w/us guide bx.
45347........................... Sigmoidoscopy w/plcmt stent.
45349........................... Sigmoidoscopy w/resection.
45389........................... Colonoscopy w/stent plcmt.
45390........................... Colonoscopy w/resection.
45391........................... Colonoscopy w/endoscope us.
45392........................... Colonoscopy w/endoscopic fnb.
45393........................... Colonoscopy w/decompression.
47135........................... Transplantation of liver.
5443B........................... Replantation of penis.
63045........................... Remove spine lamina 1 crvl.
63046........................... Remove spine lamina 1 thrc.
68811........................... Probe nasolacrimal duct.
68815........................... Probe nasolacrimal duct.
692XX........................... Remove impacted ear wax uni.
76948........................... Echo guide ova aspiration.
7778A........................... Hdr rdncl skn surf brachytx.
7778B........................... Hdr rdncl skn surf brachytx.
7778C........................... Hdr rdncl ntrstl/icav brchtx.
7778D........................... Hdr rdncl ntrstl/icav brchtx.
7778E........................... Hdr rdncl ntrstl/icav brchtx.
88346........................... Immunofluorescent study.
8835X........................... Immunofluor antb addl stain.
9254A........................... Caloric vstblr test w/rec.
9254B........................... Caloric vstblr test w/rec.
9935A........................... Prolong clincl staff svc.
9935B........................... Prolong clincl staff svc add.
------------------------------------------------------------------------

Table 13--CY 2016 Proposed Codes With Direct PE Input Recommendations Accepted With Refinements
--------------------------------------------------------------------------------------------------------------------------------------------------------
RUC
Labor activity recommendation CMS Direct
HCPCS code HCPCS code Input code Input code NF/F (where or current refinement Comment costs
description description applicable) value (min or (min or change
qty) qty) ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
10021...... Fna w/o image..... EF015..... mayo stand....... NF ................. 24 28 Refined equipment ........
time to conform to
established
policies for non-
highly technical
equipment.
EF023..... table, exam...... NF ................. 29 28 Refined equipment ........
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Greet patient, 1 0 Typically billed (0.37)
provide gowning, with an E/M or
ensure other evaluation
appropriate service.
medical records
are available.
11750...... Removal of nail EF015..... mayo stand....... NF ................. 27 45 Refined equipment 0.02
bed. time to conform to
established
policies for non-
highly technical
equipment.
EF031..... table, power..... NF ................. 54 62 Refined equipment 0.13
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 34 45 Refined equipment 0.03
basic ($500- time to conform to
$1,499). established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 54 62 Refined equipment 0.03
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Provide pre- 0 2 Refined time to 0.74
service standard time for
education/obtain this clinical labor
consent. task.
SG067..... penrose drain NF ................. 1 0 Removed supply not (0.50)
(0.25in x 4in). typically used in
this service.
11760...... Repair of nail bed EF014..... light, surgical.. NF ................. 45 43 Refined equipment (0.02)
time to conform to
established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 45 43 Refined equipment ........
time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41726]]

EF031..... table, power..... NF ................. 72 70 Refined equipment (0.03)
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 52 47 Refined equipment (0.01)
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ168..... light, exam...... NF ................. 72 70 Refined equipment (0.01)
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 Emergency procedure, (1.85)
service input would not
diagnostic & typically be used.
referral forms.
L037D..... RN/LPN/MTA....... NF Coordinate pre- 3 0 Emergency procedure, (1.11)
surgery services. input would not
typically be used.
L037D..... RN/LPN/MTA....... NF Provide pre- 5 0 Duplication with (1.85)
service other clinical
education/obtain labor task.
consent.
12005...... Rpr s/n/a/gen/ EF023..... table, exam...... NF ................. 40 44 Refined equipment 0.01
trk12.6-20.0cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 40 44 Refined equipment 0.01
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 40 44 Refined equipment 0.02
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 7 3 Refined time to (1.48)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12006...... Rpr s/n/a/gen/ EF031..... table, power..... NF ................. 45 49 Refined equipment 0.07
trk20.1-30.0cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 45 49 Refined equipment 0.01
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 45 49 Refined equipment 0.02
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 7 3 Refined time to (1.48)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12007...... Rpr s/n/ax/gen/ EF031..... table, power..... NF ................. 50 54 Refined equipment 0.07
trnk >30.0 cm. time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41727]]

EQ110..... electrocautery- NF ................. 50 54 Refined equipment 0.01
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 50 54 Refined equipment 0.02
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 7 3 Refined time to (1.48)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12013...... Rpr f/e/e/n/l/m EF031..... table, power..... NF ................. 27 33 Refined equipment 0.10
2.6-5.0 cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 27 33 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 27 33 Refined equipment 0.03
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 5 3 Refined time to (0.74)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12014...... Rpr f/e/e/n/l/m EF031..... table, power..... NF ................. 32 38 Refined equipment 0.10
5.1-7.5 cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 32 38 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 32 38 Refined equipment 0.03
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 5 3 Refined time to (0.74)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12015...... Rpr f/e/e/n/l/m EF031..... table, power..... NF ................. 37 43 Refined equipment 0.10
7.6-12.5 cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 37 43 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 37 43 Refined equipment 0.03
time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41728]]

L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 5 3 Refined time to (0.74)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12016...... Rpr fe/e/en/l/m EF031..... table, power..... NF ................. 42 48 Refined equipment 0.10
12.6-20.0 cm. time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 42 48 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ168..... light, exam...... NF ................. 42 48 Refined equipment 0.03
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Check dressings & 5 3 Refined time to (0.74)
wound/home care standard time for
instructions/ this clinical labor
coordinate task.
office visits/
prescriptions.
12041...... Intmd rpr n-hf/ ED004..... camera, digital F ................. 0 27 Input added to 0.10
genit 2.5cm/<. (6 mexapixel). maintain
consistency with
all other codes
within family.
ED004..... camera, digital NF ................. 60 27 Refined equipment (0.12)
(6 mexapixel). time to conform to
office visit
duration.
EF014..... light, surgical.. NF ................. 33 42 Refined equipment 0.09
time to conform to
established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 33 42 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EF023..... table, exam...... NF ................. 60 27 Refined equipment (0.10)
time to conform to
office visit
duration.
EF031..... table, power..... NF ................. 33 42 Refined equipment 0.15
time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 33 42 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 0 46 Equipment item 0.11
basic ($500- replaces another
$1,499). item (EQ138); see
preamble.
EQ138..... instrument pack, NF ................. 40 0 Equipment item (0.28)
medium ($1,500 replaced by another
and up). item (EQ137); see
preamble.
EQ168..... light, exam...... NF ................. 60 27 Refined equipment (0.14)
time to conform to
office visit
duration.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... F Provide pre- 2 0 Intraservice direct (0.74)
service PE inputs are not
education/obtain included in the
consent. facility setting;
See preamble text.

[[Page 41729]]

L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 Emergency procedure, (1.85)
service input would not
diagnostic & typically be used.
referral forms.
L037D..... RN/LPN/MTA....... NF Coordinate pre- 3 0 Emergency procedure, (1.11)
surgery services. input would not
typically be used.
L037D..... RN/LPN/MTA....... NF Follow-up phone 3 0 Emergency procedure, (1.11)
calls and input would not
prescriptions. typically be used.
12054...... Intmd rpr face/mm ED004..... camera, digital NF ................. 90 27 Refined equipment (0.24)
7.6-12.5cm. (6 mexapixel). time to conform to
office visit
duration.
EF014..... light, surgical.. NF ................. 63 71 Refined equipment 0.08
time to conform to
established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 63 71 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EF023..... table, exam...... NF ................. 90 27 Refined equipment (0.19)
time to conform to
office visit
duration.
EF031..... table, power..... NF ................. 63 71 Refined equipment 0.13
time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 63 71 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ138..... instrument pack, NF ................. 75 80 Refined equipment 0.03
medium ($1,500 time to conform to
and up). established
policies for
instrument packs.
EQ168..... light, exam...... NF ................. 90 27 Refined equipment (0.27)
time to conform to
office visit
duration.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... F Provide pre- 2 0 Intraservice direct (0.74)
service PE inputs are not
education/obtain included in the
consent. facility setting;
See preamble text.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 Emergency procedure, (1.85)
service input would not
diagnostic & typically be used.
referral forms.
L037D..... RN/LPN/MTA....... NF Coordinate pre- 3 0 Emergency procedure, (1.11)
surgery services. input would not
typically be used.
L037D..... RN/LPN/MTA....... NF Follow-up phone 3 0 Emergency procedure, (1.11)
calls and input would not
prescriptions. typically be used.
12055...... Intmd rpr face/mm ED004..... camera, digital NF ................. 136 63 Refined equipment (0.27)
12.6-20 cm. (6 mexapixel). time to conform to
office visit
duration.
EF014..... light, surgical.. NF ................. 73 81 Refined equipment 0.08
time to conform to
established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 73 81 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EF023..... table, exam...... NF ................. 136 63 Refined equipment (0.22)
time to conform to
office visit
duration.
EF031..... table, power..... NF ................. 73 81 Refined equipment 0.13
time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41730]]

EQ110..... electrocautery- NF ................. 73 81 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ138..... instrument pack, NF ................. 85 90 Refined equipment 0.03
medium ($1,500 time to conform to
and up). established
policies for
instrument packs.
EQ168..... light, exam...... NF ................. 136 63 Refined equipment (0.32)
time to conform to
office visit
duration.
L037D..... RN/LPN/MTA....... F Provide pre- 2 0 Intraservice direct (0.74)
service PE inputs are not
education/obtain included in the
consent. facility setting;
See preamble text.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 Emergency procedure, (1.85)
service input would not
diagnostic & typically be used.
referral forms.
L037D..... RN/LPN/MTA....... NF Coordinate pre- 3 0 Emergency procedure, (1.11)
surgery services. input would not
typically be used.
L037D..... RN/LPN/MTA....... NF Follow-up phone 3 0 Emergency procedure, (1.11)
calls and input would not
prescriptions. typically be used.
SA054..... pack, post-op F ................. 2 1 No rationale was (4.91)
incision care provided for
(suture). quantity change
relative to current
value; maintaining
current value.
12057...... Intmd rpr face/mm ED004..... camera, digital NF ................. 166 63 Refined equipment (0.39)
>30.0 cm. (6 mexapixel). time to conform to
office visit
duration.
EF014..... light, surgical.. NF ................. 103 111 Refined equipment 0.08
time to conform to
established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 103 111 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EF023..... table, exam...... NF ................. 166 63 Refined equipment (0.31)
time to conform to
office visit
duration.
EF031..... table, power..... NF ................. 103 111 Refined equipment 0.13
time to conform to
established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 103 111 Refined equipment 0.02
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ138..... instrument pack, NF ................. 115 120 Refined equipment 0.03
medium ($1,500 time to conform to
and up). established
policies for
instrument packs.
EQ168..... light, exam...... NF ................. 166 63 Refined equipment (0.45)
time to conform to
office visit
duration.
L037D..... RN/LPN/MTA....... F Provide pre- 2 0 Intraservice direct (0.74)
service PE inputs are not
education/obtain included in the
consent. facility setting;
See preamble text.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 Emergency procedure, (1.85)
service input would not
diagnostic & typically be used.
referral forms.
L037D..... RN/LPN/MTA....... NF Coordinate pre- 3 0 Emergency procedure, (1.11)
surgery services. input would not
typically be used.
L037D..... RN/LPN/MTA....... NF Follow-up phone 3 0 Emergency procedure, (1.11)
calls and input would not
prescriptions. typically be used.
SA054..... pack, post-op F ................. 2 1 No rationale was (4.91)
incision care provided for
(suture). quantity change
relative to current
value; maintaining
current value.

[[Page 41731]]

SA054..... pack, post-op NF ................. 2 1 No rationale was (4.91)
incision care provided for
(suture). quantity change
relative to current
value; maintaining
current value.
20240...... Bone biopsy L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
excisional. day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
30300...... Remove nasal EF008..... chair with NF ................. 59 67 Refined equipment 0.09
foreign body. headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 22 40 Refined equipment 0.02
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 29 47 Refined equipment 0.04
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ167..... light source, F ................. 27 0 Redundant when used (0.72)
xenon. together with
EQ170; see preamble.
EQ167..... light source, NF ................. 59 0 Redundant when used (1.57)
xenon. together with
EQ170; see preamble.
EQ170..... light, fiberoptic NF ................. 59 67 Refined equipment 0.06
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 59 67 Refined equipment 0.07
pressure time to conform to
cabinet, ENT established
(SMR). policies for non-
highly technical
equipment.
ES013..... endoscope, rigid, NF ................. 71 74 Refined equipment 0.02
sinoscopy. time to conform to
established
policies for scopes.
ES031..... video system, NF ................. 59 67 Refined equipment 1.03
endoscopy time to conform to
(processor, established
digital capture, policies for non-
monitor, highly technical
printer, cart). equipment.
L037D..... RN/LPN/MTA....... F Discharge day 6 0 Aligned clinical (2.22)
management. labor discharge day
management time
with the work time
discharge day code.
SA041..... pack, basic NF ................. 1 0 Supply item replaced (11.67)
injection. by another item
(component parts);
see preamble.
SB001..... cap, surgical.... NF ................. 0 1 Supply item replaces 0.21
another item
(SA041); see
preamble.
SB012..... drape, sterile, NF ................. 0 1 Supply item replaces 1.69
for Mayo stand. another item
(SA041); see
preamble.
SB024..... gloves, sterile.. NF ................. 0 2 Supply item replaces 1.68
another item
(SA041); see
preamble.
SB027..... gown, staff, NF ................. 0 2 Supply item replaces 2.37
impervious. another item
(SA041); see
preamble.
SB033..... mask, surgical... NF ................. 0 1 Supply item replaces 0.20
another item
(SA041); see
preamble.
SB044..... underpad 2ft x NF ................. 0 1 Supply item replaces 0.23
3ft (Chux). another item
(SA041); see
preamble.
SG009..... applicator, NF ................. 0 3 Supply item replaces 0.42
sponge-tipped. another item
(SA041); see
preamble.
SG055..... gauze, sterile NF ................. 0 2 Supply item replaces 0.32
4in x 4in. another item
(SA041); see
preamble.
SM010..... cleaning brush, F ................. 2 1 Refined supply (4.99)
endoscope. quantity to what is
typical for the
procedure.

[[Page 41732]]

SM010..... cleaning brush, NF ................. 4 2 Refined supply (9.98)
endoscope. quantity to what is
typical for the
procedure.
30903...... Control of EF008..... chair with NF ................. 54 110 Refined equipment 0.60
nosebleed. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.
EQ110..... electrocautery- NF ................. 54 50 Refined equipment (0.01)
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 61 54 Refined equipment (0.02)
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 54 50 Refined equipment (0.03)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 54 110 Refined equipment 0.52
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
30905...... Control of EF008..... chair with NF ................. 72 128 Refined equipment 0.60
nosebleed. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.
EQ110..... electrocautery- NF ................. 72 68 Refined equipment (0.01)
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 79 72 Refined equipment (0.02)
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 72 68 Refined equipment (0.03)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 72 128 Refined equipment 0.52
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
30906...... Repeat control of EF008..... chair with NF ................. 84 140 Refined equipment 0.60
nosebleed. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.
EQ110..... electrocautery- NF ................. 84 80 Refined equipment (0.01)
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 91 84 Refined equipment (0.02)
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 84 80 Refined equipment (0.03)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 84 140 Refined equipment 0.52
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
31295...... Sinus endo w/ EF008..... chair with NF ................. 50 103 Refined equipment 0.57
balloon dil. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.

[[Page 41733]]

EF015..... mayo stand....... NF ................. 32 43 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 42 47 Refined equipment 0.01
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ167..... light source, NF ................. 50 0 Redundant when used (1.33)
xenon. together with
EQ170; see preamble.
EQ170..... light, fiberoptic NF ................. 50 43 Refined equipment (0.06)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 50 103 Refined equipment 0.49
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
ES013..... endoscope, rigid, NF ................. 44 47 Refined equipment 0.02
sinoscopy. time to conform to
established
policies for scopes.
ES031..... video system, NF ................. 50 43 Refined equipment (0.90)
endoscopy time to conform to
(processor, established
digital capture, policies for non-
monitor, highly technical
printer, cart). equipment.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 See preamble text... (1.85)
service
diagnostic &
referral forms.
L037D..... RN/LPN/MTA....... NF Provide pre- 7 3 Refined time to (1.48)
service standard time for
education/obtain this clinical labor
consent. task.
L037D..... RN/LPN/MTA....... NF Sedate/Apply 5 2 Refined time to (1.11)
anesthesia. standard time for
this clinical labor
task.
SJ037..... oxymetazoline NF ................. 3 1 Refined supply (3.66)
nasal spray quantity to what is
(Afrin) (15ml typical for the
uou). procedure.
31296...... Sinus endo w/ EF008..... chair with NF ................. 60 113 Refined equipment 0.57
balloon dil. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.
EF015..... mayo stand....... NF ................. 60 53 Refined equipment (0.01)
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 52 57 Refined equipment 0.01
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ167..... light source, NF ................. 60 0 Redundant when used (1.60)
xenon. together with
EQ170; see preamble.
EQ170..... light, fiberoptic NF ................. 60 53 Refined equipment (0.06)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 60 113 Refined equipment 0.49
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
ES013..... endoscope, rigid, NF ................. 54 57 Refined equipment 0.02
sinoscopy. time to conform to
established
policies for scopes.
ES031..... video system, NF ................. 60 53 Refined equipment (0.90)
endoscopy time to conform to
(processor, established
digital capture, policies for non-
monitor, highly technical
printer, cart). equipment.

[[Page 41734]]

L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 See preamble text... (1.85)
service
diagnostic &
referral forms.
L037D..... RN/LPN/MTA....... NF Provide pre- 7 3 Refined time to (1.48)
service standard time for
education/obtain this clinical labor
consent. task.
L037D..... RN/LPN/MTA....... NF Sedate/Apply 5 2 Refined time to (1.11)
anesthesia. standard time for
this clinical labor
task.
SJ037..... oxymetazoline NF ................. 3 1 Refined supply (3.66)
nasal spray quantity to what is
(Afrin) (15ml typical for the
uou). procedure.
31297...... Sinus endo w/ EF008..... chair with NF ................. 58 111 Refined equipment 0.57
balloon dil. headrest, exam, time to conform to
reclining. established
policies for
equipment with 4x
monitoring time.
EF015..... mayo stand....... NF ................. 40 51 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 47 55 Refined equipment 0.02
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ167..... light source, NF ................. 58 0 Redundant when used (1.55)
xenon. together with
EQ170; see preamble.
EQ170..... light, fiberoptic NF ................. 58 51 Refined equipment (0.06)
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 58 111 Refined equipment 0.49
pressure time to conform to
cabinet, ENT established
(SMR). policies for
equipment with 4x
monitoring time.
ES013..... endoscope, rigid, NF ................. 52 55 Refined equipment 0.02
sinoscopy. time to conform to
established
policies for scopes.
ES031..... video system, NF ................. 58 51 Refined equipment (0.90)
endoscopy time to conform to
(processor, established
digital capture, policies for non-
monitor, highly technical
printer, cart). equipment.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Complete pre- 5 0 See preamble text... (1.85)
service
diagnostic &
referral forms.
L037D..... RN/LPN/MTA....... NF Provide pre- 7 3 Refined time to (1.48)
service standard time for
education/obtain this clinical labor
consent. task.
L037D..... RN/LPN/MTA....... NF Sedate/Apply 5 2 Refined time to (1.11)
anesthesia. standard time for
this clinical labor
task.
SJ037..... oxymetazoline NF ................. 3 1 Refined supply (3.66)
nasal spray quantity to what is
(Afrin) (15ml typical for the
uou). procedure.
38572...... Laparoscopy SA051..... pack, pelvic exam F ................. 1 0 Removed supply not (1.17)
lymphadenectomy. typically used in
this service.
40804...... Removal foreign EF008..... chair with NF ................. 74 82 Refined equipment 0.09
body mouth. headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EQ110..... electrocautery- NF ................. 29 39 Refined equipment 0.03
hyfrecator, up time to conform to
to 45 watts. established
policies for non-
highly technical
equipment.

[[Page 41735]]

EQ137..... instrument pack, NF ................. 36 38 Refined equipment --
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 74 82 Refined equipment 0.06
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and F ................. 27 0 Equipment usage not (0.25)
pressure typical for a
cabinet, ENT follow-up office
(SMR). visit.
EQ234..... suction and NF ................. 61 39 Refined equipment (0.20)
pressure time to conform to
cabinet, ENT established
(SMR). policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
SD009..... canister, suction NF ................. 2 1 Refined supply (3.91)
quantity to what is
typical for the
procedure.
42809...... Remove pharynx EF008..... chair with NF ................. 58 74 Refined equipment 0.17
foreign body. headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 26 47 Refined equipment 0.02
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 60 51 Refined equipment (0.02)
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 58 74 Refined equipment 0.13
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ234..... suction and F ................. 27 0 Equipment usage not (0.25)
pressure typical for a
cabinet, ENT follow-up office
(SMR). visit.
EQ234..... suction and NF ................. 58 47 Refined equipment (0.10)
pressure time to conform to
cabinet, ENT established
(SMR). policies for non-
highly technical
equipment.
ES020..... fiberscope, NF ................. 115 128 Refined equipment 0.47
flexible, time to conform to
rhinolaryngoscop established
y. policies for scopes.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
SA048..... pack, minimum F ................. 2 1 Refined supply (1.14)
multi-specialty quantity to what is
visit. typical for the
procedure.
44380...... Small bowel EF018..... stretcher........ NF ................. 73 77 Standard time for 0.02
endoscopy br/wa. moderate sedation
equipment.
EF027..... table, NF ................. 29 77 Standard time for 0.07
instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 29 0 Equipment removed (0.47)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 52 77 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 52 77 Standard time for 0.16
moderate sedation
equipment.
44381...... Small bowel EF018..... stretcher........ NF ................. 83 87 Standard equipment 0.02
endoscopy br/wa. and time for
moderate sedation.
EF027..... table, NF ................. 39 87 Standard equipment 0.07
instrument, and time for
mobile. moderate sedation.
EQ011..... ECG, 3-channel NF ................. 62 87 Standard equipment 0.35
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).

[[Page 41736]]

EQ032..... IV infusion pump. NF ................. 62 87 Standard equipment 0.16
and time for
moderate sedation.
44382...... Small bowel EF018..... stretcher........ NF ................. 78 82 Standard time for 0.02
endoscopy. moderate sedation
equipment.
EF027..... table, NF ................. 34 82 Standard time for 0.07
instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 34 0 Equipment removed (0.56)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 57 82 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 82 Standard time for 0.16
moderate sedation
equipment.
44385...... Endoscopy of bowel EF027..... table, NF ................. 29 77 Standard time for 0.07
pouch. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 29 0 Equipment removed (0.47)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 52 77 Refined equipment 0.35
(with SpO2, time to conform to
NIBP, temp, established
resp). policies for
equipment with 4x
monitoring time.
EQ032..... IV infusion pump. NF ................. 52 77 Standard time for 0.16
moderate sedation
equipment.
44386...... Endoscopy bowel EF027..... table, NF ................. 31 79 Standard time for 0.07
pouch/biop. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 31 0 Equipment removed (0.51)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 54 79 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 54 79 Standard time for 0.16
moderate sedation
equipment.
44388...... Colonoscopy thru EF027..... table, NF ................. 57 87 Standard time for 0.04
stoma spx. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 39 0 Equipment removed (0.64)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 57 87 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 87 Standard time for 0.19
moderate sedation
equipment.
44389...... Colonoscopy with EF027..... table, NF ................. 62 92 Standard time for 0.04
biopsy. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 44 0 Equipment removed (0.72)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard time for 0.19
moderate sedation
equipment.
44390...... Colonoscopy for EF027..... table, NF ................. 67 97 Standard time for 0.04
foreign body. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 49 0 Equipment removed (0.80)
due to redundancy
when used together
with equipment item
EF018, stretcher.

[[Page 41737]]

EQ011..... ECG, 3-channel NF ................. 67 97 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 67 97 Standard time for 0.19
moderate sedation
equipment.
44391...... Colonoscopy for EF027..... table, NF ................. 72 102 Standard time for 0.04
bleeding. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 54 0 Equipment removed (0.88)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 72 102 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 72 102 Standard time for 0.19
moderate sedation
equipment.
44392...... Colonoscopy & EF027..... table, NF ................. 62 92 Standard time for 0.04
polypectomy. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 44 0 Equipment removed (0.72)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard time for 0.19
moderate sedation
equipment.
44394...... Colonoscopy w/ EF027..... table, NF ................. 62 92 Standard time for 0.04
snare. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 44 0 Equipment removed (0.72)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard time for 0.19
moderate sedation
equipment.
44401...... Colonoscopy with EF027..... table, NF ................. 62 92 Standard equipment 0.04
ablation. instrument, and time for
mobile. moderate sedation.
EF031..... table, power..... NF ................. 44 0 Refined equipment (0.72)
time to conform to
established
policies for non-
highly technical
equipment.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard equipment 0.42
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard equipment 0.19
and time for
moderate sedation.
44404...... Colonoscopy w/ EF027..... table, NF ................. 62 92 Standard equipment 0.04
injection. instrument, and time for
mobile. moderate sedation.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard equipment 0.42
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard equipment 0.19
and time for
moderate sedation.
44405...... Colonoscopy w/ EF027..... table, NF ................. 40 100 Standard equipment 0.08
dilation. instrument, and time for
mobile. moderate sedation.
EQ011..... ECG, 3-channel NF ................. 50 100 Standard equipment 0.70
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 50 100 Standard equipment 0.32
and time for
moderate sedation.
45330...... Diagnostic EF027..... table, NF ................. 12 0 No moderate sedation (0.02)
sigmoidoscopy. instrument,
mobile.

[[Page 41738]]

EQ011..... ECG, 3-channel NF ................. 18 0 No moderate sedation (0.25)
(with SpO2,
NIBP, temp,
resp).
EQ235..... suction machine NF ................. 12 22 Increased to reflect 0.02
(Gomco). Intra-Service
clinical labor
tasks.
ES031..... video system, NF ................. 12 22 Increased to reflect 1.29
endoscopy Intra-Service
(processor, clinical labor
digital capture, tasks.
monitor,
printer, cart).
ES043..... Video Sigmoid- NF ................. 42 49 Refined equipment 0.49
oscope. time to conform to
established
policies for scopes.
45331...... Sigmoidoscopy and EF027..... table, NF ................. 12 0 No moderate sedation (0.02)
biopsy. instrument,
mobile.
EQ011..... ECG, 3-channel NF ................. 33 0 No moderate sedation (0.46)
(with SpO2,
NIBP, temp,
resp).
EQ235..... suction machine NF ................. 12 27 Matches time spent 0.03
(Gomco). using endoscope
system.
ES031..... video system, NF ................. 12 27 Increased to reflect 1.93
endoscopy Intra-Service
(processor, clinical labor
digital capture, tasks.
monitor,
printer, cart).
ES043..... Video Sigmoid- NF ................. 42 54 Refined equipment 0.83
oscope. time to conform to
established
policies for scopes.
45332...... Sigmoidoscopy w/fb EF027..... table, NF ................. 34 82 Standard time for 0.07
removal. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 34 0 Equipment removed (0.56)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 57 82 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 82 Standard time for 0.16
moderate sedation
equipment.
45333...... Sigmoidoscopy & EF027..... table, NF ................. 29 77 Standard time for 0.07
polypectomy. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 29 0 Equipment removed (0.47)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 52 77 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 52 77 Standard time for 0.16
moderate sedation
equipment.
45334...... Sigmoidoscopy for EF027..... table, NF ................. 34 82 Standard time for 0.07
bleeding. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 34 0 Equipment removed (0.56)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 57 82 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 82 Standard time for 0.16
moderate sedation
equipment.
45335...... Sigmoidoscopy w/ EF027..... table, NF ................. 29 77 Standard time for 0.07
submuc inj. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 29 0 Equipment removed (0.47)
due to redundancy
when used together
with equipment item
EF018, stretcher.

[[Page 41739]]

EQ011..... ECG, 3-channel NF ................. 52 77 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 52 77 Standard time for 0.16
moderate sedation
equipment.
45338...... Sigmoidoscopy w/ EF027..... table, NF ................. 29 77 Standard time for 0.07
tumr remove. instrument, moderate sedation
mobile. equipment.
EQ011..... ECG, 3-channel NF ................. 52 77 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 52 77 Standard time for 0.16
moderate sedation
equipment.
45340...... Sig w/tndsc EF027..... table, NF ................. 34 82 Standard time for 0.07
balloon dilation. instrument, moderate sedation
mobile. equipment.
EQ011..... ECG, 3-channel NF ................. 57 82 Standard time for 0.35
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 82 Standard time for 0.16
moderate sedation
equipment.
45346...... Sigmoidoscopy w/ EF027..... table, NF ................. 34 82 Standard equipment 0.07
ablation. instrument, and time for
mobile. moderate sedation.
EQ011..... ECG, 3-channel NF ................. 57 82 Standard equipment 0.35
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 57 82 Standard equipment 0.16
and time for
moderate sedation.
45350...... Sgmdsc w/band EF027..... table, NF ................. 94 82 Standard equipment (0.02)
ligation. instrument, and time for
mobile. moderate sedation.
EQ011..... ECG, 3-channel NF ................. 94 82 Standard equipment (0.17)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 94 82 Standard equipment (0.08)
and time for
moderate sedation.
SH074..... water, sterile NF ................. 1 0 This input is not (2.09)
for irrigation contained within
(250-1000ml uou). any other code in
this family;
maintaining
consistency with
all other codes
within family.
SK087..... water, distilled. NF ................. 0 5 This input is not 0.07
contained within
any other code in
this family;
maintaining
consistency with
all other codes
within family.
45378...... Diagnostic EF027..... table, NF ................. 57 87 Standard time for 0.04
colonoscopy. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 39 0 Equipment removed (0.64)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 57 87 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 57 87 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 72 39 Matches time spent (0.07)
(Gomco). using endoscope
system.
45379...... Colonoscopy w/fb EF027..... table, NF ................. 67 97 Standard time for 0.04
removal. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 49 0 Equipment removed (0.80)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 67 97 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 67 97 Standard time for 0.19
moderate sedation
equipment.

[[Page 41740]]

EQ235..... suction machine NF ................. 92 49 Matches time spent (0.08)
(Gomco). using endoscope
system.
45380...... Colonoscopy and EF027..... table, NF ................. 60 90 Standard time for 0.04
biopsy. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 42 0 Equipment removed (0.69)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 60 90 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 60 90 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 78 42 Matches time spent (0.07)
(Gomco). using endoscope
system.
45381...... Colonoscopy EF027..... table, NF ................. 60 90 Standard time for 0.04
submucous njx. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 42 0 Equipment removed (0.69)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 60 90 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 60 90 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 78 42 Matches time spent (0.07)
(Gomco). using endoscope
system.
45382...... Colonoscopy w/ EF027..... table, NF ................. 72 102 Standard time for 0.04
control bleed. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 54 0 Equipment removed (0.88)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 72 102 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 72 102 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 102 54 Matches time spent (0.09)
(Gomco). using endoscope
system.
45384...... Colonoscopy w/ EF027..... table, NF ................. 60 90 Standard time for 0.04
lesion removal. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 42 0 Equipment removed (0.69)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 60 90 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 60 90 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 78 42 Matches time spent (0.07)
(Gomco). using endoscope
system.
45385...... Colonoscopy w/ EF027..... table, NF ................. 62 92 Standard time for 0.04
lesion removal. instrument, moderate sedation
mobile. equipment.
EF031..... table, power..... NF ................. 44 0 Equipment removed (0.72)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 62 92 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 62 92 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 82 44 Matches time spent (0.07)
(Gomco). using endoscope
system.
45386...... Colonoscopy w/ EF027..... table, NF ................. 67 97 Standard time for 0.04
balloon dilat. instrument, moderate sedation
mobile. equipment.

[[Page 41741]]

EF031..... table, power..... NF ................. 49 0 Equipment removed (0.80)
due to redundancy
when used together
with equipment item
EF018, stretcher.
EQ011..... ECG, 3-channel NF ................. 67 97 Standard time for 0.42
(with SpO2, moderate sedation
NIBP, temp, equipment.
resp).
EQ032..... IV infusion pump. NF ................. 67 97 Standard time for 0.19
moderate sedation
equipment.
EQ235..... suction machine NF ................. 92 49 Matches time spent (0.08)
(Gomco). using endoscope
system.
45388...... Colonoscopy w/ EF027..... table, NF ................. 67 97 Standard equipment 0.04
ablation. instrument, and time for
mobile. moderate sedation.
EF031..... table, power..... NF ................. 49 0 Refined equipment (0.80)
time to conform to
established
policies for non-
highly technical
equipment.
EQ011..... ECG, 3-channel NF ................. 67 97 Standard equipment 0.42
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 67 97 Standard equipment 0.19
and time for
moderate sedation.
EQ235..... suction machine NF ................. 92 49 Matches time spent (0.08)
(Gomco). using endoscope
system.
45398...... Colonoscopy w/band EF027..... table, NF ................. 52 82 Standard equipment 0.04
ligation. instrument, and time for
mobile. moderate sedation.
EF031..... table, power..... NF ................. 34 0 Refined equipment (0.56)
time to conform to
established
policies for non-
highly technical
equipment.
EQ011..... ECG, 3-channel NF ................. 52 82 Standard equipment 0.42
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 52 82 Standard equipment 0.19
and time for
moderate sedation.
EQ235..... suction machine NF ................. 62 34 Matches time spent (0.06)
(Gomco). using endoscope
system.
46500...... Injection into EF014..... light, surgical.. NF ................. 73 60 Refined equipment (0.13)
hemorrhoid(s). time to conform to
established
policies for non-
highly technical
equipment.
EF031..... table, power..... NF ................. 73 60 Refined equipment (0.21)
time to conform to
established
policies for non-
highly technical
equipment.
EQ235..... suction machine NF ................. 73 60 Refined equipment (0.03)
(Gomco). time to conform to
established
policies for non-
highly technical
equipment.
ES002..... anoscope with NF ................. 78 60 Refined equipment (0.07)
light source. time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Cleaning scope at 5 0 Included in clinical (1.85)
POV. labor task ``Clean
room, equipment,
and supplies''
included in post-
operative visit.
L037D..... RN/LPN/MTA....... F Complete pre- 3 0 Standard 0 day (1.11)
service global pre-service
diagnostic and times; exception
referral forms. not accepted as
service is rarely
furnished in the
facility.
L037D..... RN/LPN/MTA....... F Coordinate pre- 3 0 Standard 0 day (1.11)
surgery services. global pre-service
times; exception
not accepted as
service is rarely
furnished in the
facility.
L037D..... RN/LPN/MTA....... F Follow-up phone 3 0 Standard 0 day (1.11)
calls and global pre-service
prescriptions. times; exception
not accepted as
service is rarely
furnished in the
facility.

[[Page 41742]]

L037D..... RN/LPN/MTA....... F Schedule space 3 0 Standard 0 day (1.11)
and equipment in global pre-service
facility. times; exception
not accepted as
service is rarely
furnished in the
facility.
L037D..... RN/LPN/MTA....... F Setup scope at 5 0 Included in clinical (1.85)
POV. labor task
``Prepare room,
equipment,
supplies'' included
in post-operative
visit.
L037D..... RN/LPN/MTA....... NF Clean scope...... 5 0 Included in clinical (1.85)
labor task ``Clean
room, equipment,
and supplies''.
L037D..... RN/LPN/MTA....... NF Cleaning scope at 5 0 Included in clinical (1.85)
POV. labor task ``Clean
room, equipment,
and supplies''
included in post-
operative visit.
L037D..... RN/LPN/MTA....... NF Follow-up phone 3 0 Typically billed (1.11)
calls and with an E/M or
prescriptions. other evaluation
service.
L037D..... RN/LPN/MTA....... NF Setup scope (non 5 0 Included in clinical (1.85)
facility setting labor task
only). ``Prepare room,
equipment,
supplies''.
L037D..... RN/LPN/MTA....... NF Setup scope at 5 0 Included in clinical (1.85)
POV. labor task ``Clean
room, equipment,
and supplies''
included in post-
operative visit.
SA042..... pack, cleaning NF ................. 2 0 Removed supply (34.12)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
46601...... Diagnostic EF031..... table, power..... NF ................. 41 33 Refined equipment (0.13)
anoscopy. time to conform to
established
policies for non-
highly technical
equipment.
46607...... Diagnostic EF031..... table, power..... NF ................. 49 38 Refined equipment (0.18)
anoscopy & biopsy. time to conform to
established
policies for non-
highly technical
equipment.
5039A...... Njx px nfrosgrm &/ ED050..... PACS Workstation NF ................. 58 67 Refined equipment 0.20
urtrgrm. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 284 277 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 44 0 Equipment item (231.21)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 44 Equipment item 61.30
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 284 277 Standard equipment (0.10)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 284 277 Standard equipment (0.04)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 44 62 Refined equipment 0.08
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L051A..... RN............... NF Monitor pt 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; a (1.60)
similar item is
already included in
this service.

[[Page 41743]]

SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5039B...... Njx px nfrosgrm &/ ED050..... PACS Workstation NF ................. 21 45 Refined equipment 0.53
urtrgrm. Proxy. time to conform to
clinical labor time
(Full intraservice
period minus
monitoring time).
EF027..... table, NF ................. 22 40 Refined equipment 0.03
instrument, time to conform to
mobile. established
policies for non-
highly technical
equipment.
EL011..... room, angiography NF ................. 22 0 Equipment item (115.60)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 22 Equipment item 30.65
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ168..... light, exam...... NF ................. 22 40 Refined equipment 0.08
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Assist physician 15 0 Removed clinical (5.55)
in performing labor associated
procedure. with moderate
sedation; moderate
sedation not
typical for this
procedure.
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB001..... cap, surgical.... NF ................. 4 3 Aligned supply (0.21)
quantities with
changes to number
of clinical labor
staff.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB033..... mask, surgical... NF ................. 2 1 Aligned supply (0.20)
quantities with
changes to number
of clinical labor
staff.
SB039..... shoe covers, NF ................. 4 3 Aligned supply (0.34)
surgical. quantities with
changes to number
of clinical labor
staff.
5039C...... Plmt nephrostomy ED050..... PACS Workstation NF ................. 71 80 Refined equipment 0.20
catheter. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 300 290 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 60 0 Equipment item (315.28)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 60 Equipment item 83.59
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 300 290 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 300 290 Standard equipment (0.06)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 60 75 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41744]]

L037D..... RN/LPN/MTA....... NF Monitor pt 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L051A..... RN............... NF Monitor pt. 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; items (1.60)
included in pack,
moderate sedation
(SA044).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5039D...... Plmt ED050..... PACS Workstation NF ................. 83 92 Refined equipment 0.20
nephroureteral Proxy. time to conform to
catheter. clinical labor time.
EF027..... table, NF ................. 312 302 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 72 0 Equipment item (378.34)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 72 Equipment item 100.30
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 312 302 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 312 302 Standard equipment (0.06)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 72 87 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt. 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L051A..... RN............... NF Monitor pt. 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; a (1.60)
similar item is
already included in
this service.

[[Page 41745]]

SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
SD306..... Nephroureteral NF ................. 1 0 Supply not mentioned (117.90)
Catheter. in SOR work
description.
5039E...... Exchange ED050..... PACS Workstation NF ................. 21 50 Refined equipment 0.64
nephrostomy cath. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 90 45 Refined equipment (0.06)
instrument, time to conform to
mobile. established
policies for non-
highly technical
equipment.
EL011..... room, angiography NF ................. 30 0 Equipment item (157.64)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 30 Equipment item 41.79
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ168..... light, exam...... NF ................. 30 45 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Assist physician 20 0 Clinical labor type (7.40)
in performing replaced by another
procedure. labor type; see
preamble.
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
SA031..... kit, suture NF ................. 1 0 Redundant when used (1.05)
removal. together with
supply catheter
percutaneous
fastener (Percu--
Stay) (SD146).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB001..... cap, surgical.... NF ................. 4 3 Aligned supply (0.21)
quantities with
changes to number
of clinical labor
staff.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB033..... mask, surgical... NF ................. 2 1 Aligned supply (0.20)
quantities with
changes to number
of clinical labor
staff.
SB039..... shoe covers, NF ................. 4 3 Aligned supply (0.34)
surgical. quantities with
changes to number
of clinical labor
staff.
5039M...... Convert ED050..... PACS Workstation NF ................. 68 77 Refined equipment 0.20
nephrostomy Proxy. time to conform to
catheter. clinical labor time.
EF027..... table, NF ................. 297 287 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 57 0 Equipment item (299.52)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 57 Equipment item 79.41
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 297 287 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 297 287 Standard equipment (0.06)
and time for
moderate sedation.

[[Page 41746]]

EQ168..... light, exam...... NF ................. 57 72 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L051A..... RN............... NF Monitor pt 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; items (1.60)
included in pack,
moderate sedation
(SA044).
SA031..... kit, suture NF ................. 1 0 Redundant when used (1.05)
removal. together with
supply catheter
percutaneous
fastener (Percu--
Stay) (SD146).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5069G...... Plmt ureteral ED050..... PACS Workstation NF ................. 68 77 Refined equipment 0.20
stent prq. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 297 287 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 57 0 Equipment item (299.52)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 57 Equipment item 79.41
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 297 287 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 297 287 Standard equipment (0.06)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 57 72 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt. 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.

[[Page 41747]]

L051A..... RN............... NF Monitor pt. 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; items (1.60)
included in pack,
moderate sedation
(SA044).
SA031..... kit, suture NF ................. 1 0 Redundant when used (1.05)
removal. together with
supply catheter
percutaneous
fastener (Percu--
Stay) (SD146).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5069H...... Plmt ureteral ED050..... PACS Workstation NF ................. 85 94 Refined equipment 0.20
stent prq. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 314 304 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 74 0 Equipment item (388.85)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 74 Equipment item 103.09
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 314 304 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 314 304 Standard equipment (0.06)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 74 89 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt. 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Acquire images 47 46 Rounding error in CL (0.41)
Technologist. (75%). time calculation.
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L051A..... RN............... NF Monitor pt. 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; items (1.60)
included in pack,
moderate sedation
(SA044).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.

[[Page 41748]]

SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; a (4.67)
sterile. similar item is
already included in
this service.
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5069I...... Plmt ureteral ED050..... PACS Workstation NF ................. 98 107 Refined equipment 0.20
stent prq. Proxy. time to conform to
clinical labor time.
EF027..... table, NF ................. 327 317 Standard equipment (0.01)
instrument, and time for
mobile. moderate sedation.
EL011..... room, angiography NF ................. 87 0 Equipment item (457.16)
replaced by another
item; see preamble.
EL014..... room, NF ................. 0 87 Equipment item 121.20
radiographic- replaces another
fluoroscopic. item; see preamble.
EQ011..... ECG, 3-channel NF ................. 327 317 Standard equipment (0.14)
(with SpO2, and time for
NIBP, temp, moderate sedation.
resp).
EQ032..... IV infusion pump. NF ................. 327 317 Standard equipment (0.06)
and time for
moderate sedation.
EQ168..... light, exam...... NF ................. 87 102 Refined equipment 0.06
time to conform to
established
policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... NF Monitor pt. 0 45 Clinical labor type 16.65
following replaces another
service/check clinical labor
tubes, monitors, type; see preamble.
drains (not
related to
moderate
sedation).
L041B..... Radiologic NF Clean room/ 6 3 Refined time to (1.23)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L051A..... RN............... NF Monitor pt. 45 0 Clinical labor type (22.95)
following replaced by another
service/check labor type; see
tubes, monitors, preamble.
drains (not
related to
moderate
sedation).
SA019..... kit, iv starter.. NF ................. 1 0 Duplicative; items (1.60)
included in pack,
moderate sedation
(SA044).
SA042..... pack, cleaning NF ................. 1 0 Removed supply (17.06)
and associated with
disinfecting, equipment item not
endoscope. typically used in
this service.
SB022..... gloves, non- NF ................. 2 0 Duplicative; items (0.17)
sterile. included in pack,
minimum multi-
specialty visit
(SA048).
SB024..... gloves, sterile.. NF ................. 2 1 Duplicative; items (0.84)
included in pack,
moderate sedation
(SA044).
SB028..... gown, surgical, NF ................. 2 1 Duplicative; items (4.67)
sterile. included in pack,
moderate sedation
(SA044).
SC049..... stop cock, 3-way. NF ................. 1 0 Duplicative; items (1.18)
included in pack,
moderate sedation
(SA044).
5443A...... Repair corporeal EF031..... table, power..... F ................. 144 135 Refined equipment (0.15)
tear. time to conform to
clinical labor time.
EF031..... table, power..... NF ................. 144 135 Refined equipment (0.15)
time to conform to
clinical labor time.

[[Page 41749]]

EQ168..... light, exam...... F ................. 144 135 Refined equipment (0.04)
time to conform to
clinical labor time.
EQ168..... light, exam...... NF ................. 144 135 Refined equipment (0.04)
time to conform to
clinical labor time.
657XG...... Impltj ntrstrml L038A..... COMT/COT/RN/CST.. F Discharge day 6 0 Aligned clinical (2.28)
crnl rng seg. management same labor discharge day
day 99238 -6 management time
minutes. with the work time
discharge day code.
68801...... Dilate tear duct L038A..... COMT/COT/RN/CST.. F Discharge day 6 0 Aligned clinical (2.28)
opening. management same labor discharge day
day 99238 -6 management time
minutes. with the work time
discharge day code.
68810...... Probe nasolacrimal L038A..... COMT/COT/RN/CST.. F Discharge day 6 0 Aligned clinical (2.28)
duct. management same labor discharge day
day 99238 -6 management time
minutes. with the work time
discharge day code.
68816...... Probe nl duct w/ EL006..... lane, screening NF ................. 16 47 Refined equipment 2.77
balloon. (oph). time to conform to
clinical labor time.
69200...... Clear outer ear EF008..... chair with NF ................. 22 27 Refined equipment 0.05
canal. headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 19 27 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 26 31 Refined equipment 0.01
basic ($500- time to conform to
$1,499). established
policies for
instrument packs.
EQ170..... light, fiberoptic NF ................. 22 27 Refined equipment 0.04
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
EQ183..... microscope, NF ................. 22 27 Refined equipment 0.14
operating. time to conform to
established
policies for non-
highly technical
equipment.
EQ234..... suction and NF ................. 22 27 Refined equipment 0.05
pressure time to conform to
cabinet, ENT established
(SMR). policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Dischrg gmt. same 6 0 Aligned clinical (2.22)
day (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
SH047..... lidocaine 1%-2% NF ................. 5 0 Supply item replaced (0.18)
inj (Xylocaine). by another item
(SH050); see
preamble.
SH050..... lidocaine 4% NF ................. 0 3 Supply item replaces 0.46
soln, topical another item
(Xylocaine). (SH047); see
preamble.
69220...... Clean out mastoid EF008..... chair with NF ................. 20 25 Refined equipment 0.05
cavity. headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EF015..... mayo stand....... NF ................. 17 25 Refined equipment 0.01
time to conform to
established
policies for non-
highly technical
equipment.
EQ137..... instrument pack, NF ................. 0 29 Equipment item 0.07
basic ($500- replaces another
$1,499). item (EQ138); see
preamble.
EQ138..... instrument pack, NF ................. 29 0 Equipment item (0.20)
medium ($1,500 replaced by another
and up). item (EQ137); see
preamble.
EQ183..... microscope, NF ................. 20 25 Refined equipment 0.14
operating. time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41750]]

EQ234..... suction and NF ................. 20 25 Refined equipment 0.05
pressure time to conform to
cabinet, ENT established
(SMR). policies for non-
highly technical
equipment.
L037D..... RN/LPN/MTA....... F Dischrg day gmt. 6 0 Aligned clinical (2.22)
(0.5 x 99238) labor discharge day
(enter 6 min). management time
with the work time
discharge day code.
L037D..... RN/LPN/MTA....... NF Clean surgical 15 10 Refined time to (1.85)
instrument standard time for
package. this clinical labor
task.
L037D..... RN/LPN/MTA....... NF Provide pre- 0 2 Refined time to 0.74
service standard time for
education/obtain this clinical labor
consent. task.
7208A...... X-ray exam entire ED050..... PACS Workstation NF ................. 21 25 Refined equipment 0.09
spi 1 vw. Proxy. time to conform to
clinical labor time.
7208B...... X-ray exam entire ED050..... PACS Workstation NF ................. 36 40 Refined equipment 0.09
spi 2/3 vw. Proxy. time to conform to
clinical labor time.
7208C...... X-ray exam entire ED050..... PACS Workstation NF ................. 44 48 Refined equipment 0.09
spi 4/5 vw. Proxy. time to conform to
clinical labor time.
7208D...... X-ray exam entire ED050..... PACS Workstation NF ................. 53 57 Refined equipment 0.09
spi 6/ vw. Proxy. time to conform to
clinical labor time.
73565...... X-ray exam of L041B..... Radiologic NF Greet patient and 0 3 Input added to 1.23
knees. Technologist. provide gowning. maintain
consistency with
all other codes
within family.
77385...... Ntsty modul rad tx EQ139..... intercom (incl. NF ................. 27 0 Indirect Practice (0.10)
dlvr smpl. master, pt Expense; not
substation, individually
power, wiring). allocable to a
particular patient
for a particular
service.
ER040..... laser, diode, for NF ................. 29 27 Refined equipment (0.12)
patient time to conform to
positioning established
(Probe). policies for highly
technical equipment.
ER056..... radiation NF ................. 29 27 Refined equipment (3.15)
treatment vault. time to conform to
established
policies for highly
technical equipment.
ER065..... water chiller NF ................. 29 27 Refined equipment (0.13)
(radiation time to conform to
treatment). established
policies for highly
technical equipment.
ER089..... IMRT accelerator. NF ................. 29 27 Refined equipment (16.14)
time to conform to
established
policies for highly
technical equipment.
ER102..... Power conditioner NF ................. 29 27 Refined equipment (0.17)
time to conform to
established
policies for highly
technical equipment.
77386...... Ntsty modul rad tx EQ139..... intercom (incl. NF ................. 42 0 Indirect Practice (0.15)
dlvr cplx. master, pt Expense; not
substation, individually
power, wiring). allocable to a
particular patient
for a particular
service.
ER040..... laser, diode, for NF ................. 44 42 Refined equipment (0.12)
patient time to conform to
positioning established
(Probe). policies for highly
technical equipment.
ER056..... radiation NF ................. 44 42 Refined equipment (3.15)
treatment vault. time to conform to
established
policies for highly
technical equipment.
ER065..... water chiller NF ................. 44 42 Refined equipment (0.13)
(radiation time to conform to
treatment). established
policies for highly
technical equipment.
ER089..... IMRT accelerator. NF ................. 44 42 Refined equipment (16.14)
time to conform to
established
policies for highly
technical equipment.

[[Page 41751]]

ER102..... Power conditioner NF ................. 44 42 Refined equipment (0.17)
time to conform to
established
policies for highly
technical equipment.
L050C..... Radiation NF Check dressings & 2 1 Refined to conform (0.50)
Therapist. wound/home care with identical
instructions/ labor activity in
coordinate other codes in the
office visits/ family.
prescriptions.
77402...... Radiation EQ139..... intercom (incl. NF ................. 12 0 Indirect Practice (0.04)
treatment master, pt Expense; not
delivery. substation, individually
power, wiring). allocable to a
particular patient
for a particular
service.
ER040..... laser, diode, for NF ................. 14 12 Refined equipment (0.12)
patient time to conform to
positioning established
(Probe). policies for highly
technical equipment.
ER056..... radiation NF ................. 14 12 Refined equipment (3.15)
treatment vault. time to conform to
established
policies for highly
technical equipment.
ER065..... water chiller NF ................. 14 12 Refined equipment (0.13)
(radiation time to conform to
treatment). established
policies for highly
technical equipment.
ER089..... IMRT accelerator. NF ................. 14 12 Refined equipment (16.14)
time to conform to
established
policies for highly
technical equipment.
ER102..... Power conditioner NF ................. 14 12 Refined equipment (0.17)
time to conform to
established
policies for highly
technical equipment.
77407...... Radiation EQ139..... intercom (incl. NF ................. 17 0 Indirect Practice (0.06)
treatment master, pt Expense; not
delivery. substation, individually
power, wiring). allocable to a
particular patient
for a particular
service.
ER040..... laser, diode, for NF ................. 19 17 Refined equipment (0.12)
patient time to conform to
positioning established
(Probe). policies for highly
technical equipment.
ER056..... radiation NF ................. 19 17 Refined equipment (3.15)
treatment vault. time to conform to
established
policies for highly
technical equipment.
ER065..... water chiller NF ................. 19 17 Refined equipment (0.13)
(radiation time to conform to
treatment). established
policies for highly
technical equipment.
ER089..... IMRT accelerator. NF ................. 19 17 Refined equipment (16.14)
time to conform to
established
policies for highly
technical equipment.
ER102..... Power conditioner NF ................. 19 17 Refined equipment (0.17)
time to conform to
established
policies for highly
technical equipment.
77412...... Radiation EQ139..... intercom (incl. NF ................. 21 0 Indirect Practice (0.08)
treatment master, pt Expense; not
delivery. substation, individually
power, wiring). allocable to a
particular patient
for a particular
service.
ER040..... laser, diode, for NF ................. 23 21 Refined equipment (0.12)
patient time to conform to
positioning established
(Probe). policies for highly
technical equipment.
ER056..... radiation NF ................. 23 21 Refined equipment (3.15)
treatment vault. time to conform to
established
policies for highly
technical equipment.
ER065..... water chiller NF ................. 23 21 Refined equipment (0.13)
(radiation time to conform to
treatment). established
policies for highly
technical equipment.

[[Page 41752]]

ER089..... IMRT accelerator. NF ................. 23 21 Refined equipment (16.14)
time to conform to
established
policies for highly
technical equipment.
ER102..... Power conditioner NF ................. 23 21 Refined equipment (0.17)
time to conform to
established
policies for highly
technical equipment.
88104...... Cytopath fl nongyn EP024..... microscope, NF ................. 60 56 Refined to conform (0.15)
smears. compound. with identical
labor activity in
other codes in the
family.
L033A..... Lab Technician... NF Order, restock, 0.5 0 Indirect Practice (0.17)
and distribute Expense; not
specimen individually
containers with allocable to a
requisition particular patient
forms.. for a particular
service.
88106...... Cytopath fl nongyn L033A..... Lab Technician... NF Order, restock, 0.5 0 Indirect Practice (0.17)
filter. and distribute Expense; not
specimen individually
containers with allocable to a
requisition particular patient
forms.. for a particular
service.
88108...... Cytopath L033A..... Lab Technician... NF Order, restock, 0.5 0 Indirect Practice (0.17)
concentrate tech. and distribute Expense; not
specimen individually
containers with allocable to a
requisition particular patient
forms.. for a particular
service.
88160...... Cytopath smear EP038..... solvent recycling NF ................. 1 0 Refined equipment (0.05)
other source. system. time to conform to
clinical labor time.
L035A..... Lab Tech/ NF Prepare automated 6 4 Refined time to (0.70)
Histotechnologis stainer with standard time for
t. solutions and this clinical labor
load microscopic task.
slides. Set and
confirm stainer
program. Set and
confirm stainer
program.
L035A..... Lab Tech/ NF Stain air dried 5 0 See preamble text... (1.75)
Histotechnologis slides with
t. modified Wright
stain. Review
slides for
malignancy/high
cellularity
(cross
contamination).
88161...... Cytopath smear EP038..... solvent recycling NF ................. 1 0 Refined equipment (0.05)
other source. system. time to conform to
clinical labor time.
Cytopath smear L035A..... Lab Tech/ NF Prepare automated 6 4 Refined time to (0.70)
other source. Histotechnologis stainer with standard time for
t. solutions and this clinical labor
load microscopic task.
slides. Set and
confirm stainer
program. Set and
confirm stainer
program.
Cytopath smear L035A..... Lab Tech/ NF Stain air dried 5 3 Refined time to (0.70)
other source. Histotechnologis slides with standard time for
t. modified Wright this clinical labor
stain. Review task.
slides for
malignancy/high
cellularity
(cross
contamination).
88162...... Cytopath smear EP038..... solvent recycling NF ................. 1 0 Refined equipment (0.05)
other source. system. time to conform to
clinical labor time.

[[Page 41753]]

Cytopath smear L035A..... Lab Tech/ NF Other Clinical 6 4 Refined time to (0.70)
other source. Histotechnologis Activity (please standard time for
t. specify): this clinical labor
Prepare task.
automated
stainer with
solutions and
load microscopic
slides.
88182...... Cell marker study. L033A..... Lab Technician... NF Accession 6 4 Refined time to (0.66)
specimen/prepare standard time for
for examination. this clinical labor
task.
Cell marker study. L033A..... Lab Technician... NF Clean room/ 2 1 Refined time to (0.33)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).
L033A..... Lab Technician... NF Dispose of 2 1 Refined time to (0.33)
remaining standard time for
specimens, spent this clinical labor
chemicals/other task.
consumables, and
hazardous waste.
L033A..... Lab Technician... NF Prepare, pack and 2 1 Refined time to (0.33)
transport standard time for
specimens and this clinical labor
records for in- task.
house storage
and external
storage (where
applicable).
L045A..... Cytotechnologist. NF Clean room/ 2 1 Refined time to (0.45)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).
L045A..... Cytotechnologist. NF Enter data into 2 0 Refined time to (0.90)
laboratory standard time for
information this clinical labor
system, task.
multiparameter
analyses and
field data en.
L045A..... Cytotechnologist. NF Print out 5 2 Refined time to (1.35)
histograms, standard time for
assemble this clinical labor
materials with task.
paperwork to
pathologists
Review
histograms and
gating with
pathologist.
88184...... Flowcytometry/tc 1 ED031..... printer, dye NF ................. 5 1 Refined equipment (0.04)
marker. sublimation time to conform to
(photo, color). clinical labor time.
L033A..... Lab Technician... NF Clean room/ 2 1 Refined time to (0.33)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).

[[Page 41754]]

L033A..... Lab Technician... NF Enter data into 4 0 Refined time to (1.32)
laboratory standard time for
information this clinical labor
system, task.
multiparameter
analyses and
field data en.
L045A..... Cytotechnologist. NF Instrument start- 15 13 Refined to conform (0.90)
up, quality with identical
control labor activity in
functions, other codes in the
calibration, family.
centrifugation,
maintaining
specimen
tracking, logs
and labeling.
L045A..... Cytotechnologist. NF Other Clinical 10 7 Refined to conform (1.35)
Activity (please with identical
specify) Load labor activity in
specimen into other codes in the
flow cytometer, family.
run specimen,
monitor data
acquisition, and.
L045A..... Cytotechnologist. NF Print out 5 2 Refined time to (1.35)
histograms, standard time for
assemble this clinical labor
materials with task.
paperwork to
pathologists
Review
histograms and
gating with
pathologist.
88185...... Flowcytometry/tc ED031..... printer, dye NF ................. 2 1 Refined equipment (0.01)
add-on. sublimation time to conform to
(photo, color). clinical labor time.
L033A..... Lab Technician... NF Enter data into 1 0 Refined time to (0.33)
laboratory standard time for
information this clinical labor
system, task.
multiparameter
analyses and
field data en.
88321...... Microslide L033A..... Lab Technician... NF Accession 4 0 Duplication with (1.32)
consultation. specimen/prepare other clinical
for examination. labor task.
L033A..... Lab Technician... NF Register the 13 5 See preamble text... (2.64)
patient in the
information
system,
including all
demographic and
billing
information. In
addition to
stand.
L037B..... Histotechnologist NF Phone calls for 0 3 Input added to 1.11
clarifications maintain
and/or consistency with
additional all other codes
materials. within family.
88323...... Microslide L033A..... Lab Technician... NF Register the 13 5 Non-standard (2.64)
consultation. patient in the refinement, see
information preamble text.
system,
including all
demographic and
billing
information. In
addition to
stand.
L037B..... Histotechnologist NF Assemble and 1 0 Duplication with (0.37)
deliver slides other clinical
with paperwork labor task.
to pathologists.
L037B..... Histotechnologist NF Clean equipment 1 0 Duplication with (0.37)
while performing other clinical
service. labor task.
SL063..... eosin y.......... NF ................. 8 0 Redundant when used (6.41)
together with SL135.

[[Page 41755]]

SL135..... stain, NF ................. 32 8 Refined supply (1.06)
hematoxylin. quantity to what is
typical for the
procedure.
88325...... .................. EP019..... hood, ventilator NF ................. 1 0 See preamble text... --
with blower.
EP033..... slide NF ................. 6 0 See preamble text... (0.57)
coverslipper,
robotic.
EP034..... slide dryer...... NF ................. 1 0 See preamble text... --
EP035..... slide etcher- NF ................. 1 0 See preamble text... (0.05)
labeler.
EP036..... slide stainer, NF ................. 12 0 See preamble text... (0.55)
automated, high-
volume
throughput.
EP038..... solvent recycling NF ................. 4 0 See preamble text... (0.18)
system.
EP043..... water bath, NF ................. 6 0 See preamble text... (0.01)
general purpose
(lab).
ER041..... microtome........ NF ................. 6 0 See preamble text... (0.26)
L033A..... Lab Technician... NF Prepare room. 10 0 Indirect Practice (3.30)
Filter and Expense; not
replenish stains individually
and supplies. allocable to a
(including OCT particular patient
blocks, set up for a particular
grossing station service.
with colored
stain.
L033A..... Lab Technician... NF Accession 4 0 Duplication with (1.32)
specimen/prepare other clinical
for examination. labor task.
L033A..... Lab Technician... NF Dispose of 1 0 See preamble text... (0.33)
remaining
specimens, spent
chemicals/other
consumables, and
hazardous waste.
L033A..... Lab Technician... NF Register the 13 5 See preamble text... (2.64)
patient in the
information
system,
including all
demographic and
billing
information. In
addition to
stand.
L033A..... Lab Technician... NF prepare, pack and 2 0 See preamble text... (0.66)
transport
specimens and
records for in-
house storage
and external
storage.
L037B..... Histotechnologist NF Clean equipment 1 0 Duplication with (0.37)
while performing other clinical
service. labor task.
L037B..... Histotechnologist NF Complete workload 1 0 See preamble text... (0.37)
recording logs.
Collate slides
and paperwork.
Deliver to
pathologist.
L037B..... Histotechnologist NF Prepare automated 1 0 See preamble text... (0.37)
coverslipper,
remove slides
from stainer and
place on
coverslipper.

[[Page 41756]]

L037B..... Histotechnologist NF Prepare automated 1 0 See preamble text... (0.37)
stainer with
solutions and
load microscopic
slides. Set and
confirm stainer
program. Set and
confirm stainer
program.
L037B..... Histotechnologist NF Slide preparation 4 0 See preamble text... (1.48)
sectioning and
recuts, quality
control
function,
maintaining
specimen
tracking, logs
and labeling.
SB023..... gloves, non- NF ................. 2 0 See preamble text... (0.38)
sterile, nitrile.
SB027..... gown, staff, NF ................. 0.1 0 See preamble text... (0.12)
impervious.
SF004..... blade, microtome. NF ................. 0.2 0 See preamble text... (0.34)
SL020..... bleach........... NF ................. 10 0 See preamble text... (0.01)
SL030..... cover slip, glass NF ................. 2 0 See preamble text... (0.16)
SL063..... eosin y.......... NF ................. 8 0 See preamble text... (6.41)
SL078..... histology NF ................. 0.2 0 See preamble text... (0.29)
freezing spray
(Freeze-It).
SL085..... label for NF ................. 20 10 See preamble text... (0.26)
microscope
slides.
SL095..... mounting media NF ................. 2 0 See preamble text... (0.07)
(Histomount).
SL122..... slide, microscope NF ................. 2 0 See preamble text... (0.11)
SL135..... stain, NF ................. 32 0 See preamble text... (1.41)
hematoxylin.
SL151..... xylenes solvent.. NF ................. 60 0 See preamble text... (0.72)
SL189..... ethanol, 100%.... NF ................. 60 0 See preamble text... (0.20)
SL190..... ethanol, 70%..... NF ................. 8 0 See preamble text... (0.03)
SL248..... ethanol, 95%..... NF ................. 36 0 See preamble text... (0.12)
SM027..... wipes, lens NF ................. 2 0 See preamble text... (0.03)
cleaning (per
wipe) (Kimwipe).
88329...... Path consult L037B..... Histotechnologist NF Assist 10 3 Refined time to (2.59)
introp. pathologist with standard time for
gross specimen this clinical labor
examination. task.
L037B..... Histotechnologist NF Clean room/ 5 1 Refined time to (1.48)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).
88331...... Path consult L033A..... Lab Technician... NF Prepare room. 10 0 Indirect Practice 1.48
intraop 1 bloc. Filter and Expense; not
replenish stains individually
and supplies. allocable to a
(including OCT particular patient
blocks, set up for a particular
grossing station service.
with colored
stai.
L037B..... Histotechnologist NF Accession 0 4 Input added to 1.48
specimen/prepare maintain
for examination. consistency with
all other codes
within family.
L037B..... Histotechnologist NF Assemble and 2 0.5 Refined time to (0.56)
deliver slides standard time for
with paperwork this clinical labor
to pathologists. task.
L037B..... Histotechnologist NF Assist 10 3 Refined time to (2.59)
pathologist with standard time for
gross specimen this clinical labor
examination. task.

[[Page 41757]]

L037B..... Histotechnologist NF Clean room/ 10 1 Refined time to (3.33)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).
SL134..... stain, frozen NF ................. 0 1 Supply item replaces 0.57
section, H&E another item
(1ml per slide). (SL231); see
preamble.
SL231..... kit, stain, H&E.. NF ................. 0.1 0 Supply item replaced (9.80)
by another item
(SL134); see
preamble.
88332...... Path consult L037B..... Histotechnologist NF Assemble and 2 0.5 Refined time to (0.56)
intraop addl. deliver slides standard time for
with paperwork this clinical labor
to pathologists. task.
L037B..... Histotechnologist NF Assist 2 3 Refined time to 0.37
pathologist with standard time for
gross specimen this clinical labor
examination. task.
L037B..... Histotechnologist NF Clean room/ 0 1 Input added to 0.37
equipment maintain
following consistency with
procedure all other codes
(including any within family.
equipment
maintenance that
must be done
after the
procedure).
SF047..... scalpel, safety, NF ................. 0 1 Input added to 2.14
surgical, with maintain
blade (#10-20). consistency with
all other codes
within family.
SL134..... stain, frozen NF ................. 0 1 Supply item replaces 0.57
section, H&E another item
(1ml per slide). (SL231); see
preamble.
SL231..... kit, stain, H&E.. NF ................. 0.1 0 Supply item replaced (9.80)
by another item
(SL134); see
preamble.
88333...... Intraop cyto path L033A..... Lab Technician... NF Prepare room. 10 0 Indirect Practice (3.30)
consult 1. Filter and Expense; not
replenish stains individually
and supplies. allocable to a
(including OCT particular patient
blocks, set up for a particular
grossing station service.
with colored
stai.
L037B..... Histotechnologist NF Accession 0 4 Input added to 1.48
specimen/prepare maintain
for examination. consistency with
all other codes
within family.
L037B..... Histotechnologist NF Assemble and 2 0.5 Refined time to (1.48)
deliver slides standard time for
with paperwork this clinical labor
to pathologists. task.
L037B..... Histotechnologist NF Assist 7 3 Refined time to (1.48)
pathologist with standard time for
gross specimen this clinical labor
examination task.
(including
performance of
intraoperative
frozen sections).
L037B..... Histotechnologist NF Clean room/ 5 1 Refined time to (1.48)
equipment standard time for
following this clinical labor
procedure task.
(including any
equipment
maintenance that
must be done
after the
procedure).

[[Page 41758]]

SL122..... slide, microscope NF ................. 10 4 Refined supply (0.33)
quantity to what is
typical for the
procedure.
SL231..... kit, stain, H&E.. NF ................. 0.1 0 Removed supply not (9.80)
typically used in
this service.
88334...... Intraop cyto path L037B..... Histotechnologist NF Assemble and 2 0.5 Refined time to (0.56)
consult 2. deliver slides standard time for
with paperwork this clinical labor
to pathologists. task.
L037B..... Histotechnologist NF Assist 5 3 Refined time to (0.74)
pathologist with standard time for
gross specimen this clinical labor
examination task.
(including
performance of
intraoperative
frozen sections).
L037B..... Histotechnologist NF Clean room/ 0 1 Input added to 0.37
equipment maintain
following consistency with
procedure all other codes
(including any within family.
equipment
maintenance that
must be done
after the
procedure).
SL122..... slide, microscope NF ................. 10 4 Refined supply (0.33)
quantity to what is
typical for the
procedure.
SL231..... kit, stain, H&E.. NF ................. 0.1 0 Removed supply not (9.80)
typically used in
this service.
88355...... Analysis skeletal EP046..... freezer, NF ................. 30 0 Indirect Practice (1.32)
muscle. ultradeep (-70 Expense; not
degrees). individually
allocable to a
particular patient
for a particular
service.
L033A..... Lab Technician... NF Accession 6 4 Refined time to (0.66)
specimen/prepare standard time for
for examination. this clinical labor
task.
L033A..... Lab Technician... NF Assemble and 2 0.5 Refined time to (0.50)
deliver slides standard time for
with paperwork this clinical labor
to pathologists. task.
L033A..... Lab Technician... NF Clean room, 2 1 Refined time to (0.33)
equipment standard time for
following this clinical labor
procedure task.
including any
equipment
maintenance that
must be done
after the
procedure.
L033A..... Lab Technician... NF Dispose of 2 1 Refined time to (0.33)
remaining standard time for
specimens, spent this clinical labor
chemicals/other task.
consumables, and
hazardous waste.
L033A..... Lab Technician... NF Prepare specimen 9 0.5 Refined time to (2.81)
containers/ standard time for
preload fixative/ this clinical labor
label containers/ task.
distribute
requisition
form(s) to
physician.
L033A..... Lab Technician... NF Prepare specimen 5 0 Refined time to (1.65)
for -70 degree standard time for
storage, log this clinical labor
specimen and task.
place in freezer
for retrieval
and performance
of quantitative.

[[Page 41759]]

L033A..... Lab Technician... NF Prepare, pack and 4 1 Refined time to (0.99)
transport standard time for
specimens and this clinical labor
records for task.
storage.
L033A..... Lab Technician... NF Receive phone 7 5 See preamble text... (0.66)
call from
referring
laboratory/
facility with
scheduled
procedure to
arrange special
delivery of
specimen p.
L037B..... Histotechnologist NF Assist 7 3 Refined time to (1.48)
pathologist with standard time for
gross this clinical labor
examination. task.
88360...... Tumor EP024..... microscope, NF ................. 36 25 See preamble text... (0.41)
immunohistochem/ compound.
manual.
L033A..... Lab Technician... NF Recycle xylene 1 0 Non-standard (0.33)
from tissue clinical labor task.
processor and
stainer.
L037B..... Histotechnologist NF Enter patient 5 1 Refined time to (1.48)
data, standard time for
computational this clinical labor
prep for task.
antibody
testing,
generate and
apply bar codes
to slides, and
enter data for.
L037B..... Histotechnologist NF Verify results 1 0 Refined time to (0.37)
and complete standard time for
work load this clinical labor
recording logs. task.
88361...... Tumor L033A..... Lab Technician... NF Recycle xylene 1 0 Non-standard (0.33)
immunohistochem/ from tissue clinical labor task.
comput. processor and
stainer.
L037B..... Histotechnologist NF Enter patient 5 1 Refined time to (1.48)
data, standard time for
computational this clinical labor
prep for task.
antibody
testing,
generate and
apply bar codes
to slides, and
enter data for.
L037B..... Histotechnologist NF Verify results 1 0 Refined time to (0.37)
and complete standard time for
work load this clinical labor
recording logs. task.
88362...... Nerve teasing L033A..... Lab Technician... NF Assemble and 2 0.5 Refined time to (0.50)
preparations. deliver cedar standard time for
mounted slides this clinical labor
with paperwork task.
to pathologists.
L033A..... Lab Technician... NF Assemble other 5 0.5 Refined time to (1.49)
light microscopy standard time for
slides, epon this clinical labor
nerve biopsy task.
slides, and
clinical
history, and
present to
pathologist to
pr.

[[Page 41760]]

L033A..... Lab Technician... NF Clean room/ 7 1 Refined time to (1.98)
equipment standard time for
following this clinical labor
procedure task.
(including
dissecting
microscope and
dissection work
area. Cedar oil
specific c.
L033A..... Electrodiagnostic NF Preparation: 2 0.5 Refined time to (0.50)
Technologist. labeling of standard time for
blocks and this clinical labor
containers and task.
document
location and
processor used.
L037B..... Histotechnologist NF Accession 10 4 Refined time to (2.22)
specimen and standard time for
prepare for this clinical labor
examination. task.
L037B..... Histotechnologist NF Assist 10 5 Non-standard (1.85)
pathologist with refinement, see
gross specimen preamble text.
examination
including the
following; A ;
Selection of
fresh unfixed
tissue samp.
L037B..... Histotechnologist NF Consult with 7 0 Task would not be (2.59)
pathologist required for the
regarding typical procedure.
representation
needed, block
selection and
appropriate
technique.
L037B..... Histotechnologist NF Dispose of 2 1 Refined time to (0.37)
remaining standard time for
specimens, spent this clinical labor
chemicals/other task.
consumables, and
hazardous waste.
L037B..... Histotechnologist NF Manage any 2 0 Refined time to (0.74)
relevant standard time for
utilization this clinical labor
review/quality task.
assurance
activities and
regulatory
compliance
documentation.
L037B..... Histotechnologist NF Prepare specimen 12 0.5 Refined time to (4.26)
containers standard time for
preload fixative this clinical labor
label containers task.
distribute
requisition
form(s) to
physician.
L037B..... Histotechnologist NF Prepare, pack and 10 0 Refined time to (3.70)
transport cedar standard time for
oiled glass this clinical labor
slides and task.
records for in-
house special
storage (need to
be stored flat).
L037B..... Histotechnologist NF Prepare, pack and 2 1 Refined time to (0.37)
transport standard time for
specimens and this clinical labor
records for in- task.
house storage
and external
storage (where
applicable).

[[Page 41761]]

L037B..... Histotechnologist NF Storage remaining 5 0 Refined time to (1.85)
specimen. standard time for
(Osmicated nerve this clinical labor
strands, task.
potential for
additional
teased
specimens).
92511...... Nasopharyngoscopy. EF008..... chair with NF ................. 19 26 Refined equipment 0.08
headrest, exam, time to conform to
reclining. established
policies for non-
highly technical
equipment.
EQ167..... light source, NF ................. 19 0 Redundant when used (0.51)
xenon. together with
EQ170; see preamble.
EQ170..... light, fiberoptic NF ................. 19 26 Refined equipment 0.06
headlight w- time to conform to
source. established
policies for non-
highly technical
equipment.
ES020..... fiberscope, NF ................. 46 53 Refined equipment 0.26
flexible, time to conform to
rhinolaryngoscop established
y. policies for scopes.
ES031..... video system, NF ................. 19 26 Refined equipment 0.90
endoscopy time to conform to
(processor, established
digital capture, policies for non-
monitor, highly technical
printer, cart). equipment.
L037D..... RN/LPN/MTA....... F Dischrge Day 6 0 Aligned clinical (2.22)
mgmt. (0.5 x labor discharge day
99238) (enter 6 management time
min). with the work time
discharge day code.
SB006..... drape, non- NF ................. 1 0 Removed supply not (0.22)
sterile, sheet typically used in
40in x 60in. this service.
SB027..... gown, staff, NF ................. 2 0 Removed supply not (2.37)
impervious. typically used in
this service.
SB033..... mask, surgical... NF ................. 2 0 Removed supply not (0.39)
typically used in
this service.
SD070..... endosheath....... NF ................. 1 0 Removed supply not (17.25)
typically used in
this service.
95812...... Eeg 41-60 minutes. EF003..... bedroom furniture NF ................. 124 99 Refined equipment (0.15)
(hospital bed, time to conform to
table, reclining established
chair). policies for non-
highly technical
equipment.
EQ017..... EEG, digital, NF ................. 133 99 Refined equipment (4.99)
prolonged time to conform to
testing system established
(computer w- policies for non-
remote camera). highly technical
equipment.
L047B..... REEGT............ NF Assist physician 79 50 Refined clinical (13.63)
in performing labor time to match
procedure. physician
intraservice time.
L047B..... REEGT............ NF Enter patient 2 0 Refined to conform (0.94)
information into with identical
laboratory log labor activity in
book. other codes in the
family.
L047B..... REEGT............ NF Provide pre- 2 0 Duplication with (0.94)
service other clinical
education/obtain labor task.
consent.
L047B..... REEGT............ NF Transfer data to 4 2 Refined time to (0.94)
reading station standard time for
& archive data. this clinical labor
task.
95813...... Eeg over 1 hour... EF003..... bedroom furniture NF ................. 147 129 Refined equipment (0.11)
(hospital bed, time to conform to
table, reclining established
chair). policies for non-
highly technical
equipment.
EQ017..... EEG, digital, NF ................. 156 129 Refined equipment (3.96)
prolonged time to conform to
testing system established
(computer w- policies for non-
remote camera). highly technical
equipment.
L047B..... REEGT............ NF Assist physician 102 80 Refined clinical (10.34)
in performing labor time to match
procedure. physician
intraservice time.

[[Page 41762]]

L047B..... REEGT............ NF Enter patient 2 0 Refined to conform (0.94)
information into with identical
laboratory log labor activity in
book. other codes in the
family.
L047B..... REEGT............ NF Provide pre- 2 0 Duplication with (0.94)
service other clinical
education/obtain labor task.
consent.
L047B..... REEGT............ NF Transfer data to 4 2 Refined time to (0.94)
reading station standard time for
& archive data. this clinical labor
task.
95863...... Muscle test 3 EF023..... table, exam...... NF ................. 52 55 Refined equipment 0.01
limbs. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 52 55 Refined equipment 0.44
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
L037A..... Electrodiagnostic NF Clean room/ 0 3 Refined to conform 1.11
Technologist. equipment by with identical
physician staff. labor activity in
other codes in the
family.
95864...... Muscle test 4 EF023..... table, exam...... NF ................. 62 65 Refined equipment 0.01
limbs. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 62 65 Refined equipment 0.44
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
L037A..... Electrodiagnostic NF Other Clinical 6 0 Refined to conform (2.22)
Technologist. Activity--specif with identical
y:Prepare labor activity in
technician other codes in the
report, family.
summarize
clinical and
electrodiagnosti
c data, and
interpre.
95869...... Muscle test thor EF023..... table, exam...... NF ................. 27 30 Refined equipment 0.01
paraspinal. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 27 30 Refined equipment 0.44
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
L037A..... Electrodiagnostic NF Clean room/ 0 3 Refined to conform 1.11
Technologist. equipment by with identical
physician staff. labor activity in
other codes in the
family.
95870...... Muscle test EF023..... table, exam...... NF ................. 27 30 Refined equipment 0.01
nonparaspinal. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 27 30 Refined equipment 0.44
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
L037A..... Electrodiagnostic NF Clean room/ 0 3 Refined to conform 1.11
Technologist. equipment by with identical
physician staff. labor activity in
other codes in the
family.
SD275..... Disposable NF ................. 6 1 Refined supply (13.75)
electrode pack. quantity to what is
typical for the
procedure.
95923...... Autonomic nrv syst EF023..... table, exam...... NF ................. 51 43 Refined equipment (0.02)
funj test. time to conform to
established
policies for non-
highly technical
equipment.
EQ035..... QSART acquisition NF ................. 46 43 Refined equipment (0.33)
system (Q-Sweat). time to conform to
established
policies for non-
highly technical
equipment.

[[Page 41763]]

EQ124..... stimulator, NF ................. 46 43 Refined equipment (0.01)
constant time to conform to
current, w- established
stimulating and policies for non-
grounding highly technical
electrodes equipment.
(Grass
Telefactor).
EQ171..... light, infra-red, NF ................. 46 43 Refined equipment ........
ceiling mount. time to conform to
established
policies for non-
highly technical
equipment.
L037A..... Electrodiagnostic NF Clean room/ 5 0 Typically billed (1.85)
Technologist. equipment by with an E/M or
physician staff. other evaluation
service.
L037A..... Electrodiagnostic NF Complete 5 0 Typically billed (1.85)
Technologist. diagnostic with an E/M or
forms, lab & X- other evaluation
ray requisitions. service.
L037A..... Electrodiagnostic NF Complete pre- 5 2 Refined to conform (1.11)
Technologist. service with identical
diagnostic & labor activity in
referral forms. other codes in the
family.
L037A..... Electrodiagnostic NF Prepare room, 0 2 Refined time to 0.74
Technologist. equipment, standard time for
supplies. this clinical labor
task.
SA014..... kit, electrode, NF ................. 4 3 See preamble text... (4.01)
iontophoresis.
SA048..... pack, minimum NF ................. 1 0 Typically billed (1.14)
multi-specialty with an E/M or
visit. other evaluation
service.
95928...... C motor evoked EF023..... table, exam...... NF ................. 65 45 Refined equipment (0.06)
uppr limbs. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 65 45 Refined equipment (2.95)
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
EQ178..... magnetic NF ................. 65 45 Refined equipment (0.16)
stimulator hand time to conform to
coil (70-90mm). established
policies for non-
highly technical
equipment.
EQ180..... magnetic NF ................. 65 45 Refined equipment (1.43)
stimulator time to conform to
system (BiStim). established
policies for non-
highly technical
equipment.
L047B..... REEGT............ NF Assist physician 60 40 Refined clinical (9.40)
in performing labor time to match
procedure. physician
intraservice time.
L047B..... REEGT............ NF Other Clinical 3 0 Duplication with (1.41)
Activity--specif other clinical
y: Review labor task.
requisition.
Assess for
special needs.
Give patient
instructions for
test prepa.
SA048..... pack, minimum NF ................. 1 0 Typically billed (1.14)
multi-specialty with an E/M or
visit. other evaluation
service.
95929...... C motor evoked lwr EF023..... table, exam...... NF ................. 65 45 Refined equipment (0.06)
limbs. time to conform to
established
policies for non-
highly technical
equipment.
EQ024..... EMG-NCV-EP NF ................. 65 45 Refined equipment (2.95)
system, 8 time to conform to
channel. established
policies for non-
highly technical
equipment.
EQ179..... magnetic NF ................. 65 45 Refined equipment (0.24)
stimulator leg time to conform to
coil (110mm). established
policies for non-
highly technical
equipment.
EQ180..... magnetic NF ................. 65 45 Refined equipment (1.43)
stimulator time to conform to
system (BiStim). established
policies for non-
highly technical
equipment.

[[Page 41764]]

L047B..... REEGT............ NF Assist physician 60 40 Refined clinical (9.40)
in performing labor time to match
procedure. physician
intraservice time.
L047B..... REEGT............ NF Other Clinical 3 0 Duplication with (1.41)
Activity--specif other clinical
y:Review labor task.
requisition.
Assess for
special needs.
Give patient
instructions for
test prepa.
95933...... Blink reflex test. L037A..... Electrodiagnostic NF Clean room/ 5 3 Refined time to (0.74)
Technologist. equipment by standard time for
physician staff. this clinical labor
task.
L037A..... Electrodiagnostic NF Prepare room, 0 2 Refined time to 0.74
Technologist. equipment, standard time for
supplies. this clinical labor
task.
95956...... Eeg monitor EF003..... bedroom furniture NF ................. 772 769 Refined equipment (0.02)
technol attended. (hospital bed, time to conform to
table, reclining established
chair). policies for non-
highly technical
equipment.
EQ017..... EEG, digital, NF ................. 772 769 Refined equipment (0.44)
prolonged time to conform to
testing system established
(computer w- policies for non-
remote camera). highly technical
equipment.
EQ047..... air compressor, NF ................. 52 49 Refined equipment ........
safety. time to conform to
established
policies for non-
highly technical
equipment.
L047B..... REEGT............ NF Other Clinical 3 0 Duplication with (1.41)
Activity--specif other clinical
y: Coordinate labor task.
pretesting
services/review
test/exam
results.
L047B..... REEGT............ NF Provide pre- 2 0 Duplication with (0.94)
service other clinical
education/obtain labor task.
consent.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 14--Crosswalk for Establishing CY 2016 New, Revised, and Potentially Misvalued Codes Malpractice RVUs
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
CY 2016 New, Revised or Potentially MMalpractice Risk Factor Crosswalk Code
----------------------------------------------------------------------------------------------------------------
11750........................ Removal of nail bed..... 11750........................ Removal of nail bed.
20240........................ Bone biopsy excisional.. 20240........................ Bone biopsy excisional.
27280........................ Fusion of sacroiliac 27280........................ Fusion of sacroiliac
joint. joint.
31622........................ Dx bronchoscope/wash.... 31622........................ Dx bronchoscope/wash.
3160A........................ Bronch ebus sampling 1/2 31620........................ Endobronchial us add-on.
node.
3160B........................ Bronch ebus samplng 3/> 31620........................ Endobronchial us add-on.
node.
31625........................ Bronchoscopy w/biopsy(s) 31625........................ Bronchoscopy w/
biopsy(s).
31626........................ Bronchoscopy w/markers.. 31626........................ Bronchoscopy w/markers.
31628........................ Bronchoscopy/lung bx 31628........................ Bronchoscopy/lung bx
each. each.
31629........................ Bronchoscopy/needle bx 31629........................ Bronchoscopy/needle bx
each. each.
3160C........................ Bronch ebus ivntj perph 31620........................ Endobronchial us add-on.
les.
31632........................ Bronchoscopy/lung bx 31632........................ Bronchoscopy/lung bx
addl. addl.
31633........................ Bronchoscopy/needle bx 31633........................ Bronchoscopy/needle bx
addl. addl.
3347A........................ Implant tcat pulm vlv 93581........................ Transcath closure of
perq. vsd.
3725A........................ Intrvasc us noncoronary 37250........................ Iv us first vessel add-
1st. on.
3725B........................ Intrvasc us noncoronary 37251........................ Iv us each add vessel
addl. add-on.
38570........................ Laparoscopy lymph node 38570........................ Laparoscopy lymph node
biop. biop.
38571........................ Laparoscopy 38571........................ Laparoscopy
lymphadenectomy. lymphadenectomy.
38572........................ Laparoscopy 38572........................ Laparoscopy
lymphadenectomy. lymphadenectomy.
3940A........................ Mediastinoscpy w/medstnl 33924........................ Remove pulmonary shunt.
bx.
3940B........................ Mediastinoscpy w/lmph 32606........................ Thoracoscopy w/bx med
nod bx. space.
44380........................ Small bowel endoscopy br/ 44380........................ Small bowel endoscopy br/
wa. wa.
44381........................ Small bowel endoscopy br/ 45340........................ Sig w/tndsc balloon
wa. dilation.
44382........................ Small bowel endoscopy... 44382........................ Small bowel endoscopy.

[[Page 41765]]

44384........................ Small bowel endoscopy... 44383........................ Ileoscopy w/stent.
44385........................ Endoscopy of bowel pouch 44385........................ Endoscopy of bowel
pouch.
44386........................ Endoscopy bowel pouch/ 44386........................ Endoscopy bowel pouch/
biop. biop.
44388........................ Colonoscopy thru stoma 44388........................ Colonoscopy thru stoma
spx. spx.
44389........................ Colonoscopy with biopsy. 44389........................ Colonoscopy with biopsy.
44390........................ Colonoscopy for foreign 44390........................ Colonoscopy for foreign
body. body.
44391........................ Colonoscopy for bleeding 44391........................ Colonoscopy for
bleeding.
44392........................ Colonoscopy & 44392........................ Colonoscopy &
polypectomy. polypectomy.
44394........................ Colonoscopy w/snare..... 44394........................ Colonoscopy w/snare.
44401........................ Colonoscopy with 44393........................ Colonoscopy lesion
ablation. removal.
44402........................ Colonoscopy w/stent 44397........................ Colonoscopy w/stent.
plcmt.
44403........................ Colonoscopy w/resection. 44392........................ Colonoscopy &
polypectomy.
44404........................ Colonoscopy w/injection. 44389........................ Colonoscopy with biopsy.
44405........................ Colonoscopy w/dilation.. 44390........................ Colonoscopy for foreign
body.
44406........................ Colonoscopy w/ultrasound 44394........................ Colonoscopy w/snare.
45330........................ Diagnostic sigmoidoscopy 45330........................ Diagnostic
sigmoidoscopy.
45331........................ Sigmoidoscopy and biopsy 45331........................ Sigmoidoscopy and
biopsy.
45332........................ Sigmoidoscopy w/fb 45332........................ Sigmoidoscopy w/fb
removal. removal.
45333........................ Sigmoidoscopy & 45333........................ Sigmoidoscopy &
polypectomy. polypectomy.
45334........................ Sigmoidoscopy for 45334........................ Sigmoidoscopy for
bleeding. bleeding.
45335........................ Sigmoidoscopy w/submuc 45335........................ Sigmoidoscopy w/submuc
inj. inj.
45337........................ Sigmoidoscopy & 45337........................ Sigmoidoscopy &
decompress. decompress.
45338........................ Sigmoidoscopy w/tumr 45338........................ Sigmoidoscopy w/tumr
remove. remove.
45340........................ Sig w/tndsc balloon 45340........................ Sig w/tndsc balloon
dilation. dilation.
45341........................ Sigmoidoscopy w/ 45341........................ Sigmoidoscopy w/
ultrasound. ultrasound.
45342........................ Sigmoidoscopy w/us guide 45342........................ Sigmoidoscopy w/us guide
bx. bx.
45346........................ Sigmoidoscopy w/ablation 45339........................ Sigmoidoscopy w/ablate
tumr.
45347........................ Sigmoidoscopy w/plcmt 45345........................ Sigmoidoscopy w/stent.
stent.
45349........................ Sigmoidoscopy w/ 45338........................ Sigmoidoscopy w/tumr
resection. remove.
45350........................ Sgmdsc w/band ligation.. 45334........................ Sigmoidoscopy for
bleeding.
45378........................ Diagnostic colonoscopy.. 45378........................ Diagnostic colonoscopy.
45379........................ Colonoscopy w/fb removal 45379........................ Colonoscopy w/fb
removal.
45380........................ Colonoscopy and biopsy.. 45380........................ Colonoscopy and biopsy.
45381........................ Colonoscopy submucous 45381........................ Colonoscopy submucous
njx. njx.
45382........................ Colonoscopy w/control 45382........................ Colonoscopy w/control
bleed. bleed.
45384........................ Colonoscopy w/lesion 45384........................ Colonoscopy w/lesion
removal. removal.
45385........................ Colonoscopy w/lesion 45385........................ Colonoscopy w/lesion
removal. removal.
45386........................ Colonoscopy w/balloon 45386........................ Colonoscopy w/balloon
dilat. dilat.
45388........................ Colonoscopy w/ablation.. 45383........................ Lesion removal
colonoscopy.
45389........................ Colonoscopy w/stent 45387........................ Colonoscopy w/stent.
plcmt.
45390........................ Colonoscopy w/resection. 45385........................ Colonoscopy w/lesion
removal.
45391........................ Colonoscopy w/endoscope 45391........................ Colonoscopy w/endoscope
us. us.
45392........................ Colonoscopy w/endoscopic 45392........................ Colonoscopy w/endoscopic
fnb. fnb.
45393........................ Colonoscopy w/ 45382........................ Colonoscopy w/control
decompression. bleed.
45398........................ Colonoscopy w/band 45382........................ Colonoscopy w/control
ligation. bleed.
46500........................ Injection into 46500........................ Injection into
hemorrhoid(s). hemorrhoid(s).
47135........................ Transplantation of liver 47135........................ Transplantation of
liver.
5039A........................ Njx px nfrosgrm &/ 50390........................ Drainage of kidney
urtrgrm. lesion.
5039B........................ Njx px nfrosgrm &/ 50394........................ Injection for kidney x-
urtrgrm. ray.
5039C........................ Plmt nephrostomy 50392........................ Insert kidney drain.
catheter.
5039D........................ Plmt nephroureteral 50393........................ Insert ureteral tube.
catheter.
5039M........................ Convert nephrostomy 50393........................ Insert ureteral tube.
catheter.
5039E........................ Exchange nephrostomy 50398........................ Change kidney tube.
cath.
5069G........................ Plmt ureteral stent prq. 50398........................ Change kidney tube.
5069H........................ Plmt ureteral stent prq. 50393........................ Insert ureteral tube.
5069I........................ Plmt ureteral stent prq. 50393........................ Insert ureteral tube.
5443A........................ Repair corporeal tear... 54406........................ Remove muti-comp penis
pros.
5443B........................ Replantation of penis... 53448........................ Remov/replc ur sphinctr
comp.
657XG........................ Impltj ntrstrml crnl rng 65426........................ Removal of eye lesion.
seg.
7208A........................ X-ray exam entire spi 1 72050........................ X-ray exam neck spine 4/
vw. 5vws.
7208B........................ X-ray exam entire spi 2/ 72052........................ X-ray exam neck spine 6/
3 vw. >vws.
7208C........................ X-ray exam entire spi 4/ 72052........................ X-ray exam neck spine 6/
5 vw. > vws.
7208D........................ X-ray exam entire spi 6/ 72052........................ X-ray exam neck spine 6/
> vw. > vws.
73560........................ X-ray exam of knee 1 or 73560........................ X-ray exam of knee 1 or
2. 2.
73562........................ X-ray exam of knee 3.... 73562........................ X-ray exam of knee 3.
73564........................ X-ray exam knee 4 or 73564........................ X-ray exam knee 4 or
more. more.
73565........................ X-ray exam of knees..... 73565........................ X-ray exam of knees.
73590........................ X-ray exam of lower leg. 73590........................ X-ray exam of lower leg.
73600........................ X-ray exam of ankle..... 73600........................ X-ray exam of ankle.
77402........................ Radiation treatment G6003........................ Radiation treatment
delivery. delivery.
77407........................ Radiation treatment G6007........................ Radiation treatment
delivery. delivery.
77412........................ Radiation treatment G6011........................ Radiation treatment
delivery. delivery.
77385........................ Ntsty modul rad tx dlvr G6015........................ Radiation tx delivery
smpl. imrt.

[[Page 41766]]

77386........................ Ntsty modul rad tx dlvr G6015........................ Radiation treatment
cplx. delivery.
77387........................ Guidance for radiaj tx 77014........................ Ct scan for therapy
dlvr. guide.
76948........................ Echo guide ova 76948........................ Echo guide ova
aspiration. aspiration.
7778A........................ Hdr rdncl skn surf 77785........................ Hdr brachytx 1 channel.
brachytx.
7778B........................ Hdr rdncl skn surf 77786........................ Hdr brachytx 2-12
brachytx. channel.
7778C........................ Hdr rdncl ntrstl/icav 77785........................ Hdr brachytx 1 channel.
brchtx.
7778D........................ Hdr rdncl ntrstl/icav 77786........................ Hdr brachytx 2-12
brchtx. channel.
7778E........................ Hdr rdncl ntrstl/icav 77787........................ Hdr brachytx over 12
brchtx. chan.
88346........................ Immunofluorescent study. 88346........................ Immunofluorescent study.
8835X........................ Immunofluor antb addl 88346........................ Immunofluorescent study.
stain.
88367........................ Insitu hybridization 88367........................ Insitu hybridization
auto. auto.
88368........................ Insitu hybridization 88368........................ Insitu hybridization
manual. manual.
91200........................ Liver elastography...... 91200........................ Liver elastography.
9254A........................ Caloric vestibular test 92540........................ Basic vestibular
with recording. evaluation.
9254B........................ Caloric vestibular test 92540........................ Basic vestibular
with recording. evaluation.
99497........................ Advncd care plan 30 min. 99214........................ Office/outpatient visit
est.
99498........................ Advncd care plan addl 30 99214........................ Office/outpatient visit
min. est.
----------------------------------------------------------------------------------------------------------------
Note: For any codes not included in Table 14, we are proposing to use the utilization crosswalk, when a
crosswalk exists, in order to calculate the malpractice risk factor for these services, as discussed in the
preamble text.

a. Lower GI Endoscopy Services
CPT revised the lower gastrointestinal endoscopy code set for CY
2015 following identification of some of the codes as potentially
misvalued and the affected specialty society's contention that this
code set did not allow for accurate reporting of services based upon
current medical practice. The RUC subsequently provided recommendations
to us for valuing these services. In the CY 2015 PFS final rule with
comment period, we delayed valuing the lower GI codes and indicated
that we would propose values for these codes in the CY 2016 proposed
rule, citing the new process for including proposed values for new,
revised and potentially misvalued codes in the proposed rule as one of
the reasons for the delay.
(1) Gastrointestinal (GI) Endoscopy (CPT Codes 43775, 44380-46607 and
HCPCS Codes G0104, G0105, and G0121)
In the CY 2014 PFS final rule with comment period, we indicated
that we used what we called an ``incremental difference methodology''
in valuing the upper GI codes for that year. We explained that the RUC
made extensive use of a methodology that uses the incremental
difference in codes to determine values for many of these services.
This methodology uses a base code or other comparable code and
considers what the difference should be between that code and another
code by comparing the differentials to those for other sets of similar
codes. As with the esophagoscopy subfamily, many of the procedures
described within the colonoscopy subfamily have identical counterparts
in the esophagogastroduodenoscopy (EGD) subfamily. For instance, the
base colonoscopy CPT code 45378 is described as ``Colonoscopy,
flexible; diagnostic, including collection of specimen(s) by brushing
or washing when performed, (separate procedure).'' The base EGD CPT
code 43235 is described as ``Esophagogastroduodenoscopy, flexible,
transoral; diagnostic, with collection of specimen(s) by brushing or
washing, when performed.'' In valuing other codes within both
subfamilies, the RUC frequently used the difference between these two
base codes as an increment for measuring the difference in work
involved in doing a similar procedure utilizing colonoscopy versus
utilizing EGD. For example, the EGD CPT code 43239 includes a biopsy in
addition to the base diagnostic EGD CPT code 43235. The RUC valued this
by adding the incremental difference in the base colonoscopy code over
the base EGD CPT code to the value it recommended for the esophagoscopy
biopsy, CPT code 43202. With some variations, the RUC used this
incremental difference methodology extensively in valuing subfamilies
of codes. We have made use of similar methodologies in establishing
work RVUs for codes in this family.
We agreed with several of the RUC recommendations for codes in this
family. Where we did not agree, we consistently applied the incremental
difference methodology. Table I7 reflects how we applied this
methodology and the values we are proposing. To calculate the base RVU
for the colonoscopy subfamily, we looked at the current intraservice
time for CPT code 45378, which is 30 minutes, and the current work RVU,
which is 3.69. The RUC recommended an intraservice time of 25 minutes
and 3.36 RVUs. We then compared that service to the base EGD CPT code
43235 for which the RUC recommended a work RVU of 2.26, giving an
increment between EGD and colonoscopy of 1.10 RVUs. We added that
increment to our proposed work RVU for CPT 43235 of 2.19 to arrive at
our proposed work RVU for the base colonoscopy CPT code 45378 of 3.29.
We use this value as the base code in the incremental methodology for
establishing the work value for the other base codes in the colonoscopy
subfamilies which were then used to value the other codes in that
subfamily.

Table 15--Application of the Incremental Difference Methodology
--------------------------------------------------------------------------------------------------------------------------------------------------------
Current Increment Calculated
HCPCS Descriptor WRVU RUC WRVU Base procedure Base RVU Increment value WRVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
44380........... Ileoscopy, through 1.05 0.97 Colonoscopy........... 3.29 Colonoscopy to -2.39 0.9
stoma; diagnostic, Ileoscopy.
including collection
of specimen(s) by
brushing or washing,
when performed.

[[Page 41767]]

44382........... Ileoscopy, through 1.27 1.27 Ileoscopy............. 0.9 Biopsy............... 0.3 1.2
stoma; with biopsy,
single or multiple.
44384........... Ileoscopy, through NA 3.11 Ileoscopy............. 0.9 Stent................ 1.98 2.88
stoma; with placement
of endoscopic stent
(includes pre- and
post-dilation and
guide wire passage,
when performed).
44385........... Endoscopic evaluation 1.82 1.3 Colonoscopy........... 3.29 Colonoscopy to endo. -2.06 1.23
of small intestinal eval.
pouch (eg, Kock
pouch, ileal
reservoir [S or J]);
diagnostic, including
collection of
specimen(s) by
brushing or washing,
when performed.
44386........... Endoscopic evaluation 2.12 1.6 Endo. Eval............ 1.23 Biopsy............... 0.3 1.53
of small intestinal
pouch (eg, Kock
pouch, ileal
reservoir [S or J]);
with biopsy, single
or multiple.
44388........... Colonoscopy through 2.82 2.82 Colonoscopy........... 3.29 Colonoscopy to -0.54 2.75
stoma; diagnostic, Colonoscopy through
including collection stoma.
of specimen(s) by
brushing or washing,
when performed
(separate procedure).
44389........... Colonoscopy through 3.13 3.12 Colonoscopy through 2.75 Biopsy............... 0.3 3.05
stoma; with biopsy, stoma.
single or multiple.
44390........... Colonoscopy through 3.82 3.82 Colonoscopy through 2.75 Foreign body......... 1.02 3.77
stoma; with removal stoma.
of foreign body.
44402........... Colonoscopy through 4.7 4.96 Colonoscopy through 2.75 Stent................ 1.98 4.73
stoma; with stoma.
endoscopic stent
placement (including
pre- and post-
dilation and
guidewire passage,
when performed).
44403........... Colonoscopy through NA 5.81 Colonoscopy through 2.75 Endoscopic mucosal 2.78 5.53
stoma; with stoma. resection.
endoscopic mucosal
resection.
44404........... Colonoscopy through NA 3.13 Colonoscopy through 2.75 Submucosal injection. 0.3 3.05
stoma; with directed stoma.
submucosal
injection(s), any
substance.
45330........... Sigmoidoscopy, 0.96 0.84 Colonoscopy........... 3.29 Colonoscopy to -2.52 0.77
flexible; diagnostic, Sigmoidoscopy.
including collection
of specimen(s) by
brushing or washing
when performed.
45331........... Sigmoidoscopy, 1.15 1.14 Sigmoidoscopy......... 0.77 Biopsy............... 0.3 1.07
flexible; with
biopsy, single or
multiple.
45332........... Sigmoidoscopy, 1.79 1.85 Sigmoidoscopy......... 0.77 Foreign body......... 1.02 1.79
flexible; with
removal of foreign
body.
45335........... Sigmoidoscopy, 1.46 1.15 Sigmoidoscopy......... 0.77 Submucosal injection. 0.3 1.07
flexible; with
directed submucosal
injection(s), any
substance.
45341........... Sigmoidoscopy, 2.6 2.43 Sigmoidoscopy......... 0.77 Endoscopic ultrasound 1.38 2.15
flexible; with
endoscopic ultrasound
examination.

[[Page 41768]]

45346........... Sigmoidoscopy, NA 2.97 Sigmoidoscopy......... 0.77 Ablation............. 2.07 2.84
flexible; with
ablation of tumor(s),
polyp(s), or other
lesion(s) (includes
pre- and post-
dilation and guide
wire passage, when
performed).
45347........... Sigmoidoscopy, NA 2.98 Sigmoidoscopy......... 0.77 Stent................ 1.98 2.75
flexible; with
placement of
endoscopic stent
(includes pre- and
post-dilation and
guide wire passage,
when performed).
45349........... Sigmoidoscopy, NA 3.83 Sigmoidoscopy......... 0.77 Endoscopic mucosal 2.78 3.55
flexible; with resection.
endoscopic mucosal
resection.
45378........... Colonoscopy, flexible; 3.69 3.36 Colonoscopy........... 3.29
diagnostic, including
collection of
specimen(s) by
brushing or washing,
when performed,
(separate procedure).
45379........... Colonoscopy, flexible; 4.68 4.37 Colonoscopy........... 3.29 Foreign body......... 1.02 4.31
with removal of
foreign body.
45380........... Colonoscopy, flexible, 4.43 3.66 Colonoscopy........... 3.29 Biopsy............... 0.3 3.59
proximal to splenic
flexure; with biopsy,
single or multiple.
45381........... Colonoscopy, flexible; 4.19 3.67 Colonoscopy........... 3.29 Submucosal injection. 0.3 3.59
with directed
submucosal
injection(s), any
substance.
45389........... Colonoscopy, flexible; NA 5.5 Colonoscopy........... 3.29 Stent................ 1.98 5.27
with endoscopic stent
placement (includes
pre- and post-
dilation and guide
wire passage, when
performed).
45390........... Colonoscopy, flexible; NA 6.35 Colonoscopy........... 3.29 Endoscopic mucosal 2.78 6.07
with endoscopic resection.
mucosal resection.
45391........... Colonoscopy, flexible; 5.09 4.95 Colonoscopy........... 3.29 Endoscopic ultrasound 1.38 4.67
with endoscopic
ultrasound
examination limited
to the rectum,
sigmoid, descending,
transverse, or
ascending colon and
cecum, and adjacent
structures.
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Laparoscopic Sleeve Gastrectomy (CPT Code 43775)
Prior to CY 2013, CPT code 43775 described a non-covered service.
For CY 2013, this service was covered as part of the bariatric surgery
National Coverage Determination (NCD) and has been contractor-priced
since 2013. We are now proposing to establish national pricing for CPT
code 43775. To establish a work RVU, we are crosswalking this code to
CPT code 37217 (Transcatheter placement of an intravascular stent(s),
intrathoracic common carotid artery or innominate artery by retrograde
treatment, via open ipsilateral cervical carotid artery exposure,
including angioplasty, when performed, and radiological supervision and
interpretation), due to their identical intraservice times, similar
total times, and similar levels of intensity. Therefore, we are
proposing a work RVU of 20.38 for CPT code 43775.
(3) Incomplete Colonoscopy (CPT codes 44388, 45378, G0105, and G0121)
Prior to CY 2015, according to CPT instruction, an incomplete
colonoscopy was defined as a colonoscopy that did not evaluate the
colon past the splenic flexure (the distal third of the colon). In
accordance with that definition, the Medicare Claims Processing Manual
(pub. 100-04, chapter 12, section 30.1.B., available at http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals-IOMs-Items) states that physicians should report an incomplete
colonoscopy with 45378 and append modifier -53, which is paid at the
same rate as a sigmoidoscopy.
In CY 2015, the CPT instruction changed the definition of an
incomplete colonoscopy to a colonoscopy that does not evaluate the
entire colon. The 2015 CPT Manual states, ``When performing a
diagnostic or screening endoscopic procedure on a patient who is
scheduled and prepared for a total colonoscopy, if the physician is
unable to advance the colonoscope to the

[[Page 41769]]

cecum or colon-small intestine anastomosis due to unforeseen
circumstances, report 45378 (colonoscopy) or 44388 (colonoscopy through
stoma) with modifier -53 and provide appropriate documentation.''
Given that the new definition of an incomplete colonoscopy also
includes colonoscopies where the colonoscope is advanced past the
splenic flexure but not to the cecum, we are proposing to establish new
values for the incomplete colonoscopies, reported with the -53
modifier. At present, we crosswalk the RVUs for the incomplete
colonoscopies from the values of the corresponding sigmoidoscopy. Given
that the new CPT instructions will reduce the number of reported
complete colonoscopies and increase the number of colonoscopies that
proceeded further toward completion reported with the -53 modifier, we
believe CPT code 45378 reported with the -53 modifier will now describe
a more resource-intensive group of services than were previously
reported. Therefore, we are proposing to develop RVUs for these codes
reported with the -53 modifier by using one-half the value of the
inputs for the corresponding codes reported without the -53 modifier.
In addition to this proposed change in input values, we are also
seeking comment on how to address the disparity of resource costs among
the broader range of services now described by the colonoscopy codes
billed with the -53 modifier. We believe that it may be appropriate for
practitioners to report the sigmoidoscopy CPT code 45330 under
circumstances when a beneficiary is scheduled and prepared for a total
colonoscopy (diagnostic colonoscopy, screening colonoscopy or
colonoscopy through stoma), but the practitioner is unable to advance
the colonoscope beyond the splenic flexure. We are seeking comment and
recommendations on that possibility, as well as more generally, the
typical resource costs of these incomplete colonoscopy services under
CPT's new definition. Finally, we are seeking information regarding the
number of colonoscopies that will be considered incomplete under CPT's
new definition relative to the old definition, as well as the number of
incomplete colonoscopies where the practitioner is unable to advance
the colonoscope beyond the splenicflexure. This information will help
us determine whether or not differential payment is required, and if it
is, how to make the appropriate utilization assumptions within our
ratesetting process.
(4) Malpractice (MP) Crosswalk
We examined the RUC's recommended MP crosswalk for this family of
codes. The MP crosswalks are used to identify the presumed mix of
specialties that furnish particular services until there is Medicare
claims data for the new codes. We direct the reader to section II.B.1.
of this proposed rule for further explanation regarding these
crosswalks. In reviewing the recommended MP crosswalks for CPT codes
43775, 44407, 44408, 46601, and 46607, we noted that the RUC-
recommended MP crosswalk codes are inconsistent with our analysis of
the specialties likely to furnish the service based on the description
of the services and our review of the RUC-recommended utilization
crosswalk. The inconsistency between the RUC's recommended MP and
utilization crosswalks is not altogether unusual. However when there
are discrepancies between the MP and utilization crosswalk
recommendations, they generally reflect the RUC's expectation that due
to changes in coding, there will be a different mix of specialties
reporting a new code than might be reflected in the claims data for the
code previously used to report that service. This often occurs when the
new coding structure for a particular family of services is either more
or less specific than the old set of codes. In most of these cases, we
could identify a rationale for why the RUC's recommended MP crosswalks
for these codes were likely to be more accurate than the RUC's
recommended utilization crosswalk. But in the case of these codes, the
reason for the discrepancies were neither apparent nor explained as
part of the recommendation. Since the specialty mix in the claims data
is used to determine the specialty mix for each HCPCS code for the
purposes of calculating MP RVUs, and that data will be used to set the
MP RVUs once it is available, we believe using a specialty mix derived
from the claims data of the predecessor codes is more likely to be
accurate than the RUC-recommended MP crosswalk as well as more likely
to result in stable MP RVUs for these services over several years.
Therefore, until claims data under the new set of codes is available,
we are proposing to use the specialty mix of the source code(s) in the
RUC-recommended utilization crosswalk in order to calculate the
malpractice risk factor for these services instead of the RUC-
recommended MP crosswalk. Once claims data are available, those data
will be incorporated into the calculation of MP RVUs for these services
under the MP RVU methodology.
b. Radiation Treatment and Related Image Guidance Services
For CY 2015, the CPT Editorial Panel revised the set of codes that
describe radiation treatment delivery services based in part on the CMS
identification of these services as potentially misvalued in CY 2012.
We identified these codes as potentially misvalued under a screen
called ``Services with Stand-Alone PE Procedure Time.'' We proposed
this screen following our discovery of significant discrepancies
between the RUC-recommended 60 minute procedure time assumptions for
intensity modulated radiation therapy (IMRT) and information available
to the public suggesting that the procedure typically took between 5
and 30 minutes per treatment.
The CPT Editorial Panel's revisions included the addition and
deletion of several codes and the development of new guidelines and
coding instructions. Four treatment delivery codes (77402, 77403,
77404, and 77406) were condensed into 77402 (Radiation Treatment
Delivery, Simple), three treatment delivery codes (77407, 77408, 77409)
were condensed into 77407 (Radiation treatment delivery, intermediate),
and four treatment codes (77412, 77413, 77414, 77416) were condensed
into 77412 (Radiation treatment delivery, complex). Intensity Modulated
Radiation Therapy (IMRT) treatment delivery, previously reported under
a single code, was split into two codes, 77385 (IMRT treatment
delivery, simple) and 77386 (IMRT treatment delivery, complex). The CPT
Editorial Panel also created a new image guidance code, 77387 (Guidance
for localization of target volume for delivery of treatment, includes
intrafraction tracking when performed) to replace 77014 (computed
tomography guidance for placement of radiation therapy fields), 77421
(stereoscopic X-ray guidance for localization of target volume for the
delivery of radiation therapy,) and 76950 (ultrasonic guidance for
placement of radiation therapy fields) when any of these services were
furnished in conjunction with radiation treatment delivery.
In response to stakeholder concerns regarding the magnitude of the
coding changes and in light of the process changes we adopted for
valuing new and revised codes, we did not implement interim final
values for the new codes and delayed implementing the new code set
until 2016. To address the valuation of the new code set through
proposed rulemaking, and

[[Page 41770]]

continue making payment based the previous valuations even though CPT
deleted the prior radiation treatment delivery codes for CY 2015, we
created G-codes that mimic the predecessor CPT codes (79 FR 67667).
We propose to establish values for the new codes based on RUC
recommendations, subject to standard CMS refinements that appear in
Table 15 in section II.B.4. of this proposed rule. We also note that
because the invoices used to price the capital equipment included ``on-
board imaging,'' the cost of that equipment is already reflected in the
price per minute associated with the capital equipment. Therefore, we
have not included it as a separate item in the proposed direct PE
inputs for these codes, even though it appeared as a separate item on
the PE worksheet included with the RUC recommendations for these codes.
The direct PE inputs for these codes are reflected in the proposed
direct PE input database available on the CMS Web site under the
supporting data files for the CY 2016 PFS proposed rule with comment
period at http://www.cms.gov/PhysicianFeeSched/. The RVUs that result
from the use of these proposed direct PE inputs (and work RVUs and work
time, as applicable) are displayed in Addendum B on the CMS Web site.
In addition to the refinements addressed above, there are three
additional issues for which we are seeking comment and/or making
specific proposals related to these services: image guidance, equipment
utilization rate assumptions for linear accelerators, and superficial
radiation treatment services.
(1) Image Guidance Services
Under the previous CPT coding structure, image guidance was
separately billable when furnished in conjunction with the radiation
treatment delivery services. The image guidance was reported using
different CPT codes, depending on which image guidance modality was
used. These codes were split into professional and/or technical
components that allowed practitioners to report a single component or
the global service. The professional component of each of these codes
included the work of the physician furnishing the image guidance. CPT
code 77014, used to report CT guidance, had a work RVU of 0.85; CPT
code 77421, used to report stereotactic guidance, had a work RVU of
0.39, and CPT code 76950, used to report ultrasonic guidance, had a
work RVU of 0.58. The technical component of these codes incorporated
the resource costs of the image guidance capital equipment (such as CT,
ultrasound, or stereotactic) and the clinical staff involved in
furnishing the image guidance associated with the radiation treatment.
When billed globally, the RVUs reflected the sum of the professional
and technical components. In the revised coding structure, one new
image guidance code is to be reported regardless of the modality used,
and in developing its recommended values, the RUC assumed that CT
guidance would be typical.
However, the 2013 Medicare claims data for separately reported
image guidance indicates that stereotactic guidance for radiation
treatment services was furnished more frequently than CT guidance. The
RUC has recommended a work RVU of 0.58 and associated work times of 3
pre-service minutes, 10 intraservice minutes, and 3 post-service
minutes for image guidance CPT code 77387. We reviewed this
recommendation considering the discrepancy between the modality the RUC
assumed to be typical in the vignette and the modality typically
reported in the Medicare claims data. Given that the recommended work
RVU for the new single code is similar to the work RVUs of the
predecessor codes, roughly prorated based on their distribution in
Medicare claims data, we agree with the RUC-recommended work RVU for
the service. However, the RUC also recommended an increase in overall
work time associated with image guidance consistent with the survey
data used to value the new services. If accurate, this increase in time
and maintenance of total work would suggest a decrease in the overall
intensity for image guidance relative to the current codes. Given this
implication, we are seeking comment as to the appropriate work time
associated with CPT code 77387.
Although 77421 (stereotactic guidance) and 76950 (ultrasonic
guidance) have been deleted, we note that CPT maintained CPT code 77014
(Computed tomography guidance for placement of radiation therapy
fields) and the RUC recommendation states that CPT did so based on
concerns that without this option, some practitioners might have no
valid CPT alternative than to use higher valued diagnostic CT codes
when they used this CT guidance. The RUC recommendation also includes a
statement that utilization of this code is expected to drop to
negligible levels by 2015, assuming that practitioners would use the
new codes that are not differentiated based on imaging modality. Once
all the new codes are implemented for Medicare, we anticipate that CPT
and/or the RUC will address the continued use of 77014 and, if it
continues to be part of the code set, provide recommendations as to the
appropriate values given changes in utilization.
Regarding the reporting of the new image guidance codes, CPT
guidance instructs that the technical portion of image guidance is now
bundled into the IMRT and Stereotactic Radiation Treatment delivery
codes, but it is not bundled into the simple, intermediate, and complex
radiation treatment delivery codes. CPT guidance states that the
technical component of the image guidance code can be reported with
codes 77402, 77407, and 77412 (simple, intermediate, and complex
radiation treatment) when furnished, which means that the technical
component of the image guidance code should not be reported with the
IMRT or Stereotactic Radiation Treatment delivery codes. The RUC
recommendation, however, incorporates the same capital cost of image
guidance equipment (a linear accelerator, or linac), for all these
radiation treatment delivery codes, including the codes that describe
IMRT and Stereotactic Radiation Treatment delivery services. The RUC
explains that the recommendations were done this way because the older
lower-dose external beam radiation machines are no longer manufactured
and the image guidance technology is integrated into the single kind of
linear accelerator used for all the radiation treatment services. In
reviewing the new code structure and the RUC recommendations, we assume
that the CPT editorial panel did not foresee that the RUC would
recommend that we develop PE RVUs for all the radiation treatment
delivery codes based on the assumption that the same capital equipment
is typically used in furnishing the entire range of external beam
radiation treatments. Because the RUC recommendations incorporate the
more extensive capital equipment in the lower dose treatment codes as
well, a portion of the resource costs of the technical portion of
imaging guidance are already allocated into the PE RVUs for all of the
treatment delivery codes, not just the IMRT and Stereotactic Radiation
Treatment delivery codes as CPT guidance would suggest.
In order to avoid incorporating the cost of this equipment into
both the treatment delivery codes (77402, 77407, and 77412) and the
technical component of the new imaging guidance code (77387-TC), we
considered valuing 77387 as a professional service only and not
creating the professional/technical component splits envisioned by CPT.
In the context of the budget neutral PFS, incorporating a duplicative

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direct input with a cost of more than six dollars per minute has
significant impacts on the PE RVUs for all other services. However, we
also noted that the RUC did not address this apparent contradiction in
its recommendation and not all of the recommended direct PE inputs for
the technical component of 77387 are capital equipment costs.
Therefore, we are proposing to allow for professional and technical
component billing for these services, as reflected in CPT guidance, and
we are proposing to use the RUC recommended direct PE inputs for these
services (refined as described in Table 15). However, we are also
seeking comment on the apparent contradiction between technical
component billing for image guidance in the context of the inclusion of
a single linac with integrated imaging guidance technology being
included for all external beam treatment codes.
(2) Equipment Utilization Rate for Linear Accelerators
The cost of the capital equipment is the primary determining factor
in the payment rates for these services. For each CPT code, the
equipment costs are estimated based on multiplying the assumed number
of minutes the equipment is used for that procedure by the per minute
cost of the particular equipment item. Under our PE methodology, we
currently use two default equipment usage assumptions in allocating
capital equipment costs to calculate PE RVUs. The first is that each
equipment item is only available to be used during what are assumed to
be regular business hours for a physician's office: 10 hours per day, 5
days per week (50 hours per week) and 50 weeks per year. The second
assumption is that the equipment is in use only 50 percent of the time
that it is available for use. The current default 50 percent
utilization rate assumption translates into 25 hours per week out of a
50-hour work week.
We have previously addressed the accuracy of these default
assumptions as they apply to particular equipment resources and
particular services. In the CY 2008 PFS proposed rule (72 FR 38132) we
discussed the 50 percent utilization assumption and acknowledged that
the default 50 percent usage assumption is unlikely to capture the
actual usage rates for all equipment. However, we stated that we did
not believe that we had strong empirical evidence to justify any
alternative approaches. We indicated that we would continue to monitor
the appropriateness of the equipment utilization assumption, and
evaluate whether changes should be proposed in light of the data
available.
Subsequently, a 2009 report on equipment utilization by MedPAC
included studies that suggested a higher utilization rate for
diagnostic imaging equipment costing more than $1 million. These
studies cited by MedPAC suggested that for Magnetic Resonance Imaging
equipment, a utilization rate of 92 percent on a 50-hour week would be
most accurate. Similarly, another MedPAC cited study suggested that for
Computed Tomography scanners, 45 hours was more accurate and that is
equivalent to a 90 percent utilization rate on a 50-hour work week. For
the CY 2010 PFS proposed rule, we proposed to increase the equipment
usage rate to 90 percent for all services containing equipment that
cost in excess of $1 million dollars. We stated that the studies cited
by MedPAC suggested that physicians and suppliers would not typically
make huge capital investments in equipment that would only be utilized
50 percent of the time (74 FR 33532).
In response to comments to that proposal, we finalized a 90 percent
utilization rate assumption for MRI and CT to be transitioned over a 4-
year period. Regarding the utilization assumptions for other equipment
priced over $1 million, we stated that we would continue to explore
data sources regarding use of the most accurate utilization rates
possible (74 FR 61755). Congress subsequently specified the utilization
rate to be assumed for MRI and CT by successive amendments to Section
1848(b)(4)(C) of the Act. Section 3135(a) of the Affordable Care Act
(Pub. L. 111-148) set the assumed utilization rate for expensive
diagnostic imaging equipment to 75 percent, effective for 2011 and
subsequent years. Section 635 of the American Taxpayer Relief Act
(ATRA) (Pub. L. 112-240) set the assumed equipment utilization rate to
90%, effective for 2014 and subsequent years. Both of these changes
were exempted from the budget neutrality requirements described in
section 1848(c)(2)(B)(ii)(II) of the Act.
We have also made other adjustments to the default assumptions
regarding the number of hours for which the equipment is available to
be used. For example, some equipment used in furnishing services to
Medicare beneficiaries is available to be used on a 24-hour/day, 7
days/per week basis. For these items, we develop the rate per minute by
amortizing the cost over the extended period of time the equipment is
in use.
Based on the RUC recommendations for the new codes that describe
radiation treatment services, we do not believe our default assumptions
regarding equipment usage are accurate for the capital equipment used
in radiation treatment services. As we noted above, the RUC
recommendations assume that the same type of linear accelerator is now
typically used to furnish all levels and types of external beam
radiation treatment services because the machines previously used to
furnish these services are no longer manufactured. In valuing the
previous code set and making procedure time assumptions, different
equipment items were assumed to be used to furnish the different levels
and types of radiation treatment. With the current RUC-recommended
inputs, we can then assume that the same equipment item is used to
furnish more services. If we assume the RUC recommendation to include
the same kind of capital equipment for all of these codes is accurate,
we believe that it is illogical to continue to assume that the
equipment is only used for 25 out of a possible 50 hours per week. In
order to estimate the difference between the previous number of minutes
the linear accelerator was assumed to be in use under the previous
valuation and the number of minutes now being recommended, we applied
the change in assumptions to the services reported in the most recent
year of Medicare claims data. Under the assumptions reflected in the
previous direct PE inputs, the kind of linear accelerator used for IMRT
made up a total of 44.8 million out of 65 million minutes of external
beam treatments furnished to Medicare beneficiaries. Under the new code
set, however, a single kind of linear accelerator would be used for all
of the 65 million minutes furnished to Medicare beneficiaries. This
represents a 45 percent increase in the aggregate amount of time that
this kind of linac is in use. Of course, the utilization rate that
corresponds with that increase in minutes is not necessarily precise
since the current utilization rate only reflects the default assumption
and is not itself rooted in empirical data. Additionally, in some
cases, individual practices that already use linear accelerators for
IMRT may have replaced the now-obsolete capital equipment with new,
additional linear accelerators instead of increasing the use of capital
equipment already owned. However, we do not believe that the latter
scenario is likely to be common in cases where the linear accelerators
had previously been used only 25 hours per week.
Therefore, we are proposing to adjust the equipment utilization
rate

[[Page 41772]]

assumption for the linear accelerator to account for the significant
increase in usage. Instead of applying our default 50 percent
assumption, we are proposing to use a 70 percent assumption based on
the recognition that the item is now being typically used in a
significantly broader range of services, and that would increase its
overall usage in comparison to the previous assumption. We note that we
developed the 70 percent rate based on a rough reconciliation between
the number of minutes the equipment is being used according to the new
recommendations versus the current number of minutes based on an
analysis of claims data. We continue to seek evidence to ensure that
the usage assumptions, both the utilization rate and number of
available hours, used to calculate equipment costs are as accurate as
possible. We believe that comparing the changes in direct PE input
recommendations and using the Medicare claims data indicates that the
utilization assumption to 70 percent is more accurate than the default
utilization assumption of 50 percent. However, we have reviewed other
information that suggests this utilization rate may be higher than 70
percent and that the number of available hours per week is greater than
50.
For example, as part of the 2014 RUC recommendations for the
Radiation Treatment Delivery codes, the RUC submitted a 2011 staffing
survey conducted by the American Society for Radiology Technicians
(ASRT). Using the 2014 version of the same study, we noted that there
are an average of 2.3 linacs per radiation treatment facility and 52.7
patients per day treated per radiation treatment facility. These data
suggest that an average of 22.9 patients is treated on each linac per
day. Using an average of the RUC-recommended procedure times for CPT
codes 77385, 77386, 77402, 77407, and 77412 weighted by the annual
volume of procedures derived from Medicare claims data yielded a total
of 670.39 minutes or 11.2 hours that a single linac is in use per day.
This is in contrast to both the number of hours of use reflected in our
default assumptions (5 of the 10 available business hours per day) and
in our proposed revision to the equipment utilization rate assumption
(7 hours out of 10 available business hours per day).
For advanced diagnostic imaging services, we finalized a policy to
change the equipment utilization assumption only by 10 percent per
year, in response to suggestions from commenters. Because capital
equipment costs are amortized over several years, we believe it is
reasonable to transition changes to the default assumptions for
particular items over several years. We note that the change from one
kind of capital equipment to another is likely to occur over a number
of years, roughly equivalent to the useful life of particular items as
they become obsolete. In the case of most of these items, we have
assumed a 7-year useful life, and therefore, we assume that the
transition to use of the single kind of capital equipment would likely
take place over 7 years as individual pieces of equipment age into
obsolescence. However, in the case of this transition in capital
equipment, we have reasons to believe that the transition to the new
capital equipment has already occurred. First, we note that the
specialty societies concluded that the single linear accelerator was
typical for these services at the time that the current recommendations
were developed in 2013. Therefore, we believe it is logical to assume
that, at a minimum, the first several years of the transition to new
capital equipment had already taken place by 2013. This would account
for the linear accelerator being typically used at that time. This
would not be surprising, given that prior to the 2013 review by the
RUC, the codes describing the non-IMRT external beam radiation
treatments had last been reviewed in 2002. Second, because we are
proposing to use the 2013 recommendations for 2016 PFS payment rates,
we believe it would be reasonable to assume that in the years between
2013 and 2016, the majority of the rest of the obsolete machines would
have been replaced with the single linear accelerator.
Nonetheless, we recognize that there would be value in following
precedent to transition changes in utilization assumptions over several
years.
Given the fact that it is likely that the transition to the linear
accelerator began prior to the 2013 revaluation of the radiation
treatment delivery codes by CPT and that the useful life of the newest
generation of linear accelerator is 7 years, we believe a 2-year
transition to the 70 percent utilization rate assumption would account
for any remaining time to transition to the new equipment. Therefore,
in developing PE RVUs for these services, we are proposing to use a 60
percent utilization rate assumption for CY 2016 and a 70 percent
utilization rate assumption for CY 2017. The PE RVUs displayed in
addendum B on the CMS Web site were calculated using the proposed 60
percent equipment utilization rate for the linac as displayed in the CY
2016 direct PE input database.
Additionally, we continue to seek empirical data on the capital
equipment costs, including equipment utilization rates, for the linac
and other capital-intensive machines, and seek comment on how to most
accurately address issues surrounding those costs within the PE
methodology.
(3) Superficial Radiation Treatment Delivery
In the CY 2015 PFS final rule with comment period, we noted that
changes to the CPT prefatory language modify the services that are
appropriately billed with CPT code 77401 (radiation treatment delivery,
superficial and/or ortho voltage, per day). The changes effectively
meant that many other procedures supporting superficial radiation
therapy were bundled with 77401. The RUC, however, did not review the
inputs for superficial radiation therapy procedures, and therefore, did
not assess whether changes in its valuation were appropriate in light
of this bundling. Some stakeholders suggested that the change in the
prefatory language precluded them from billing for codes that were
previously frequently billed in addition to this code and expressed
concern that as a result there would be significant reduction in their
overall payments. In the CY 2015 PFS final rule with comment period, we
requested information on whether the new radiation therapy code set
combined with modifications in prefatory text allowed for appropriate
reporting of the services associated with superficial radiation and
whether the payment continued to reflect the relative resources
required to furnish superficial radiation therapy services.
In response to our request, we received a recommendation from a
stakeholder to make adjustments to both the physician work and PE
components for code 77401. The stakeholder suggested that since crucial
aspects of the service, such as treatment planning and device design
and construction, were not currently reflected in 77401, and
practitioners were precluded from reporting these activities
separately, that physician work should be included for CPT code 77401.
Additionally, the stakeholders suggested that the current inputs used
to value the code are not accurate because the inputs include zero
physician work and minutes for a radiation therapist to provide the
service directly to the patient. The stakeholders suggested,
alternatively, that physicians, not radiation therapists, typically
provide superficial radiation services directly. Therefore, we are
seeking recommendations from other stakeholders, including the RUC,
regarding whether or not it would be

[[Page 41773]]

appropriate to add physician work for this service and remove minutes
for the radiation therapists, even though physician work is not
included in other radiation treatment services.
The stakeholder also suggested that we amend the direct PE inputs
by including nurse time and updating the price of the capital equipment
used in furnishing the service. We believe it would be most appropriate
to address the clinical labor assigned to the code in the context of
the information regarding the physician work that might be associated
with the service. Therefore, we seek information on the possible
inclusion of nurse time for this service as part of the comments and/or
recommendations regarding physician work for the service. However, we
reviewed the submitted invoices for the request to update the capital
equipment for the service. We are proposing to update the equipment
item ER045 ``orthovoltage radiotherapy system'' by renaming it ``SRT-
100 superficial radiation therapy system'' and updating the price from
$140,000 to $216,000, on the basis of the submitted invoices. The PE
RVUs displayed in Addendum B on the CMS Web site were calculated with
this proposed modification that is displayed in the CY 2016 direct PE
input database.
c. Advance Care Planning Services
For CY 2015, the CPT Editorial Panel created two new codes
describing advance care planning (ACP) services: CPT code 99497
(Advance care planning including the explanation and discussion of
advance directives such as standard forms (with completion of such
forms, when performed), by the physician or other qualified health
professional; first 30 minutes, face-to-face with the patient, family
member(s) and/or surrogate); and an add-on CPT code 99498 (Advance care
planning including the explanation and discussion of advance directives
such as standard forms (with completion of such forms, when performed),
by the physician or other qualified health professional; each
additional 30 minutes (List separately in addition to code for primary
procedure)). In the CY 2015 PFS final rule with comment period (79 FR
67670-71), we assigned a PFS interim final status indicator of ``I''
(Not valid for Medicare purposes. Medicare uses another code for the
reporting and payment of these services) to CPT codes 99497 and 99498
for CY 2015. We said that we would consider whether to pay for CPT
codes 99497 and 99498 after we had the opportunity to go through notice
and comment rulemaking.
We received many public comments to the final rule recommending
that we recognize these two CPT codes and make separate payment for ACP
services, in view of the time required to furnish the services and
their importance for the quality of care and treatment of the patient.
For CY 2016, we are proposing to assign CPT codes 99497 and 99498 PFS
status indicator ``A,'' which is defined as: ``Active code. These codes
are separately payable under the PFS. There will be RVUs for codes with
this status.'' The presence of an ``A'' indicator does not mean that
Medicare has made a national coverage determination regarding the
service. Contractors remain responsible for local coverage decisions in
the absence of a national Medicare policy. We are proposing to adopt
the RUC-recommended values (work RVUs, time, and direct PE inputs) for
CPT codes 99497 and 99498 beginning in CY 2016 and will consider all
public comments that we receive on this proposal.
Physicians' services are covered and paid by Medicare in accordance
with section 1862(a)(1)(A) of the Act. Therefore, CPT code 99497 (and
CPT code 99498 when applicable) should be reported when the described
service is reasonable and necessary for the diagnosis or treatment of
illness or injury. For example, this could occur in conjunction with
the management or treatment of a patient's current condition, such as a
68 year old male with heart failure and diabetes on multiple
medications seen by his physician for the evaluation and management of
these two diseases, including adjusting medications as appropriate. In
addition to discussing the patient's short-term treatment options, the
patient expresses interest in discussing long-term treatment options
and planning, such as the possibility of a heart transplant if his
congestive heart failure worsens and advance care planning including
the patient's desire for care and treatment if he suffers a health
event that adversely affects his decision-making capacity. In this case
the physician would report a standard E/M code for the E/M service and
one or both of the ACP codes depending upon the duration of the ACP
service. However, the ACP service as described in this example would
not necessarily have to occur on the same day as the E/M service.
We seek comment on this proposal, including whether payment is
needed and what type of incentives this proposal creates. In addition,
we seek comment on whether payment for advance care planning is
appropriate in other circumstances such as an optional element, at the
beneficiary's discretion, of the annual wellness visit (AWV) under
section 1861(hhh)(2)(G) of the Act.
d. Proposed Valuation of Other Codes for CY 2016
(1) Excision of Nail Bed (CPT Code 11750)
The RUC's review of 10-day global services identified 18 services
currently valued with greater than 1.5 office visits and 2012 Medicare
utilization data over 1,000, including CPT code 11750. As a result, the
RUC requested this service be surveyed for work and reviewed for CY
2016.
The RUC recommended a work RVU of 1.99 for CPT code 11750, despite
a decrease in the associated post-operative visits. We believe the
recommendation for this service overstates the work involved in
performing this procedure specifically given the decrease in post-
operative visits. Due to similarity in service and time, we believe a
direct crosswalk of the work RVUs for CPT code 10140 (Drainage of blood
or fluid accumulation), which is also a 10 day global service with one
post-operative visit, to CPT code 11750 more accurately reflects the
time and intensity of furnishing the service. Therefore, for CY 2016 we
are proposing a work RVU of 1.58 for CPT code 11750.
(2) Bone Biopsy Excisional (CPT Code 20240)
In the same review of 10-day global services, the RUC identified
CPT code 20240 as potentially misvalued. As a result, the RUC requested
this service be surveyed and reviewed for CY 2016. Subsequent to this
identification, the RUC also requested and we approved a global period
change from a 10-day to a 0-day global period for this procedure. Based
on the survey data, the RUC recommended a decrease in the intraservice
time from 39 to 30 minutes, removal of two postoperative visits (one
99238 and one 99212), and an increase in the work RVUs for CPT code
20240 from 3.28 to 3.73. We do not believe this recommendation
accurately reflects the work involved in this procedure, especially
given the decrease in intraservice time and post-operative visits.
Therefore, for CY 2016, we are proposing a work RVU of 2.61 for CPT
code 20240 based on the reductions in time for the service.

[[Page 41774]]

(3) Endobronchial Ultrasound (CPT Codes 31622, 3160A, 3160B, 31625,
31626, 31628, 31629, 3160C, 31632 and 31633)
For CY 2016, the CPT Editorial Panel deleted one code, CPT 31620
(Ultrasound of lung airways using an endoscope), and created three new
codes, CPT 3160A-3160C, to describe bronchoscopic procedures that are
inherently performed with endobronchial ultrasound (EBUS).
In their review of the newly revised EBUS family, the RUC
recommended a change in the work RVU for CPT code 31629 from 4.09 to
4.00. The RUC also recommended maintaining the current work RVUs for
CPT codes 31622, 31625, 31626, 31628, 31632 and 31633. We are proposing
to use those values for CY 2016.
For the newly created codes, the RUC recommended a work RVU of 5.00
for CPT code 3160A, 5.50 for CPT code 3160B and 1.70 for CPT code
3160C. We believe the recommended work RVUs for these services
overstate the work involved in furnishing the procedures. In order to
develop proposed work RVUs for CPT code 3160A, we compared the service
described by the new code to deleted CPT codes 31620 and 31629, because
this new code describes a service that combines services described by
31620 and 31629. Specifically, we took the sum of the current work RVU
of CPT code 31629 (WRVU=4.09) and the CY 2015 work RVU of CPT code
31620 (WRVU=1.40) and multiplied it by the quotient of CPT code 3160A's
RUC-recommended intraservice time (INTRA=60 min) and the sum of CPT
codes 31620 and 31629's current and CY 2015 intraservice times
(INTRA=70 min), respectively. This resulted in a work RVU of 4.71 and
we are proposing that value. To value CPT code 3160B, we used the RUC-
recommended increment of 0.5 work RVU between this service and CPT code
3160A to calculate for CPT code 3160B our proposed work RVUs of 5.21.
Lastly, because the service described by new CPT code 3160C is very
similar to deleted CPT code 31620, we believe a direct crosswalk of the
previous values for 31620 accurately reflects the time and intensity of
furnishing the service described by 3160C. Therefore, we are proposing
a work RVUs of 1.40 for CPT code 3160C.
(4) Laparoscopic Lymphadenectomy (CPT Codes 38570, 38571 and 38572)
The RUC identified three laparoscopic lymphadenectomy codes as
potentially misvalued: CPT code 38570 (Laparoscopy, surgical; with
retroperitoneal lymph node sampling (biopsy), single or multiple); CPT
code 38571 (Laparoscopy, surgical; with retroperitoneal lymph node
sampling (biopsy), single or multiple with bilateral total pelvic
lymphadenectomy); and CPT code 38572 (Laparoscopy, surgical; with
retroperitoneal lymph node sampling (biopsy), single or multiple with
bilateral total pelvic lymphadenectomy and periaortic lymph node
sampling (biopsy), single or multiple). Accordingly, the specialty
society resurveyed these 10-day global codes, and the survey results
indicated decreases in intraservice and total work times. After
reviewing the survey responses, the RUC recommended that CMS maintain
the current work RVU for CPT code 38570 of 9.34; reduce the work RVU
for CPT code 38571 from 14.76 to 12.00; and reduce the work RVU for CPT
code 38572 from 16.94 to 15.60. We propose to accept the RUC
recommendations for CPT codes 38571 and 38572, as the RUC is
recommending reductions in the work RVUs that correspond with marked
decreases in intraservice time and decreases in total time. However, we
do not agree with the RUC's recommendation to maintain the current work
RVU for CPT code 38570 in spite of similar changes in intraservice and
total times as were shown in the RUC recommendations for CPT codes
38571 and 38572. Therefore, we propose to reduce the work RVU for CPT
code 38570 to 8.49, which reflects the ratio of the reduction in total
time for this code and would maintain rank order among the three codes.
(5) Mediastinoscopy With Biopsy (CPT Codes 3940A and 3940B)
The RUC identified CPT code 39400 (Mediastinoscopy, including
biopsy(ies) when performed) as a potentially misvalued code due to an
unusually high preservice time and Medicare utilization over 10,000. In
reviewing the code's history, it became apparent that the code has been
used to report two distinct procedural variations although the code was
valued using a vignette for only one of them. As a result, CPT code
39400 is being deleted and replaced with CPT codes 3940A and 3940B to
describe each of the two mediastinoscopy procedures.
We are proposing to accept the RUC-recommended work RVU of 5.44 for
code 3940A. We agree with the RUC that the crosswalk from CPT code
52235 (Cystourethroscopy, with fulguration) appropriately estimates the
overall work for CPT code 3940A. For CPT code 3940B, we disagree with
the RUC recommended work RVU of 7.50. We believe that the work value
for CPT code 3940A establishes an accurate baseline for this family of
codes, so we are scaling the work RVU of CPT code 3940B in accordance
with the change in the intraservice times between CPT codes 3940A and
3940B. Applying this ratio in the intraservice time to the work value
of CPT code 3940A yields a total work RVU of 7.25 for CPT code 3940B.
We also note that the RUC recommendation for CPT code 3940A represents
a decrease in value by 0.64 work RVUs, which is roughly proportionate
to the reduction from a full hospital discharge visit (99238) to a half
discharge visit assumed to be typical in the post-operative period. The
RUC recommendation for CPT code 3940B had the same reduction in the
post-operative work without a corresponding decrease in its recommended
work RVU. In order to reflect the reduction in post-operative work and
to maintain relativity between the two codes in the family, we are
proposing 7.25 as the work RVU for CPT code 3940B.
(6) Hemorrhoid(s) Injection (CPT Code 46500)
The RUC also identified CPT code 46500 (Injection of sclerosing
solution, hemorrhoids) as potentially misvalued, and the specialty
society resurveyed this 10-day global code. The survey showed a
significant decrease in the reported intraservice and total work times.
After reviewing the survey responses, the RUC recommended that CMS
should maintain the current work RVU of 1.69 in spite of these drops in
intraservice and total times. We propose to instead reduce the work RVU
to 1.42, which reduces the work RVU by the same ratio as the reduction
in total time.
We are also proposing to refine the recommended PE inputs by
removing the inputs associated with cleaning the scope. As recommended
by the RUC, we are proposing to include a scope as a direct PE input
that is disposable, and therefore, does not require cleaning.
(7) Liver Allotransplantation (CPT Code 47135)
The RUC also identified CPT code 47135 (Liver allotransplantation;
orthotopic, partial or whole, from cadaver or living donor, any age) as
potentially misvalued, and the specialty society resurveyed this 90-day
global code. The survey showed a significant decrease in reported
intraservice work time, but a significant increase in total work time
(the number of post-operative visits significantly declined while the
level of visits increased). After reviewing the survey responses, the

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RUC recommended an increase in the work RVU from 83.64 to 91.78, which
is the median of the survey, as well as the exact value for CPT code
33935 (Heart-lung transplant with recipient cardiectomy-pneumonectomy).
However, we do not believe this crosswalk is the most accurate from
among the group of transplant codes. CPT code 32854 (Lung transplant,
double (bilateral sequential or en bloc); with cardiopulmonary bypass)
has intraservice and total times that are closer to those the RUC
recommended for CPT code 47135, and CPT code 32854 has a work RVU of
90.00 which is the 25th percentile of the survey for CPT code 47135.
Therefore, we propose to increase the work RVU of CPT code 47135 to
90.00.
(8) Genitourinary Catheter Procedures (CPT Codes 5039A, 5039B, 5039C,
5039D, 5039M, 5039E, 5069G, 5069H, 5069I)
For CY 2016, the CPT Editorial Panel is deleting six codes (50392,
50393, 50394, 50398, 74475, and 74480) that were commonly reported
together, and are creating 12 new codes both to describe these
genitourinary catheter procedures more accurately and to bundle
inherent imaging services. Three of these codes (506XF, 507XK, and
507XL) were referred back to CPT to be resurveyed as add-on codes. The
other nine codes were reviewed at the January 2015 RUC meeting and
assigned recommended work RVUs and direct PE inputs.
We are proposing to use the RUC-recommended work RVU of 3.15 for
CPT code 5039A. We agree that this is an appropriate value, and that
the code should be used as a basis for establishing relativity with the
rest of the family. As a result, we began by making comparisons between
the service times of CPT code 5039A and the other codes in the family
in order to determine the appropriate proposed work value of each
procedure.
For CPT code 5039B, we disagree with the RUC recommended work RVU
of 1.42, and we are instead proposing a work RVU of 1.10, based on
three separate data points. First, the RUC summary of recommendations
stated that CPT code 5039B describes work previously described by a
combination of CPT codes 50394 and 74425. These two codes have work
RVUs of 0.76 and 0.36, respectively, which sum together to 1.12.
Second, we noted that the work of CPT code 49460 (Mechanical removal of
obstructive material from gastrostomy) is similar, with the same
intraservice time of 15 minutes and same total time of 55 minutes but a
work RVU of 0.96. Finally, we observed that the minimum survey result
had a work RVU of 1.10, and we believe this value appropriately
reflects the total work for the service. Accordingly, we are proposing
1.10 as the work RVU for CPT code 5039B.
We employed a similar methodology to develop a proposed work RVU of
4.25 for CPT code 5039C. The three previously established codes are
being combined in CPT code 5039C; these had respective work values of
3.37 (CPT code 50392), 0.54 (CPT code 74475), and 0.36 (CPT code
74425); together these sum to 4.27 work RVUs. We also looked at valuing
CPT code 5039C based on relativity with other codes in the family. The
ratio of the intraservice time of 35 minutes for CPT code 5039A and the
intraservice time of 48 minutes for CPT code 5039C; applied to the work
RVU of base code 5039A (3.15) results in a potential work RVU of 4.32.
The total time compared to CPT code 5039A also went from 91 minutes to
107 minutes and this ratio applied to the base work RVU results in a
work RVU of 3.70. We utilized these data to inform our choice of an
appropriate crosswalk. We believe CPT code 31660 (Bronchoscopy, rigid
or flexible, including fluoroscopic guidance) is an appropriate
reference crosswalk for CPT code 5039C. CPT code 31660 has an
intraservice time of 50 minutes, total time of 105 minutes, and a work
RVU of 4.25. Therefore, we propose to establish the work RVU for CPT
code 5039C at the crosswalked value of 4.25 work RVUs.
According to the RUC recommendations, CPT codes 5039C and 5039D are
very similar procedures, with CPT code 5039D making use of a
nephroureteral catheter instead of a nephrostomy catheter. The RUC
valued the added difficulty of CPT code 5039D at 1.05 work RVUs
compared to code CPT code 5039C. We are maintaining the relative
difference in work between these two codes by proposing a value of 5.30
for CPT code 5039D. (This is the work RVU of 4.25 for CPT code 5039C
plus 1.05 RVUs.) Additionally, we are using CPT code 57155 (Insertion
of uterine tandem and/or vaginal ovoids for clinical brachytherapy) as
our reference crosswalk. CPT code 57155 has a work RVU of 5.40 and an
identical intraservice time of 60 minutes, but it also has fourteen
additional minutes of total time, 133 minutes compared to 119 minutes
for CPT code 5039D, which supports the difference of 0.10 RVUs. For
these reasons, we are proposing the value of CPT code 5039D at 5.30
work RVUs.
As with the other genitourinary codes, we developed the proposed
work value of CPT code 5039M in order to preserve relativity within the
family. CPT code 5039M has 15 fewer minutes of intraservice time
compared to CPT code 5039D (45 minutes compared to 60 minutes). This is
a ratio of 0.75, applied to the based work RVU of CPT code 5039D (5.30)
resulted in a potential work RVU of 3.98. CPT code 5039C was another
close match within the family, with 3 more minutes of intraservice time
compared to 5039M, 48 minutes of intraservice time instead of 45
minutes. This ratio (0.94) applied to the base work RVU of CPT code
5039C (4.25) also resulted in a potential work RVU of 3.98. Based on
this information, we identified CPT code 31634 (Bronchoscopy, rigid or
flexible, with balloon occlusion) as an appropriate crosswalk, and
propose a work RVU of 4.00 for CPT code 5039M. The two codes share an
identical intraservice time of 45 minutes, though the latter possesses
a lower total time of 90 minutes.
For CPT code 5039E, we considered how the code and work RVU would
fit within the family in comparison to our proposed values for CPT
codes 5039A and 5039C. CPT code 5039A serves as the base code for this
group; it has 35 minutes of intraservice time in comparison to 20
minutes for CPT code 5039E. This intraservice time ratio of 0.57
resulted in a potential work RVU of 1.80 for CPT code 5039E when
applied to the work RVU of CPT code 5039A (3.15). Similarly, CPT code
5039C is the most clinically similar procedure to CPT code 5039E. CPT
code 5039C has 48 minutes of intraservice time compared to 20 minutes
of intraservice time for CPT code 5039E. This ratio of 0.42 applied to
the base work RVU of CPT code 5039C (4.25) results in a potential work
RVU of 1.77. We also made use of two crosswalks to help determine a
proposed value for CPT code 5039E. CPT code 64416 (Injection,
anesthetic agent; brachial plexus) also includes 20 minutes of
intraservice time and has a work RVU of 1.81. CPT code 36569 (Insertion
of peripherally inserted central venous catheter) has the same
intraservice and total time as CPT code 5039E, with a work RVU of 1.82.
Accordingly, we are crosswalking the work RVU for CPT code 5039E to CPT
code 36569 and proposing a work RVU of 1.82 for CY 2016.
The remaining three codes all utilize ureteral stents and form
their own small subfamily within the larger group of genitourinary
catheter procedures. For CPT code 5069G, we are proposing a

[[Page 41776]]

work RVU of 4.21, which is the 25th percentile result from the survey
information. We believe that the 25th percentile provides a more
accurate value for CPT code 5069G based on the work involved in the
procedure and within the context of other codes in the family. We are
also referencing CPT code 31648 (Bronchoscopy, rigid or flexible, with
removal of bronchial valve), which shares 45 minutes of intraservice
time and has a work RVU of 4.20, as an appropriate crosswalk for CPT
code 5069G.
For CPT code 5069H, we compared its intraservice time to the code
within the family that had the most similar duration, CPT code 5039D.
This code has 60 minutes of intraservice time compared to 62 minutes
for CPT code 5069H. This is a ratio of 1.03 applied to the base work
RVU of CPT code 5039D (5.30) resulted in a potential work RVU of 5.48.
We also looked to crosswalks with similar numbers, in particular CPT
code 50382 (Removal and replacement of internally dwelling ureteral
stent). This code has 60 minutes of intraservice time, 125 minutes of
total time, and a work RVU of 5.50. For these reasons, we are
crosswalking CPT code 5069H to CPT code 50382 and proposing a work RVU
of 5.50.
Finally, we developed the proposed value for CPT code 5069I using
three related methods. CPT codes 5069H and 5069I describe very similar
procedures, with 5069I adding the use of a nephrostomy tube. The RUC
addressed the additional difficulty of this procedure by recommending
1.55 more work RVUs for CPT code 5069I than for CPT code 5069H. Adding
the 1.55 work RVUs to the proposed work RVU for CPT code 5069H (5.50)
would produce a work RVU of 7.05 for CPT code 5069I. We also looked at
the ratio of intraservice times for CPT code 5069I (75 minutes) and the
base code in the subfamily, CPT code 5069G (45 minutes). The
intraservice time ratio between these two codes is 1.67 when applied to
the base work RVU of CPT code 5069G (4.21) resulted in a potential work
RVU of 7.02. We also identified an appropriate crosswalk reference in
CPT code 36481 (Percutaneous portal vein catheterization by any method)
which shares the same intraservice time as CPT code 5069I and has a
work RVU of 6.98. Accordingly, to maintain relativity among this
subfamily of codes, we are proposing a work RVU of 7.05 for CPT code
5069I based on an incremental increase of 1.55 RVUs from CPT code
5069H.
In reviewing the direct PE inputs for this family of codes, we
refined a series of the RUC- recommended inputs in order to maintain
relativity with current standards. All of the following refinements
refer to the non-facility setting for this family of codes. Under the
clinical labor inputs, we are proposing to remove the RN/LPN/MTA
(L037D) (intraservice time for assisting physician in performing
procedure) for CPT codes 5039B and 5039E. This amounts to 15 minutes
for CPT code 5039B and 20 minutes for CPT code 5039E. Moderate sedation
is not inherent in these procedures and, therefore, we do not believe
that this clinical labor task would typically be completed in the
course of this procedure. We are also reducing the RadTech (L041B)
intraservice time for acquiring images from 47 minutes to 46 minutes
for CPT code 5069H. This procedure contains 62 minutes of intraservice
time, with clinical labor assigned for acquiring images (75 percent)
and a circulator (25 percent). The exact time for these clinical labor
tasks multiplies out to 46.5 minutes and 15.5 minutes, respectively.
The RUC recommendation for CPT code 5069H rounded both of these values
upwards, assigning 47 minutes for acquiring images and 16 minutes for
the circulator, which together sum to 63 minutes. We are reducing the
clinical labor time for acquiring images to 46 minutes to preserve the
62 minutes of total intraservice time for CPT code 5069H.
During the post-service portion of the clinical labor service
period, we are proposing to change the labor type for the ``patient
monitoring following service/check tubes, monitors, drains (not related
to moderate sedation)'' input. There are 45 minutes of clinical labor
time assigned under this category to CPT codes 5039A, 5039C, 5039D,
5039M, 5069G, 5069H, and 5069I. Although we agree that the 45 minutes
are appropriate for these procedures as part of moderate sedation, we
are changing the clinical labor type from the recommended RN (L051A) to
RN/LPN/MTA (L037D) to reflect the staff that will typically be doing
the monitoring for these procedures. Even though the CPT Editorial
Committee's description of post-service work for CPT code 5039E
includes a recovery period for sedation, we recognize that according to
the recommendation, CPT codes 5039B and 5039E do not use moderate
sedation, so we did not propose to include moderate sedation inputs for
these codes.
The RUC recommendation for CPT code 5039D includes a nephroureteral
catheter as a new supply input with an included invoice. However, in
the RUC summary of recommendations for this code, there is no mention
of a nephroureteral catheter in the intraservice work description. CPT
code 5039D does mention the use of a nephroureteral stent in this
description, but there is no request for a nephroureteral stent supply
item on the PE worksheet for this code. We are therefore seeking
clarification from stakeholders regarding the use of the nephroureteral
catheter for CPT code 5039D. We have not proposed to add the
nephroureteral catheter as a supply item for CPT code 5039D pending
this information. We are also requesting a clarification to the
intraservice work description in the summary of recommendations for
this code to explain the use, if any, of the nephroureteral catheter in
this procedure.
The RUC recommended the inclusion of ``room, angiography'' (EL011)
for this family of codes. We do not agree with the RUC that an
angiography room would be used in the typical case for these
procedures, as there are other rooms available which can provide
fluoroscopic guidance. Most of the codes that make use of an
angiography room are cardiovascular codes, and much of the equipment
listed for this room would not be used for non-cardiovascular
procedures. We are therefore proposing to replace equipment item
``room, angiography'' (EL011) with equipment item ``room, radiographic-
fluoroscopic'' (EL014) for the same number of minutes. We are
requesting public comment regarding the typical room type used to
furnish the services described by these CPT codes, as well as the more
general question of the typical room type used for GU and GI
procedures. In the past, the RUC has developed broad recommendations
regarding the typical uses of rooms for particular procedures,
including the radiographic-fluoroscopy room. We believe that such a
recommendation from the RUC concerning all of these codes could be
useful in ensuring relativity across the PFS.
(9) Penile Trauma Repair (CPT Codes 5443A and 5443B)
CPT created these two new codes because there are no existing codes
to capture penile traumatic injury that includes penile fracture, also
known as traumatic corporal tear, and complete penile amputation. CPT
code 5443A will describe a repair of traumatic corporeal tear(s) while
CPT code 5443B will describe a replantation, penis, complete
amputation. For CPT code 5443B, we disagree with the RUC recommendation
of a work RVU of 24.50. We believe that the 25th

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percentile work RVU of 22.10 provides a more accurate value based on
the work involved in the procedure and within the context of other
codes in the same family, since CPT code 5443A was also valued using
the 25th percentile. We find further support for this valuation through
a crosswalk to CPT code 43334 (Repair, paraesophageal hiatal hernia via
thoracotomy, except neonatal) which has an identical intraservice time
and a work RVU of 22.12. Therefore we are proposing a work RVU of 22.10
for CPT code 5443B.
Because CPT codes 5443A and 5443B are typically performed on an
emergency basis, we question the appropriateness of the standard 60
minutes of preservice clinical labor in the facility setting, as the
typical procedure would not make use of office-based clinical labor.
For example, we do not believe that the typical case would require 8
minutes to schedule space in the facility for an emergency procedure,
or 20 minutes to obtain consent. We are seeking further public comment
on this issue from the RUC and other stakeholders.
(10) Intrastromal Corneal Ring Implantation (CPT Code 657XG)
CPT code 657XG is a new code describing insertion of prosthetic
ring segments into the corneal stroma for treatment of keratoconus in
patients whose disease has progressed to a degree that they no longer
tolerate contact lens wear for visual rehabilitation.
We disagree with the RUC recommendation of a work RVU of 5.93 for
CPT code 657XG. Although we appreciated the extensive list of other
codes the RUC provided as references, we are concerned that the
recommended value for CPT code 657XG overestimates the work involved in
furnishing this service relative to other PFS services. We did not find
a single code with comparable intraservice and total time that had a
higher work RVU. The recommended crosswalk, CPT code 67917 (Repair of
ectropion; extensive), appears to have the highest work RVU of any 90-
day global surgery service in this range of work time values. It also
has longer intraservice time and total time than the code in question,
making a direct crosswalk inappropriate.
As a result, we are proposing a new value for CPT code 657XG based
on the intraservice time ratio in relation to the recommended
crosswalk. We compared the 33 minutes of intraservice time in CPT code
67917 to the 30 minutes of intraservice time in CPT code 657XG. The
intraservice time ratio between these two codes is 0.91, and when
multiplied by the work RVU of CPT code 67917 (5.93) resulted in a
potential work RVU of 5.39. We also considered CPT code 58605 (Ligation
or transection of fallopian tube(s)), which has the same intraservice
time, seven additional minutes of total time, and a work RVU of 5.28.
We believe that CPT 58605 is a closer fit for a direct crosswalk
because it shares the same intraservice time of 30 minutes with CPT
code 657XG. Accordingly, we are proposing a work RVU of 5.39 for CPT
code 657XG.
The RUC recommendation for CPT code 657XG includes a series of
invoices for several new supplies and equipment items. One of these was
the 10-0 nylon suture with two submitted invoice prices of $245.62 per
box of 12, or $20.47 per suture, and another was priced at $350.62 per
box of 12, or $29.22 per suture. Given the range of prices between
these two invoices, we sought publicly available information and
identified numerous sutures that appear to be consistent with those
recommended by the specialty society, at lower prices, which we believe
are more likely to be typical since we assume that the typical
practitioner would seek the best price. One example is ``Surgical
Suture, Black Monofilament, Nylon, Size: 10-0, 12''/30cm, Needle: DSL6,
12/bx'' for $146. Therefore, we are proposing to establish a new supply
code for ``suture, nylon 10-0'' and price that item at $12.17 each. We
welcome comments from stakeholders regarding this supply item.
(11) Dilation and Probing of Lacrimal and Nasolacrimal Duct (CPT Codes
66801, 68810, 68811, 68815 and 68816)
The RUC's review of 10-day global services identified 18 services
with greater than 1.5 office visits and 2012 Medicare utilization data
over 1,000, including CPT codes 66801, 68810, 68811, 68815, and 68816.
As a result, the RUC requested these services be surveyed reviewed for
CY 2016.
The RUC recommended a work RVU of 1.00 for CPT code 68801 and a
work RVU of 1.54 for CPT code 68810. While we are proposing to use the
RUC-recommended work RVU for CPT code 68810, we do not believe the
recommendation for CPT code 68801 best reflects the work involved in
the procedure because of a discrepancy between the post-operative work
time and work RVU. Specifically, the RUC recommendation for the
procedure included the removal of a 99211 visit, but the RUC-
recommended work RVU did not reflect any corresponding adjustment. As a
result, we are proposing to accept the RUC's recommendation to remove
the 99211 visit from the service but are proposing to further reduce
the work RVU for CPT code 68801 by removing the RVUs associated with
CPT code 99211. Therefore, for CY 2016, we are proposing a work RVUs of
0.82 to CPT code 68801 and 1.54 to CPT code 68810.
The RUC recommended a work RVU of 2.03, 3.00, and 2.35 for CPT
codes 68811, 68815 and 68816, respectively. We do not believe the RUC
recommendations for these services best reflect the work involved in
performing these procedures. To value these services, we calculated a
total time ratio by dividing the code's current total time by the RUC-
recommended total time, and then applying that ratio to the current
work RVU. This produces our CY 2016 proposed work RVUs of 1.74, 2.70,
and 2.10 for CPT codes 68811, 68815, and 68816, respectively.
(12) Spinal Instability (CPT Code 7208A, 7208B, 7208C, and 7208D)
For CY 2015, the CPT Editorial Panel deleted codes 72010
(radiologic examination, spine, entire, survey study, anteroposterior
and lateral), 72069 (radiologic examination, spine, thorocolumbar,
standing (scoliosis)), and 72090 (radiological examination, spine;
scoliosis study, including supine and erect studies), revised one code,
72080 (Radiologic examination, spine; thoracolumbar junction, minimum
of 2 views) and created four new codes which cover radiologic
examination of the entire thoracic and lumbar spine, including the
skull, cervical and sacral spine if performed. The new codes were
organized by number of views, ranging from one view in 7208A, two to
three views in 7208B, four to five views in 7208C, and minimum of 6
views in 7208D.
We disagree with the RUC's work RVU recommendations for these four
codes. For 7208A, we noted that the one minute increase in time
resulted in a larger work RVU than would be expected when taking the
ratio between time and RVU in the source code and comparing that to the
time and work RVU ratio in the new code. Using the relationship between
time and RVU from deleted code 72069, we are proposing a work RVU of
0.26 for 7208A, which differs from the RUC-recommended value of 0.30.
Using an incremental methodology based on the relationship between work
and time in the first code we are proposing to adjust the RUC-
recommended work RVUs for CPT codes 7208B, 7208C and 7208D to,
respectively, 0.31, 0.35, and 0.41.

[[Page 41778]]

(13) Echo Guidance for Ova Aspiration (CPT Code 76948)
In the CY 2014 PFS final rule with comment period, we requested
additional information to assist us in the valuation of ultrasound
guidance codes. We nominated these codes as potentially misvalued based
on the extent to which standalone ultrasound guidance codes were billed
separately from services where ultrasound guidance was an integral part
of the procedure. CPT code 76948 was among the codes considered
potentially misvalued. CPT code 76948 was surveyed by the specialty
societies and the RUC issued a recommendation for CY 2016. We have
concerns about valuation this code, considering that it is a guidance
code used only for a single procedure: 58970 (aspiration of ova), and
we believe that these two codes are almost always billed concurrently.
We believe codes 76948 and 58970 should be bundled to accurately
reflect how the service is furnished.
We are proposing to use work times based on refinements of the RUC-
recommended values by removing the 3 minutes of pre and post service
time since these times are reflected in the 58970 procedure code. We
are proposing work and time values for 76948 based on a crosswalk from
76945 (Ultrasonic guidance for chorionic villus sampling, imaging
supervision and interpretation) which has a physician work time of 30
minutes and an RVU of 0.56. Therefore we are proposing to maintain 25
minutes of intraservice time for 76948 and proposing a work RVU of
0.56.
(14) Immunohistochemistry (CPT Codes 88341, 88342, and 88344)
In establishing interim final direct PE inputs for CY 2015 for CPT
codes 88341, 88342, and 88344, we replaced the RUC-recommended supply
item ``UltraView Universal DAB Detection Kit'' (SL488) with ``Universal
Detection Kit'' (SA117), since the RUC did not provide an explanation
for the required use of a more expensive kit. We also adjusted the
equipment time for equipment item ``microscope, compound'' (EP024). We
re-examined these codes when valuing the immunofluorescence family of
codes for CY 2016, and reviewed information received by commenters that
explained the need for these supply items. Specifically, commenters
explained that the universal detection kit that CMS included in place
of the RUC-recommended kit was not typically used in these services as
it was not clinically appropriate. We are proposing to include the RUC-
recommended supply item, SL488, for CPT codes 88341, 88342, and 88344,
as well as the RUC-recommended equipment time for ``microscope,
compound'' for CY 2016.
(15) Immunofluorescent Studies (CPT Codes 88346 and 8835X)
For CY 2016, the CPT Editorial Panel deleted one code, CPT 88347
(Antibody evaluation), created a new add-on service, CPT 8835X, and
revised CPT code 88346 to describe immunofluorescent studies. The RUC
recommended a work RVU of 0.74 for CPT code 88346 and 0.70 for CPT code
8835X. While we are accepting the RUC recommendation for CPT code
88346, we do not believe the recommendation for CPT code 8835X best
reflects the work involved in the procedure due to our concerns with
the relationship between the RUC-recommended intraservice times for the
base code and the newly created add-on code. We examined intraservice
time relationships between other base codes and add-on codes and found
that two codes in the Intravascular ultrasound family, CPT 37250
(Ultrasound evaluation of blood vessel during diagnosis or treatment)
and 37251(Ultrasound evaluation of blood vessel during diagnosis or
treatment), share a similar base code/add-on code intraservice time
relationship, and are also diagnostic in nature, as are CPT codes 88346
and 8835X. Due to these similarities, we believe it is appropriate to
apply the relationship, which is a 24 percent difference, between CPT
codes 37250 and 37251 in calculating work RVUs for CPT codes 88346 and
8835X. Multiplying the RVU of CPT code 88346, 0.74, by 24 percent, and
then subtracted the product from 0.74 results in a work RVU of 0.56 for
CPT code 8835X. Therefore, for CY 2016, we are proposing a work RVU of
0.74 for CPT code 88346 and 0.56 for CPT code 8835X.
(16) Morphometric Analysis (CPT Codes 88364, 88365, 88366, 88367,
88373, 88374, 88377, 88368, and 88369)
CPT codes 88367 and 88368 were reviewed and valued in the CY 2015
PFS final rule with comment period (79 FR 67668 through 67669). Since
then, the RUC has re-reviewed these services for CY 2016 due to the
specialty society's initially low survey response rate. In our review
of these codes, we noticed that the latest RUC recommendation is
identical to the RUC recommendation provided for CY 2015 rulemaking. As
a result, we do not believe there is any reason to modify our CY 2015
work RVUs or work time for these procedures. Therefore, we are
proposing to retain the CY 2015 work RVUs and work time for CPT codes
88367 and 88368 for CY 2016.
In establishing interim final direct PE inputs for CY 2015 for CPT
codes 88364, 88365, 88366, 88367, 88373, 88374, 88377, 88368, and
88369, we refined the RUC-recommended direct PE inputs as follows. We
refined the units of several supply items, including ``ethanol, 100%''
(SL189), ``ethanol, 70%'' (SL190), ``ethanol, 85%'' (SL191), ``ethanol,
95%'' (SL248), ``kit, FISH paraffin pretreatment'' (SL195), ``kit, HER-
2/neu DNA Probe'' (SL196), positive and negative control slides (SL112,
SL118, SL119, SL184, SL185, SL508, SL509, SL510, SL511), ``(EBER) DNA
Probe Cocktail'' (SL497),''Kappa probe cocktails'' (SL498) and ``Lambda
probe cocktails'' (SL499), to maintain consistency within the codes in
the family, and adjusted the quantities included in these codes to
align with the code descriptors and better reflect the typical
resources used in furnishing these services. We also adjusted the
equipment time for equipment items ``water bath, FISH procedures
(lab)'' (EP054), ``chamber, Hybridization'' (EP045), ``microscope,
compound'' (EP024), ``instrument, microdissection (Veritas)'' (EP087),
and ``ThermoBrite'' (EP088), to reflect the typical time the equipment
is used, among other common refinements.
We re-examined these codes when valuing the immunofluorescence
family of codes for CY 2016, and reviewed information received from
commenters that described the typical batch size for each of these
services, thereby explaining the apparent inconsistencies and
discrepancies in the quantity of units among the codes in the family.
We are proposing to include the RUC-recommended quantities for each of
these supply items for the CPT codes 88364, 88365, 88366, 88367, 88373,
88374, 88377, 88368, and 88369 for CY 2016. With regard to the
equipment items, we received information explaining that the
recommended equipment times already accounted for the typical batch
size, and thus, the recommended times were already reflective of the
typical case. Therefore, we are proposing to adjust the equipment time
for equipment items EP054, EP045, and EP087 to align with the RUC-
recommended times. We also received comments explaining the need for
equipment item EP088. Based on that information, we are proposing to
include this equipment item consistent with the RUC recommendations for
CPT code 88366.
We note that the information we received regarding the typical
batch size

[[Page 41779]]

was critical in determining the appropriate direct PE inputs for these
pathology services. We also note that we usually do not have
information regarding the typical batch size or block size when we are
reviewing the direct PE inputs for pathology services. The supply
quantity and equipment minutes are often a direct function of the
number of tests processed at once. Given the importance of the typical
number of tests being processed by a laboratory in determining the
direct PE inputs, which often include expensive supplies, we are very
concerned that the direct PE inputs included in many pathology services
may not reflect the typical resource costs involved in furnishing the
typical service.
In particular, we note that since laboratories of various sizes
furnish pathology tests and that, depending on the test, a large
laboratory may be at least as likely to have furnished a test to a
Medicare beneficiary compared to a small laboratory, we believe that an
equipment item included in a recommendation that is commercially
available to a small laboratory may not be the same equipment item that
is used in the typical case. If the majority of services billed under
the PFS for a particular CPT code are furnished by laboratories that
run many of these tests each day, then assumptions informed by
commercially available products may significantly underestimate the
typical number of tests processed together, and thus the assumptions
underlying current valuations for per-test cost of supplies and
equipment may be much higher than the typical resources used in
furnishing the service. We invite stakeholders to provide us with
information about the equipment and supply inputs used in the typical
case for particular pathology services.
(17) Vestibular Caloric Irrigation (CPT Codes 9254A and 9254B)
For CY 2016, the CPT Editorial Panel deleted CPT code 92543
(Assessment and recording of balance system during irrigation of both
ears) and created two new CPT codes, 9254A and 9254B, to report caloric
vestibular testing for bithermal and monothermal testing procedures,
respectively. The RUC recommended a work RVU of 0.80 for CPT code 9254A
and a work RVU of 0.55 for CPT code 9254B. We believe the
recommendations for these services overstate the work involved in
performing these procedures. Due to similarity in service and time, we
believe a direct crosswalk of CPT code 97606 (Negative pressure wound
therapy, surface area greater than 50 square centimeters, per session)
to CPT code 9254A is appropriate. To value CPT code 9254B, we divided
the proposed work RVU for 9254A in half since the code descriptor for
this procedure describes the service as having two irrigations as
opposed to the four involved in 9254A. Therefore, for CY 2016, we are
proposing a work RVUs of 0.60 to 9254A and 0.30 to 9254B.
(18) Instrument-Based Ocular Screening (CPT Codes 99174 and 9917X)
For CY 2015, the CPT Editorial Panel created a new code, CPT code
9917X, to describe instrument-based ocular screening with on-site
analysis and also revised existing CPT code 99174, which describes
instrument-based ocular screening with remote analysis and report.
Currently, CPT code 99174 is assigned a status indicator of N (non-
covered service) which we believe should be maintained due to its
nature as a screening service. After review of CPT code 9917X, we
believe this service is also a screening service and should be assigned
a status indicator of N (non-covered service). Therefore, for CY 2016,
we are proposing to assign a PFS status indicator of N (non-covered
service) for CPT codes 99174 and 9917X.
(19) Low-Dose Computer Tomography, Lung, Screening (GXXX1) and Lung
Cancer Screening Counseling and Shared Decision Making Visit (GXXX2)
We have issued national coverage determination (NCD) for the
coverage of a lung cancer screening counseling and shared decision
making visit and, for appropriate beneficiaries, annual screening with
low dose computed tomography (LDCT) as an additional preventive
benefit. The American College of Radiology (ACR) submitted
recommendations for work and direct PE inputs. The ACR recommended that
we crosswalk GXXX1 to 71250 (computed tomography, thorax; without
contrast material) with additional physician work added to account for
the added intensity of the service. After reviewing this
recommendation, we believe that the physician work (time and intensity)
is identical in both GXXX1 and 71250, and therefore, we are proposing a
work RVU of 1.02 for GXXX1.
We are proposing to value the lung cancer screening counseling and
shared decision making visit (GXXX2) using a crosswalk from the work
value for G0443 (Brief face-to-face counseling for alcohol misuse, 15
minutes) which has a work RVU of 0.45. We added 2 minutes of pre-
service time, and 1 minute post-service time which we valued at 0.0224
RVU per minute yielding a total of 0.062 additional RVUs which we then
added to 0.45, bringing the total proposed work RVUs for GXXX2 to 0.52.
The direct PE input recommendations from the ACR were refined according
to CMS standard refinements and appear in the CY 2016 proposed direct
PE input database.
7. Direct PE Input-Only Recommendations
In CY 2014, we proposed to limit the nonfacility PE RVUs for
individual codes so that the total nonfacility PFS payment amount would
not exceed the total combined amount that Medicare would pay for the
same code in the facility setting. In developing the proposal, we
sought a reliable means for Medicare to set upper payment limits for
office-based procedures given our several longstanding concerns
regarding the accuracy of certain aspects of the direct PE inputs,
including both items and procedure time assumptions, and prices of
individual supplies and equipment (78 FR 74248 through 74250). After
considering the many comments we received regarding our proposal, the
majority of which urged us to withdraw the proposal for a variety of
reasons, we decided not to finalize the policy. However, we continue to
believe that using practice expense data that are auditable,
comprehensive, and regularly updated would contribute to the accuracy
of practice expense calculations.
Subsequent to our decision not to finalize the proposal, the RUC
forwarded direct PE input recommendations for a subset of codes with
nonfacility PE RVUs that would have been limited by the policy. Some of
these codes also include work values, but the RUC recommendations did
not address the accuracy of those values.
We generally believe that combined reviews of work and PE for each
code under the potentially misvalued codes initiative leads to more
accurate and appropriate assignment of RVUs. We also believe, and have
previously stated, that our standard process for evaluating potentially
misvalued codes is unlikely to be the most effective means of
addressing our concerns regarding the accuracy of some aspects of the
direct PE inputs (79 FR 74248).
However, we also believe it is important to use the most accurate
and up-to-date information available to us when developing PFS RVUs for
individual services. Therefore, we have reviewed the RUC-recommended
direct PE inputs for these services and are proposing to use them, with
the refinements addressed in this section. However, we are also
identifying these

[[Page 41780]]

codes as potentially misvalued because their direct PE inputs were not
reviewed alongside review of their work RVUs and time. We considered
not addressing these recommendations until such time as comprehensive
reviews could occur, but we recognized the public interest in using the
updated recommendations regarding the PE inputs until such time as the
work RVUs and time can be addressed. Therefore, we note that while we
are proposing adjusted PE inputs for these services based on these
recommendations, we would anticipate addressing any corresponding
change to direct PE inputs once the work RVUs and time are addressed.
a. Repair of Nail Bed (CPT Code 11760)
This recommendation includes 22 minutes of clinical labor time
assigned for ``Assist physician in performing procedure.'' Because CPT
code 11760 has 33 minutes of work intraservice time, we believe that
this clinical labor input was intended to be calculated at 67 percent
of work time. However, the equipment times are also calculated based on
the 22 minutes of intraservice time. We are seeking comment on whether
or not it would be appropriate to include the full 33 minutes of work
intraservice time for the equipment.
b. Submucosal Ablation of the Tongue Base (CPT Code 41530)
We did not review CPT code 41530 for direct PE inputs, because we
noted that the RUC anticipates making recommendations regarding the
work RVU and direct PE inputs for this service in the near future.
c. Cytopathology Fluids, Washings or Brushings (CPT Codes 88104, 88106,
88108)
We are proposing to update the Millipore filter supply (SL502)
based on stakeholder submission of new information following the RUC's
original recommendation. As requested, we are proposing to crosswalk
the price of the Millipore filter to the cytology specimen filter
(Transcyst) supply (SL041) and assign a value of $4.15. This change is
reflected in the proposed direct PE input database.
d. Cytopathology Smears, Screening and Interpretation (CPT Codes 88160,
88161, 88162)
We are concerned that there is a lack of clarity and the
possibility for confusion contained in the CPT descriptors of CPT codes
88160 and 88161. The CPT descriptor for the first code refers to the
``screening and interpretation'' of Cytopathology smears, while the
descriptor for the second code refers to the ``preparation, screening
and interpretation'' of Cytopathology smears. We believe that there is
currently the potential for duplicative counting of direct PE inputs
due to the overlapping nature of these two codes. We are concerned that
the same procedure may be billed multiple times under both CPT code
88160 and 88161. We believe that these codes are potentially misvalued,
and we are seeking a full review of this family of codes for both work
and PE, given the potential for overlap. We recognize that the ideal
solution may involve revisions by the CPT Editorial Panel.
With regard to the current direct PE input recommendations, we are
proposing to remove the clinical labor minutes recommended for ``Stain
air dried slides with modified Wright stain'' for CPT code 88160 since
staining slides would not be a typical clinical labor task if there is
no slide preparation taking place, as the descriptor for this code
suggests.
We are proposing to update the protease solution supply (SL506)
based on stakeholder submission of new information following the RUC's
original recommendation. As requested, we are proposing to change the
name of the supply to ``Protease'', alter the unit of measurement from
milliliters to milligrams, change the quantity assigned to CPT code
88182 from 1 to 1.12, and update the price from $0.47 to $0.4267. These
changes are reflected in the proposed direct PE input database.
We are requesting additional information regarding the use of the
desktop computer with monitor (ED021) for CPT code 88182. We have made
no change to the current equipment time value pending the submission of
additional information.
e. Flow Cytometry, Cytoplasmic Cell Surface (CPT Code 88184, 88185)
We are requesting additional information regarding the specific use
of the desktop computer with monitor (ED021) for CPT codes 88184 and
88185 since the recommendation does not specify how it is used.
f. Consultation on Referred Slides and Materials (CPT Codes 88321,
88323, 88325)
We are proposing to remove the clinical labor time for ``Accession
specimen/prepare for examination'' for CPT codes 88321 and 88325. These
codes do not involve the preparation of slides, so this clinical labor
task is duplicative with the labor carried out under ``Open shipping
package, remove and sort slides based on outside number.'' We are
proposing to maintain the recommended 4 minutes for this clinical labor
task for CPT code 88323, since it does require slide preparation.
We are proposing to refine the clinical labor time for ``Register
the patient in the information system, including all demographic and
billing information'' from 13 minutes to 5 minutes for all three codes.
As indicated in Table 6, our proposed standard clinical labor time for
entering patient data is 4 minutes for pathology codes, and we believe
that the extra tasks involving label preparation described in this
clinical labor task would typically require an additional 1 minute to
complete. We also believe that the additional recommended time likely
reflects administrative tasks that are appropriately accounted for in
the indirect PE methodology.
We are proposing to refine the clinical labor time from 7 minutes
to 5 minutes for the new task ``Receive phone call from referring
laboratory/facility with scheduled procedure to arrange special
delivery of specimen procurement kit, including muscle biopsy clamp as
needed. Review with sender instructions for preservation of specimen
integrity and return arrangements. Contact courier and arrange delivery
to referring laboratory/facility.'' Based on the description of this
task, we believe that this task would typically take 5 minutes to be
performed by the Lab Technician.
We are proposing to remove the eosin solution supply (SL063) from
CPT code 88323. We do not agree that this supply would be typically
used in this procedure, and the eosin solution is redundant when used
together with the hematoxylin stain supply (SL135). We are also
refining the quantity of the hematoxylin stain from 32 to 8 for CPT
code 88323, to be consistent with its use in other related Pathology
codes.
We are proposing to remove many of the inputs for clinical labor,
supplies, and equipment for CPT code 88325. The descriptor for this
code indicates that it does not involve slide preparation, and
therefore we are proposing labor, supplies, and equipment inputs to
match the inputs recommended for CPT code 88321, which also does not
include the preparation of slides.
g. Morphometric Analysis, Tumor Immunohistochemistry (CPT Codes 88360,
88361)
We are proposing to update the pricing for the Benchmark ULTRA
automated slide preparation system (EP112) and the E-Bar II Barcode
Slide Label System (EP113). Based on stakeholder submission of
information subsequent to the original RUC recommendation, we are
reclassifying

[[Page 41781]]

these two pieces of equipment as a single item with a price of
$150,000. CPT codes 88360 and 88361 have been valued using this new
price. The equipment time values remain unchanged.
The RUC recommendation for CPT codes 88360 and 88361 included an
invoice for the Antibody Estrogen Receptor monoclonal supply (SL493).
The submitted invoice has a price of $694.70 per box of 50, or $13.89
per test. We sought publically available information regarding this
supply and identified numerous monoclonal antibody estrogen receptors
that appear to be consistent with those recommended by the specialty
society, at publicly available lower prices, which we believe are more
likely to be typical since we assume that the typical practitioner
would seek the best price available to the public. One example is
Estrogen Receptor Antibody (h-151) [DyLight 405], priced at 100 tests
per box for $319. Therefore, we are proposing to establish a new supply
code for ``Antibody Estrogen Receptor monoclonal'' and price that item
at $3.19 each. We welcome comments from stakeholders regarding this
supply item.
h. Nerve Teasing Preparations (CPT Code 88362)
We are proposing to refine the recommended clinical labor time for
``Assist pathologist with gross specimen examination including the
following; Selection of fresh unfixed tissue sample; selection of
tissue for formulant fixation for paraffin blocking and epon blocking.
Reserve some specimen for additional analysis'' from 10 minutes to 5
minutes. We note that the 5 minutes includes 3 minutes for assisting
the pathologist with the gross specimen examination (as listed in Table
6) and an additional 2 minutes for the additional tasks due to the work
taking place on a fresh specimen.
i. Nasopharyngoscopy With Endoscope (CPT Code 92511)
We are proposing to remove the endosheath (SD070) from this
procedure, because we do not believe it would be typically used and it
was not included in the recommendations for any of the other related
codes in the same tab. If the endosheath were included as a supply with
the presentation of additional clinical information, then we believe it
would be appropriate to remove all of the clinical labor and equipment
time currently assigned to cleaning the scope.
j. Needle Electromyography (CPT Codes 95863, 95864, 95869, 95870)
We are proposing to reduce the quantity of the iontophoresis
electrode kit (SA014) supply from 4 to 3. According to the description
of this code, the procedure typically uses 2-4 electrodes, and
therefore we believe that a supply quantity of 3 would better reflect
the typical case. We are requesting further information regarding the
typical number of electrodes used in this procedure; if the maximum of
4 electrodes is in fact typical for the procedure, then we recommend
that the code descriptor be referred to CPT for further clarification.

J. Medicare Telehealth Services

1. Billing and Payment for Telehealth Services
Several conditions must be met for Medicare to make payments for
telehealth services under the PFS. The service must be on the list of
Medicare telehealth services and meet all of the following additional
requirements:
The service must be furnished via an interactive
telecommunications system.
The service must be furnished by a physician or authorized
practitioner.
The service must be furnished to an eligible telehealth
individual.
The individual receiving the service must be located in a
telehealth originating site.
When all of these conditions are met, Medicare pays a facility fee
to the originating site and makes a separate payment to the distant
site practitioner furnishing the service.
Section 1834(m)(4)(F)(i) of the Act defines Medicare telehealth
services to include consultations, office visits, office psychiatry
services, and any additional service specified by the Secretary, when
furnished via a telecommunications system. We first implemented this
statutory provision, which was effective October 1, 2001, in the CY
2002 PFS final rule with comment period (66 FR 55246). We established a
process for annual updates to the list of Medicare telehealth services
as required by section 1834(m)(4)(F)(ii) of the Act in the CY 2003 PFS
final rule with comment period (67 FR 79988).
As specified at Sec. 410.78(b), we generally require that a
telehealth service be furnished via an interactive telecommunications
system. Under Sec. 410.78(a)(3), an interactive telecommunications
system is defined as multimedia communications equipment that includes,
at a minimum, audio and video equipment permitting two-way, real-time
interactive communication between the patient and distant site
physician or practitioner.
Telephones, facsimile machines, and stand-alone electronic mail
systems that are not integrated into an electronic health record system
do not meet the definition of an interactive telecommunications system.
An interactive telecommunications system is generally required as a
condition of payment; however, section 1834(m)(1) of the Act allows the
use of asynchronous ``store-and-forward'' technology when the
originating site is part of a federal telemedicine demonstration
program in Alaska or Hawaii. As specified in Sec. 410.78(a)(1),
asynchronous store-and-forward is the transmission of medical
information from an originating site for review by the distant site
physician or practitioner at a later time.
Medicare telehealth services may be furnished to an eligible
telehealth individual notwithstanding the fact that the practitioner
furnishing the telehealth service is not at the same location as the
beneficiary. An eligible telehealth individual is an individual
enrolled under Part B who receives a telehealth service furnished at an
originating site.
Practitioners furnishing Medicare telehealth services are reminded
that these services are subject to the same non-discrimination laws as
other services, including the effective communication requirements for
persons with disabilities of section 504 of the Rehabilitation Act and
language access for persons with limited English proficiency, as
required under Title VI of the Civil Rights Act of 1964. For more
information, see http://www.hhs.gov/ocr/civilrights/resources/specialtopics/hospitalcommunication.
Practitioners furnishing Medicare telehealth services submit claims
for telehealth services to the Medicare Administrative Contractors that
process claims for the service area where their distant site is
located. Section 1834(m)(2)(A) of the Act requires that a practitioner
who furnishes a telehealth service to an eligible telehealth individual
be paid an amount equal to the amount that the practitioner would have
been paid if the service had been furnished without the use of a
telecommunications system.
Originating sites, which can be one of several types of sites
specified in the statute where an eligible telehealth individual is
located at the time the service is being furnished via a
telecommunications system, are paid a fee under the PFS a facility fee
for each Medicare telehealth service. The statute

[[Page 41782]]

specifies both the types of entities that can serve as originating
sites and the geographic qualifications for originating sites. With
regard to geographic qualifications, Sec. 410.78(b)(4) limits
originating sites to those located in rural health professional
shortage areas (HPSAs) or in a county that is not included in a
metropolitan statistical areas (MSAs).
Historically, we have defined rural HPSAs to be those located
outside of MSAs. Effective January 1, 2014, we modified the regulations
regarding originating sites to define rural HPSAs as those located in
rural census tracts as determined by the Office of Rural Health Policy
(ORHP) of the Health Resources and Services Administration (HRSA) (78
FR 74811). Defining ``rural'' to include geographic areas located in
rural census tracts within MSAs allows for broader inclusion of sites
within HPSAs as telehealth originating sites. Adopting the more precise
definition of ``rural'' for this purpose expands access to health care
services for Medicare beneficiaries located in rural areas. HRSA has
developed a Web site tool to provide assistance to potential
originating sites to determine their geographic status. To access this
tool, see the CMS Web site at www.cms.gov/teleheath/.
An entity participating in a federal telemedicine demonstration
project that has been approved by, or received funding from, the
Secretary as of December 31, 2000 is eligible to be an originating site
regardless of its geographic location.
Effective January 1, 2014, we also changed our policy so that
geographic status for an originating site would be established and
maintained on an annual basis, consistent with other telehealth payment
policies (78 FR 74400). Geographic status for Medicare telehealth
originating sites for each calendar year is now based upon the status
of the area as of December 31 of the prior calendar year.
For a detailed history of telehealth payment policy, see 78 FR
74399.
2. Adding Services to the List of Medicare Telehealth Services
As noted previously, in the December 31, 2002 Federal Register (67
FR 79988), we established a process for adding services to or deleting
services from the list of Medicare telehealth services. This process
provides the public with an ongoing opportunity to submit requests for
adding services. Under this process, we assign any qualifying request
to make additions to the list of telehealth services to one of two
categories. Revisions to criteria that we use to review requests in the
second category were finalized in the November 28, 2011 Federal
Register (76 FR 73102). The two categories are:
Category 1: Services that are similar to professional
consultations, office visits, and office psychiatry services that are
currently on the list of telehealth services. In reviewing these
requests, we look for similarities between the requested and existing
telehealth services for the roles of, and interactions among, the
beneficiary, the physician (or other practitioner) at the distant site
and, if necessary, the telepresenter, a practitioner who is present
with the beneficiary in the originating site. We also look for
similarities in the telecommunications system used to deliver the
proposed service; for example, the use of interactive audio and video
equipment.
Category 2: Services that are not similar to the current
list of telehealth services. Our review of these requests includes an
assessment of whether the service is accurately described by the
corresponding code when furnished via telehealth and whether the use of
a telecommunications system to deliver the service produces
demonstrated clinical benefit to the patient. In reviewing these
requests, we look for evidence indicating that the use of a
telecommunications system in furnishing the candidate telehealth
service produces clinical benefit to the patient. Submitted evidence
should include both a description of relevant clinical studies that
demonstrate the service furnished by telehealth to a Medicare
beneficiary improves the diagnosis or treatment of an illness or injury
or improves the functioning of a malformed body part, including dates
and findings, and a list and copies of published peer reviewed articles
relevant to the service when furnished via telehealth. Our evidentiary
standard of clinical benefit does not include minor or incidental
benefits.
Some examples of clinical benefit include the following:
Ability to diagnose a medical condition in a patient
population without access to clinically appropriate in-person
diagnostic services.
Treatment option for a patient population without access
to clinically appropriate in-person treatment options.
Reduced rate of complications.
Decreased rate of subsequent diagnostic or therapeutic
interventions (for example, due to reduced rate of recurrence of the
disease process).
Decreased number of future hospitalizations or physician
visits.
More rapid beneficial resolution of the disease process
treatment.
Decreased pain, bleeding, or other quantifiable symptom.
Reduced recovery time.
For the list of covered telehealth services, see the CMS Web site
at www.cms.gov/teleheath/. Requests to add services to the list of
Medicare telehealth services must be submitted and received no later
than December 31 of each calendar year to be considered for the next
rulemaking cycle. For example, qualifying requests submitted before the
end of CY 2015 will be considered for the CY 2017 proposed rule. Each
request to add a service to the list of Medicare telehealth services
must include any supporting documentation the requester wishes us to
consider as we review the request. Because we use the annual PFS
rulemaking process as a vehicle for making changes to the list of
Medicare telehealth services, requestors should be advised that any
information submitted is subject to public disclosure for this purpose.
For more information on submitting a request for an addition to the
list of Medicare telehealth services, including where to mail these
requests, see the CMS Web site at www.cms.gov/telehealth/.
3. Submitted Requests to the List of Telehealth Services for CY 2016
Under our existing policy, we add services to the telehealth list
on a category 1 basis when we determine that they are similar to
services on the existing telehealth list with respect to the roles of,
and interactions among, the beneficiary, physician (or other
practitioner) at the distant site and, if necessary, the telepresenter.
As we stated in the CY 2012 final rule with comment period (76 FR
73098), we believe that the category 1 criteria not only streamline our
review process for publicly requested services that fall into this
category, the criteria also expedite our ability to identify codes for
the telehealth list that resemble those services already on this list.
a. Submitted Requests
We received several requests in CY 2014 to add various services as
Medicare telehealth services effective for CY 2016. The following
presents a discussion of these requests, and our proposals for
additions to the CY 2016 telehealth list. Of the requests received, we
find that the following services are sufficiently similar to
psychiatric diagnostic procedures or office/outpatient visits currently
on the telehealth list to qualify on a category one basis. Therefore,
we propose to add the following services to the telehealth list on a
category 1 basis for CY 2016:

[[Page 41783]]

CPT code 99356 (prolonged service in the inpatient or
observation setting, requiring unit/floor time beyond the usual
service; first hour (list separately in addition to code for inpatient
evaluation and management service); and 99357 (prolonged service in the
inpatient or observation setting, requiring unit/floor time beyond the
usual service; each additional 30 minutes (list separately in addition
to code for prolonged service).
The prolonged service codes can only be billed in conjunction with
hospital inpatient and skilled nursing facility evaluation & management
(E/M) codes, and of these, only subsequent hospital and subsequent
nursing facility visit codes are on list of Medicare telehealth
services. Therefore, CPT codes 99356 and 99357 would only be reportable
with codes for which limits of one subsequent hospital visit every
three days via telehealth, and one subsequent nursing facility visit
every thirty days, would continue to apply.
CPT codes 90963 (end-stage renal disease (ESRD) related
services for home dialysis per full month, for patients younger than 2
years of age to include monitoring for the adequacy of nutrition,
assessment of growth and development, and counseling of parents); 90964
(end-stage renal disease (ESRD) related services for home dialysis per
full month, for patients 2-11 years of age to include monitoring for
the adequacy of nutrition, assessment of growth and development, and
counseling of parents); 90965 (end-stage renal disease (ESRD) related
services for home dialysis per full month, for patients 12-19 years of
age to include monitoring for the adequacy of nutrition, assessment of
growth and development, and counseling of parents); and 90966 (end-
stage renal disease (ESRD) related services for home dialysis per full
month, for patients 20 years of age and older).
Although these services are for home-based dialysis, and a
patient's home is not an authorized originating site for telehealth, we
recognize that many components of these services would be furnished
from an authorized originating site and, therefore, can be furnished
via telehealth.
The required clinical examination of the catheter access site must
be furnished face-to-face ``hands on'' (without the use of an
interactive telecommunications system) by a physician, certified nurse
specialist (CNS), nurse practitioner (NP), or physician's assistant
(PA). An interactive telecommunications system may be used for
providing additional visits required under the 2 to 3 visit Monthly
Capitation Payment (MCP) code and the 4 or more visit MCP code. See the
final rule for CY 2005 (69 FR 66276) for further information on
furnishing ESRD services via telehealth.
We also received requests to add services to the telehealth list
that do not meet our criteria for Medicare telehealth services. We are
not proposing to add the following procedures for the reasons noted:
All evaluation and management services, telerehabilitation
services, and palliative care, pain management and patient navigation
services for cancer patients.
None of these requests identified the specific codes that were
being requested for addition as telehealth services, and two of the
requests did not include evidence of any clinical benefit when the
services are furnished via telehealth. Since we did not have
information on the specific codes requested for addition or evidence of
clinical benefit for these requests, we cannot evaluate whether the
services are appropriate for addition to the Medicare telehealth
services list.
CPT codes 99291 (critical care, evaluation and management
of the critically ill or critically injured patient; first 30-74
minutes); and 99292 (critical care, evaluation and management of the
critically ill or critically injured patient; each additional 30
minutes (list separately in addition to code for primary service).
We previously considered and rejected adding these codes to the
list of Medicare telehealth services in the CY 2009 PFS final rule (74
FR 69744) on a category 1 basis because, due to the acuity of
critically ill patients, we did not consider critical care services
similar to any services on the current list of Medicare telehealth
services. In that rule, we said that critical care services must be
evaluated as category 2 services. Because we would consider critical
care services under category 2, we needed to evaluate whether these are
services for which telehealth can be an adequate substitute for a face-
to-face encounter. We had no evidence suggesting that the use of
telehealth could be a reasonable surrogate for the face-to-face
delivery of this type of care.
The American Telemedicine Association (ATA) submitted a request,
which cited several studies to support adding these services on a
category 2 basis. To qualify under category 2, we would need evidence
that the service produces a clinical benefit for the patient. However,
in reviewing the information provided by the ATA and a study entitled,
``Impact of an Intensive Care Unit Telemedicine Program on Patient
Outcomes in an Integrated Health Care System,'' published July 2014, in
``JAMA Internal Medicine,'' which found no evidence that the
implementation of ICU TM significantly reduced mortality rates or
hospital length of stay, we do not believe that the evidence
demonstrates a clinical benefit to patients. Therefore, we are not
proposing to add these services on a category 2 basis to the list of
Medicare telehealth services for CY 2016.
CPT code 99358 (prolonged evaluation and management
service before and/or after direct patient care; first hour) and 99359
(prolonged evaluation and management service before and/or after direct
patient care; each additional 30 minutes (list separately in addition
to code for prolonged service).
As we indicated in the CY 2015 PFS final rule with comment period
(79 FR 67600), these services are not separately payable by Medicare.
It would be inappropriate to include a service as a telehealth service
when Medicare does not otherwise make a separate payment for it.
Therefore, we are not proposing to add these non-payable services to
the list of Medicare telehealth services for CY 2016.
CPT code 99444 (online evaluation and management service
provided by a physician or other qualified health care professional who
may report an evaluation and management services provided to an
established patient or guardian, not originating from a related E/M
service provided within the previous 7 days, using the internet or
similar electronic communications network).
As we indicated in the CY 2014 PFS final rule with comment period
(78 FR 74403), we assigned a status indicator of ``N'' (Noncovered
service) to this service because: (1) this service is non-face-to-face;
and (2) the code descriptor includes language that recognizes the
provision of services to parties other than the beneficiary and for
whom Medicare does not provide coverage (for example, a guardian).
Under section 1834(m)(2)(A) of the Act, Medicare pays the physician or
practitioner furnishing a telehealth service an amount equal to the
amount that would have been paid if the service was furnished without
the use of a telecommunications system. Because CPT code 99444 is
currently noncovered, there would be no Medicare payment if this
service was furnished without the use of a telecommunications system.
Since this service is noncovered under Medicare, we are not proposing
to add it to the list of Medicare telehealth services for CY 2016.

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CPT code 99490 (chronic care management services, at least
20 minutes of clinical staff time directed by a physician or other
qualified health care professional, per calendar month, with the
following required elements: multiple (two or more) chronic conditions
expected to last at least 12 months, or until the death of the patient;
chronic conditions place the patient at significant risk of death,
acute exacerbation/decompensation, or functional decline; comprehensive
care plan established, implemented, revised, or monitored).
This service is one that can be furnished without the beneficiary's
face-to-face presence, and using any number of non-face-to-face means
of communication. Therefore, the service is not appropriate for
consideration as a Medicare telehealth service. It is unnecessary to
add this service to the list of Medicare telehealth services.
Therefore, we are not proposing to add it to the list of Medicare
telehealth services for CY 2016.
CPT codes 99605 (medication therapy management service(s)
provided by a pharmacist, individual, face-to-face with patient, with
assessment and intervention if provided; initial 15 minutes, new
patient); 99606 (medication therapy management service(s) provided by a
pharmacist, individual, face-to-face with patient, with assessment and
intervention if provided; initial 15 minutes, established patient); and
99607 (medication therapy management service(s) provided by a
pharmacist, individual, face-to-face with patient, with assessment and
intervention if provided; each additional 15 minutes (list separately
in addition to code for primary service).
These codes are noncovered services for which no payment may be
made under the PFS. Therefore, we are not proposing to add these
services to the list of Medicare telehealth services for CY 2016.
In summary, we are proposing to add the following codes to the list
of Medicare telehealth services beginning in CY 2016 on a category 1
basis: Prolonged service inpatient CPT codes 99356 and 99357 and ESRD-
related services 90933 through 90936. As indicated above, the prolonged
service codes can only be billed in conjunction with subsequent
hospital and subsequent nursing facility codes. Limits of one
subsequent hospital visit every three days, and one subsequent nursing
facility visit every thirty days, would continue to apply when the
services are furnished as telehealth services. For the ESRD related
services, the required clinical examination of the catheter access site
must be furnished face-to-face ``hands on'' (without the use of an
interactive telecommunications system) by a physician, certified nurse
specialist (CNS), nurse practitioner (NP), or physician's assistant
(PA).
We remind all interested stakeholders that we are currently
soliciting public requests to add services to the list of Medicare
telehealth services. To be considered during PFS rulemaking for CY
2017, these requests must be submitted and received by December 31,
2015. Each request to add a service to the list of Medicare telehealth
services must include any supporting documentation the requester wishes
us to consider as we review the request. For more information on
submitting a request for an addition to the list of Medicare telehealth
services, including where to mail these requests, we refer readers to
the CMS Web site at www.cms.gov/telehealth/.
4. Proposal To Amend Sec. 410.78 To Include Certified Registered Nurse
Anesthetists as Practitioners for Telehealth Services
Under section 1834(m)(1) of the Act, Medicare makes payment for
telehealth services furnished by physicians and practitioners. Section
1834(m)(4)(E) of the Act specifies that, for purposes of furnishing
Medicare telehealth services, the term ``practitioner'' has the meaning
given that term in section 1842(b)(18)(C), which includes a certified
registered nurse anesthetist (CRNA) as defined in section 1861 (bb)(2).
We initially omitted CRNAs from the list of distant site
practitioners for telehealth services in the regulation because we did
not believe these practitioners would furnish any of the service on the
list of Medicare telehealth services. However, CRNAs in some states are
licensed to furnish certain services on the telehealth list, including
E/M services. Therefore, we propose to revise the regulation at Sec.
410.78(b)(2) to include a CRNA, as described under Sec. 410.69, to the
list of distant site practitioners who can furnish Medicare telehealth
services.

K. Incident to Proposals: Billing Physician as the Supervising
Physician and Ancillary Personnel Requirements

1. Background
Section 1861(s)(2)(A) of the Act establishes the benefit category
for services and supplies furnished as ``incident to'' the professional
services of a physician. The statute specifies that services and
supplies furnished as an incident to a physician's professional service
(hereinafter ``incident to services'') are ``of kinds which are
commonly furnished in physicians' offices and are commonly either
rendered without charge or included in physicians' bills.'' In addition
to the requirements of the statute, Sec. 410.26 sets forth specific
requirements that must be met for physicians and other practitioners to
bill Medicare for incident to services. Section 410.26(a)(7) limits
incident to services to those included under section 1861(s)(2)(A) of
the Act and that are not covered under another benefit category.
Section 410.26(b) specifies (in part) that in order for services and
supplies to be paid as incident to services under Medicare Part B, the
services or supplies must be:
Furnished in a noninstitutional setting to
noninstitutional patients.
An integral, though incidental, part of the service of a
physician (or other practitioner) in the course of diagnosis or
treatment of an injury or illness.
Furnished under direct supervision (as specified under
Sec. 410.26(a)(2)) of a physician or other practitioner eligible to
bill and directly receive Medicare payment.
Furnished by a physician, a practitioner with an incident
to benefit, or auxiliary personnel.
In addition to Sec. 410.26, there are regulations specific to each
type of practitioner who is allowed to bill for incident to services as
specified in Sec. 410.71(a)(2) (clinical psychologist services), Sec.
410.74(b) (physician assistants' services), Sec. 410.75(d) (nurse
practitioners' services), Sec. 410.76(d) (clinical nurse specialists'
services), and Sec. 410.77(c) (certified nurse-midwives' services).
When referring to practitioners who can bill for services furnished
incident to their professional services, we are referring to physicians
and these practitioners.
Incident to services are treated as if they were furnished by the
billing physician or other practitioner for purposes of Medicare
billing and payment. Consistent with this terminology, in this
discussion when referring to the physician or other practitioner
furnishing the service, we are referring to the physician or other
practitioner who is billing for the incident to service. When we refer
to the ``auxiliary personnel'' or the person who provides the service,
we are referring to an individual who is personally performing the
service or some aspect of it as distinguished from the physician or
other practitioner who bills for the incident to service.
Since we treat incident to services as services furnished by the
billing physician or other practitioner for

[[Page 41785]]

purposes of Medicare billing and payment, payment is made to the
billing physician or other practitioner under the PFS, and all relevant
Medicare rules apply including, but not limited to, requirements
regarding medical necessity, documentation, and billing. Those
practitioners who can bill Medicare for incident to services are paid
at their applicable Medicare payment rate as if they personally
furnished the service. For example, when incident to services are
billed by a physician, they are paid at 100 percent of the fee schedule
amount, and when the services are billed by a nurse practitioner or
clinical nurse specialist, they are paid at 85 percent of the fee
schedule amount. Payments are subject to the usual deductible and
coinsurance amounts.
In the CY 2014 PFS final rule with comment period, we amended Sec.
410.26 by adding a paragraph (b)(7) to require that, as a condition for
Medicare Part B payment, all incident to services must be furnished in
accordance with applicable state law. Additionally, we amended the
definition of auxiliary personnel at Sec. 410.26(a)(1) to require that
the individual who provides the incident to services must meet any
applicable requirements to provide such services (including licensure)
imposed by the state in which the services are furnished. These
requirements for compliance with applicable state laws apply to any
individual providing incident to services as a means to protect the
health and safety of Medicare beneficiaries in the delivery of health
care services, and to provide the Medicare program with additional
recourse for denying or recovering Part B payment for incident to
services that are not furnished in compliance with state law (78 FR
74410). Revisions to Sec. 410.26(a)(1) and (b)(7) were intended to
clarify the longstanding payment policy of paying only for services
that are furnished in compliance with any applicable state or federal
requirements. The amended regulations also provide the Medicare program
with additional recourse for denying or recovering Part B payment for
incident to services that are not furnished in compliance with
applicable requirements.
2. Billing Physician as the Supervising Physician
In addition to the CY 2014 revisions to the regulations for
incident to services, we believe that additional requirements for
incident to services should be explicitly and unambiguously stated in
the regulations. As described in this proposed rule, incident to a
physician's or other practitioner's professional services means that
the services or supplies are furnished as an integral, although
incidental, part of the physician's or other practitioner's personal
professional services in the course of diagnosis or treatment of an
injury or illness (Sec. 410.26(b)(2)). Incident to services require
direct supervision of the auxiliary personnel providing the service by
the physician or other practitioner (Sec. 410.26(b)(5)).
We are proposing to revise the regulations specifying the
requirements for which physicians or other practitioners can bill for
incident to services. In the CY 2002 PFS final rule, in response to a
comment seeking clarification regarding what physician billing number
should be used on the claim form for an incident to service, at 66 FR
55267, we stated that when a claim is submitted to Medicare under the
billing number of a physician or other practitioner for an `incident
to' service, the physician or other practitioner is stating that he or
she performed the service or directly supervised the auxiliary
personnel performing the service. Accordingly, the Medicare billing
number of the ordering physician or other practitioner should not be
used if that person did not directly supervise the auxiliary personnel.
Section 410.26(b)(5) currently states that the physician (or other
practitioner) supervising the auxiliary personnel need not be the same
physician (or other practitioner) upon whose professional service the
incident to service is based. To be certain that the incident to
services furnished to a beneficiary are in fact an integral, although
incidental, part of the physician's or other practitioner's personal
professional service that is billed to Medicare, we believe that the
physician or other practitioner who bills for the incident to service
must also be the physician or other practitioner who directly
supervises the service. It has been our position that billing
practitioners should have a personal role in, and responsibility for,
furnishing services for which they are billing and receiving payment as
an incident to their own professional services. This is consistent with
the requirements that all physicians and billing practitioners attest
on each Medicare claim that he or she ``personally furnished'' the
services for which he or she is billing. Without this requirement,
there could be an insufficient nexus with the physician's or other
practitioner's services being billed on a claim to Medicare as incident
to services and the actual services being furnished to the Medicare
beneficiary by the auxiliary personnel. Therefore, we are proposing to
amend Sec. 410.26(b)(5) to state that the physician or other
practitioner who bills for incident to services must also be the
physician or other practitioner who directly supervises the auxiliary
personnel who provide the incident to services. Also, to further
clarify the meaning of the proposed amendment to this regulation, we
are proposing to remove the last sentence from Sec. 410.26(b)(5)
specifying that the physician (or other practitioner) supervising the
auxiliary personnel need not be the same physician (or other
practitioner) upon whose professional service the incident to service
is based.
3. Auxiliary Personnel Who Have Been Excluded or Revoked From Medicare
As a condition of Medicare payment, auxiliary personnel who, under
the direct supervision of a physician or other practitioner, provide
incident to services to Medicare beneficiaries must comply with all
applicable Federal and State laws. This includes not having been
excluded from Medicare, Medicaid and all other federally funded health
care programs by the Office of Inspector General. We are proposing to
amend the regulation to explicitly prohibit auxiliary personnel from
providing incident to services who have either been excluded from
Medicare, Medicaid and all other federally funded health care programs
by the Office of Inspector General or who have had their enrollment
revoked for any reason. These excluded or revoked individuals are
already prohibited from providing services to Medicare beneficiaries,
so this proposed revision is an additional safeguard to ensure that
these excluded or revoked individuals are not providing incident to
services and supplies under the direct supervision of a physician or
other authorized supervising practitioner. These proposed revisions to
the incident to regulations will provide the Medicare program with
additional recourse for denying or recovering Part B payment for
incident to services and supplies that are not furnished in compliance
with our program requirements.
4. Compliance and Oversight
We recognize that there are many ways in which compliance with
these requirements could be consistently and fairly assured across the
Medicare program. In considering implementation of these proposals, we
wish to be mindful of the need to minimize or eliminate any
practitioner administrative burden while at the same time ensuring that
practitioners are not subjected to unnecessary audits or

[[Page 41786]]

placed at risk of inadvertent non-compliance. Therefore, while we
believe that the initial responsibility of compliance rests with the
practitioner, we invite comments through this proposed rule about
possible approaches we could take to improve our ability ensure that
incident to services are provided to beneficiaries by qualified
individuals in a manner consistent with Medicare statute and
regulations. We invite commenters to consider the options we will
consider, such as creating new categories of enrollment, implementing a
mechanism for registration short of full enrollment, requiring the use
of claim elements such as modifiers to identify the types of
individuals providing services, or relying on post-payment audits,
investigations and recoupments by CMS contractors such as Recovery
Auditors or Program Integrity Contractors. We will consider these
comments in the course of implementing the proposals we finalize in
rulemaking for CY 2016, and further, if we decide in the future that
additional regulations or guidance will be necessary to monitor
compliance with these or other requirements surrounding incident to
services.

L. Portable X-ray: Billing of the Transportation Fee

Portable X-ray suppliers receive a transportation fee for
transporting portable X-ray equipment to the location where portable X-
rays are taken. If more than one patient at the same location is X-
rayed, the portable X-ray transportation fee is allocated among the
patients. We have received feedback that some portable x-ray suppliers
have been operating under the assumption that the prorated
transportation payment when more than one patient is receiving portable
X-ray services at the same location refers to only a subset of
patients. The Medicare Claims Processing Manual (Pub. 100-4, Chapter
13, Section 90.3) currently states:

Carriers shall allow only a single transportation payment for
each trip the portable X-ray supplier makes to a particular
location. When more than one Medicare patient is X-rayed at the same
location, e.g., a nursing home, prorate the single fee schedule
transportation payment among all patients receiving the services.
For example, if two patients at the same location receive X-rays,
make one-half of the transportation payment for each.

In some jurisdictions, Medicare contractors have been allowing the
portable X-ray transportation fee to be allocated only among Medicare
Part B beneficiaries. In other jurisdictions, Medicare contractors have
required the transportation fee to be allocated among all Medicare
patients (Parts A and B). We believe it would be more appropriate to
allocate the transportation fee among all patients who receive portable
X-ray services in a single trip. Medicare should not pay for more than
its share of the transportation costs for portable X-ray services.
We are proposing to revise the Medicare Claims Processing Manual
(Pub. 100-4, Chapter 13, Section 90.3) to remove the word ``Medicare''
before ``patient'' in section 90.3. We are also proposing to clarify
that this subregulatory guidance means that, when more than one patient
is X-rayed at the same location, the single transportation payment
under the PFS is to be prorated among all patients (Medicare Parts A
and B, and non-Medicare) receiving portable X-ray services during that
trip, regardless of their insurance status.
For example, for portable x-ray services furnished at a SNF, we
believe that the transportation fee should be allocated among all
patients receiving portable X-ray services at the same location in a
single trip irrespective of whether the patient is in a Part A stay, a
Part B patient, or not a Medicare beneficiary at all. If the patient is
in a Part A SNF stay, payment for the allocated portion of the
transportation fee (and the X-ray) would be the SNF's responsibility.
For a privately insured patient, it would be the responsibility of that
patient's insurer. For a Medicare Part B patient, payment would be made
under Part B for the share of the transportation fee attributable to
that patient. We welcome comments on this proposal to determine
Medicare Part B's portion of the transportation payment by prorating
the single fee among all patients.

M. Technical Correction: Waiver of Deductible for Anesthesia Services
Furnished on the Same Date as a Planned Screening Colorectal Cancer
Test

Section 1833(b)(1) of the Act waives the deductible for colorectal
cancer screening tests regardless of the code that is billed for the
establishment of a diagnosis as a result of the test, or the removal of
tissue or other matter or other procedure that is furnished in
connection with, as a result of, and in the same clinical encounter as
the screening test. To implement this statutory provision, we amended
our regulation at Sec. 410.160 to add to the list of services to which
the deductible does not apply, beginning January 1, 2011, a surgical
service furnished in connection with, as a result of, and in the same
clinical encounter as a planned colorectal cancer screening test. A
surgical service furnished in connection with, as a result of, and in
the same clinical encounter as a colorectal cancer screening test means
a surgical service furnished on the same date as a planned colorectal
cancer screening test as described in Sec. 410.37.
In the CY 2015 PFS final rule with comment period, we modified the
regulatory definition of colorectal cancer screening test with regard
to colonoscopies to include anesthesia services whether billed as part
of the colonoscopy service or separately. (See Sec. 410.37(a)(1)(iii)
of our regulations). In the preamble to the final rule, we stated that
the statutory waiver of deductible would apply to anesthesia services
furnished in conjunction with a colorectal cancer screening test even
when a polyp or other tissue is removed during a colonoscopy (79 FR
67731). We also indicated that practitioners should report anesthesia
services with the PT modifier in such circumstances. The final policy
was implemented for services furnished during CY 2015. While we
modified the definition of colorectal cancer screening services in the
regulation at Sec. 410.37(a)(1)(iii) to include anesthesia furnished
with a screening colonoscopy, we did not make a conforming change to
our regulations to expressly reflect the inapplicability of the
deductible to those anesthesia services.
To better reflect our policy in the regulations, we propose a
technical correction to amend Sec. 410.160(b)(8) to expressly
recognize anesthesia services. Specifically, we propose to amend Sec.
410.160(b)(8) to add ``and beginning January 1, 2015, for an anesthesia
service,'' following the first use of the phrase ``a surgical service''
and to add ``or anesthesia'' following the word ``surgical'' each time
it is used in the second sentence of Sec. 410.160(b)(8). This
amendment to our regulation will ensure that both surgical or
anesthesia services furnished in connection with, as a result of, and
in the same clinical encounter as a colorectal cancer screening test
will be exempt from the deductible requirement when furnished on the
same date as a planned colorectal cancer screening test as described in
Sec. 410.37.

[[Page 41787]]

III. Other Provisions of the Proposed Regulations

A. Proposed Provisions associated with the Ambulance Fee Schedule

1. Overview of Ambulance Services
a. Ambulance Services
Under the ambulance fee schedule, the Medicare program pays for
ambulance transportation services for Medicare beneficiaries when other
means of transportation are contraindicated by the beneficiary's
medical condition and all other coverage requirements are met.
Ambulance services are classified into different levels of ground
(including water) and air ambulance services based on the medically
necessary treatment provided during transport.
These services include the following levels of service:

For Ground--
++ Basic Life Support (BLS) (emergency and non-emergency)
++ Advanced Life Support, Level 1 (ALS1) (emergency and non-emergency)
++ Advanced Life Support, Level 2 (ALS2)
++ Paramedic ALS Intercept (PI)
++ Specialty Care Transport (SCT)
For Air--
++ Fixed Wing Air Ambulance (FW)
++ Rotary Wing Air Ambulance (RW)
b. Statutory Coverage of Ambulance Services
Under sections 1834(l) and 1861(s)(7) of the Act, Medicare Part B
(Supplemental Medical Insurance) covers and pays for ambulance
services, to the extent prescribed in regulations, when the use of
other methods of transportation would be contraindicated by the
beneficiary's medical condition.
The House Ways and Means Committee and Senate Finance Committee
Reports that accompanied the 1965 Social Security Amendments suggest
that the Congress intended that--
The ambulance benefit cover transportation services only
if other means of transportation are contraindicated by the
beneficiary's medical condition; and
Only ambulance service to local facilities be covered
unless necessary services are not available locally, in which case,
transportation to the nearest facility furnishing those services is
covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404,
89th Cong., 1st Sess. Pt 1, 43 (1965)).
The reports indicate that transportation may also be provided from
one hospital to another, to the beneficiary's home, or to an extended
care facility.
c. Medicare Regulations for Ambulance Services
Our regulations relating to ambulance services are set forth at 42
CFR part 410, subpart B and 42 CFR part 414, subpart H. Section
410.10(i) lists ambulance services as one of the covered medical and
other health services under Medicare Part B. Therefore, ambulance
services are subject to basic conditions and limitations set forth at
Sec. 410.12 and to specific conditions and limitations included at
Sec. 410.40 and Sec. 410.41. Part 414, subpart H, describes how
payment is made for ambulance services covered by Medicare.
2. Ambulance Extender Provisions
a. Amendment to Section 1834(l)(13) of the Act
Section 146(a) of the MIPPA amended section 1834(l)(13)(A) of the
Act to specify that, effective for ground ambulance services furnished
on or after July 1, 2008 and before January 1, 2010, the ambulance fee
schedule amounts for ground ambulance services shall be increased as
follows:
For covered ground ambulance transports that originate in
a rural area or in a rural census tract of a metropolitan statistical
area, the fee schedule amounts shall be increased by 3 percent.
For covered ground ambulance transports that do not
originate in a rural area or in a rural census tract of a metropolitan
statistical area, the fee schedule amounts shall be increased by 2
percent.
The payment add-ons under section 1834(l)(13)(A) of the Act have
been extended several times. Most recently, section 203(a) of the
Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10,
enacted on April 16, 2015) amended section 1834(l)(13)(A) of the Act to
extend the payment add-ons through December 31, 2017. Thus, these
payment add-ons apply to covered ground ambulance transports furnished
before January 1, 2018. We are proposing to revise Sec.
414.610(c)(1)(ii) to conform the regulations to this statutory
requirement. (For a discussion of past legislation extending section
1834(l)(13) of the Act, please see the CY 2014 PFS final rule with
comment period (78 FR 74438 through 74439)).
This statutory requirement is self-implementing. A plain reading of
the statute requires only a ministerial application of the mandated
rate increase, and does not require any substantive exercise of
discretion on the part of the Secretary.
b. Amendment to Section 1834(l)(12) of the Act
Section 414(c) of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8,
2003) (MMA) added section 1834(l)(12) to the Act, which specified that,
in the case of ground ambulance services furnished on or after July 1,
2004, and before January 1, 2010, for which transportation originates
in a qualified rural area (as described in the statute), the Secretary
shall provide for a percent increase in the base rate of the fee
schedule for such transports. The statute requires this percent
increase to be based on the Secretary's estimate of the average cost
per trip for such services (not taking into account mileage) in the
lowest quartile of all rural county populations as compared to the
average cost per trip for such services (not taking into account
mileage) in the highest quartile of rural county populations. Using the
methodology specified in the July 1, 2004 interim final rule (69 FR
40288), we determined that this percent increase was equal to 22.6
percent. As required by the MMA, this payment increase was applied to
ground ambulance transports that originated in a ``qualified rural
area,'' that is, to transports that originated in a rural area included
in those areas comprising the lowest 25th percentile of all rural
populations arrayed by population density. For this purpose, rural
areas included Goldsmith areas (a type of rural census tract). This
rural bonus is sometimes referred to as the ``Super Rural Bonus'' and
the qualified rural areas (also known as ``super rural'' areas) are
identified during the claims adjudicative process via the use of a data
field included in the CMS-supplied ZIP code file.
The Super Rural Bonus under section 1834(l)(12) of the Act has been
extended several times. Most recently, section 203(b) of the Medicare
Access and CHIP Reauthorization Act of 2015 amended section
1834(l)(12)(A) of the Act to extend this rural bonus through December
31, 2017. Therefore, we are continuing to apply the 22.6 percent rural
bonus described above (in the same manner as in previous years) to
ground ambulance services with dates of service before January 1, 2018
where transportation originates in a qualified rural area. Accordingly,
we are proposing to revise Sec. 414.610(c)(5)(ii) to conform the
regulations to this statutory requirement. (For a discussion of past
legislation extending section 1834(l)(12) of the Act, please see the CY
2014 PFS

[[Page 41788]]

final rule with comment period (78 FR 74439 through 74440)).
This statutory provision is self-implementing. It requires an
extension of this rural bonus (which was previously established by the
Secretary) through December 31, 2017, and does not require any
substantive exercise of discretion on the part of the Secretary.
3. Changes in Geographic Area Delineations for Ambulance Payment
a. Background
In the CY 2015 PFS final rule with comment period (79 FR 67744
through 67750) as amended by the correction issued December 31, 2014
(79 FR 78716 through 78719), we adopted, beginning in CY 2015, the
revised OMB delineations as set forth in OMB's February 28, 2013
bulletin (No. 13-01) and the most recent modifications of the Rural-
Urban Commuting Area (RUCA) codes for purposes of payment under the
ambulance fee schedule. With respect to the updated RUCA codes, we
designated any census tracts falling at or above RUCA level 4.0 as
rural areas. In addition, we stated that none of the super rural areas
would lose their status upon implementation of the revised OMB
delineations and updated RUCA codes. After publication of the CY 2015
PFS final rule with comment period and the correction, we received
feedback and comments from stakeholders expressing concerns about the
implementation of the new geographic area delineations finalized in
that rule (as corrected). In response to these concerns, we are
clarifying our implementation of the revised OMB delineations and the
updated RUCA codes in CY 2015, and reproposing the implementation of
the revised OMB delineations and updated RUCA codes for CY 2016 and
subsequent calendar years. We are requesting public comment on our
proposals, as further discussed in section III A.3.b. of this proposed
rule.
b. Provisions of the Proposed Rule
Under section 1834(l)(2)(C) of the Act, the Secretary is required
to consider appropriate regional and operational differences in
establishing the ambulance fee schedule. Historically, the Medicare
ambulance fee schedule has used the same geographic area designations
as the acute care hospital inpatient prospective payment system (IPPS)
and other Medicare payment systems to take into account appropriate
regional (urban and rural) differences. This use of consistent
geographic standards for Medicare payment purposes provides for
consistency across the Medicare program.
The geographic areas used under the ambulance fee schedule
effective in CY 2007 were based on OMB standards published on December
27, 2000 (65 FR 82228 through 82238), Census 2000 data, and Census
Bureau population estimates for 2007 and 2008 (OMB Bulletin No. 10-02).
For a discussion of OMB's delineation of Core-Based Statistical Areas
(CBSAs) and our implementation of the CBSA definitions under the
ambulance fee schedule, we refer readers to the preamble of the CY 2007
Ambulance Fee Schedule proposed rule (71 FR 30358 through 30361) and
the CY 2007 PFS final rule with comment period (71 FR 69712 through
69716). On February 28, 2013, OMB issued OMB Bulletin No. 13-01, which
established revised delineations for Metropolitan Statistical Areas
(MSAs), Micropolitan Statistical Areas, and Combined Statistical Areas,
and provided guidance on the use of the delineations of these
statistical areas. A copy of this bulletin may be obtained at http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
According to OMB, this bulletin provides the delineations of all
Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan
Statistical Areas, Combined Statistical Areas, and New England City and
Town Areas in the United States and Puerto Rico based on the standards
published on June 28, 2010, in the Federal Register (75 FR 37246-37252)
and Census Bureau data. OMB defines an MSA as a CBSA associated with at
least one urbanized area that has a population of at least 50,000, and
a Micropolitan Statistical Area (referred to in this discussion as a
Micropolitan Area) as a CBSA associated with at least one urban cluster
that has a population of at least 10,000 but less than 50,000 (75 FR
37252). Counties that do not qualify for inclusion in a CBSA are deemed
``Outside CBSAs.'' We note that, when referencing the new OMB
geographic boundaries of statistical areas, we are using the term
``delineations'' consistent with OMB's use of the term (75 FR 37249).
Although the revisions OMB published on February 28, 2013 were not
as sweeping as the changes made when we adopted the CBSA geographic
designations for CY 2007, the February 28, 2013 OMB bulletin did
contain a number of significant changes. For example, there are new
CBSAs, urban counties that became rural, rural counties that became
urban, and existing CBSAs that were split apart. As we stated in the CY
2015 PFS final rule with comment period (79 FR 67745), we reviewed our
findings and impacts relating to the new OMB delineations, and found no
compelling reason to further delay implementation. We stated in the CY
2015 final rule with comment period, and we continue to believe, that
it is important for the ambulance fee schedule to use the latest labor
market area delineations available as soon as reasonably possible to
maintain a more accurate and up-to-date payment system that reflects
the reality of population shifts.
Additionally, in the FY 2015 IPPS final rule (79 FR 49952), we
adopted OMB's revised delineations to identify urban areas and rural
areas for purposes of the IPPS wage index. For the reasons discussed in
this section above, we believe that it would be appropriate to adopt
the same geographic area delineations for use under the ambulance fee
schedule as are used under the IPPS and other Medicare payment systems.
Thus, we are proposing to continue implementation of the new OMB
delineations as described in the February 28, 2013 OMB Bulletin No. 13-
01 for CY 2016 and subsequent CYs to more accurately identify urban and
rural areas for ambulance fee schedule payment purposes. We continue to
believe that the updated OMB delineations more realistically reflect
rural and urban populations, and that the use of such delineations
under the ambulance fee schedule would result in more accurate payment.
Under the ambulance fee schedule, consistent with our current
definitions of urban and rural areas (Sec. 414.605), in CY 2016 and
subsequent CYs, MSAs would continue to be recognized as urban areas,
while Micropolitan and other areas outside MSAs, and rural census
tracts within MSAs (as discussed below in this section), would continue
to be recognized as rural areas. We invite public comments on this
proposal.
In addition to the OMB's statistical area delineations, the current
geographic areas used in the ambulance fee schedule also are based on
rural census tracts determined under the most recent version of the
Goldsmith Modification. These rural census tracts within MSAs are
considered rural areas under the ambulance fee schedule (see Sec.
414.605). For certain rural add-on payments, section 1834(l) of the Act
requires that we use the most recent version of the Goldsmith
Modification to determine rural census tracts within MSAs. In the CY
2007 PFS final rule with comment period (71 FR 69714 through 69716), we
adopted the most recent (at that time) version of the

[[Page 41789]]

Goldsmith Modification, designated as RUCA codes. RUCA codes use
urbanization, population density, and daily commuting data to
categorize every census tract in the country. For a discussion about
RUCA codes, we refer the reader to the CY 2007 PFS final rule with
comment period (71 FR 69714 through 69716) and the CY 2015 PFS final
rule with comment period (79 FR 67745 through 67746). As stated
previously, on February 28, 2013, OMB issued OMB Bulletin No. 13-01,
which established revised delineations for Metropolitan Statistical
Areas, Micropolitan Statistical Areas, and Combined Statistical Areas,
and provided guidance on the use of the delineations of these
statistical areas. Several modifications of the RUCA codes were
necessary to take into account updated commuting data and the revised
OMB delineations. We refer readers to the U.S. Department of
Agriculture's Economic Research Service Web site for a detailed listing
of updated RUCA codes found at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. The updated RUCA code
definitions were introduced in late 2013 and are based on data from the
2010 decennial census and the 2006-2010 American Community Survey.
Information regarding the American Community Survey can be found at
http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. We believe that the most recent RUCA codes provide more
accurate and up-to-date information regarding the rurality of census
tracts throughout the country. Accordingly, we are proposing to
continue to use the most recent modifications of the RUCA codes for CY
2016 and subsequent CYs, to recognize levels of rurality in census
tracts located in every county across the nation, for purposes of
payment under the ambulance fee schedule. If we continue to use the
most recent RUCA codes, many counties that are designated as urban at
the county level based on population would continue to have rural
census tracts within them that would be recognized as rural areas
through our use of RUCA codes.
As we stated in the CY 2015 PFS final rule with comment period (79
FR 67745), the 2010 Primary RUCA codes are as follows:
(1) Metropolitan area core: primary flow with an urbanized area
(UA).
(2) Metropolitan area high commuting: primary flow 30 percent or
more to a UA.
(3) Metropolitan area low commuting: primary flow 10 to 30 percent
to a UA.
(4) Micropolitan area core: primary flow within an Urban Cluster of
10,000 to 49,999 (large UC).
(5) Micropolitan high commuting: primary flow 30 percent or more to
a large UC.
(6) Micropolitan low commuting: primary flow 10 to 30 percent to a
large UC.
(7) Small town core: primary flow within an Urban Cluster of 2,500
to 9,999 (small UC).
(8) Small town high commuting: primary flow 30 percent or more to a
small UC.
(9) Small town low commuting: primary flow 10 to 30 percent to a
small UC.
(10) Rural areas: primary flow to a tract outside a UA or UC.
Based on this classification, and consistent with our current
policy as set forth in the CY 2015 PFS final rule with comment period
(79 FR 67745), we are proposing to continue to designate any census
tracts falling at or above RUCA level 4.0 as rural areas for purposes
of payment for ambulance services under the ambulance fee schedule. As
discussed in the CY 2007 PFS final rule with comment period (71 FR
69715) and the CY 2015 PFS final rule with comment period (79 FR
67745), the Office of Rural Health Policy within the Health Resources
and Services Administration (HRSA) determines eligibility for its rural
grant programs through the use of the RUCA code methodology. Under this
methodology, HRSA designates any census tract that falls in RUCA level
4.0 or higher as a rural census tract. In addition to designating any
census tracts falling at or above RUCA level 4.0 as rural areas, under
the updated RUCA code definitions, HRSA has also designated as rural
census tracts those census tracts with RUCA codes 2 or 3 that are at
least 400 square miles in area with a population density of no more
than 35 people. We refer readers to HRSA's Web site at ftp://ftp.hrsa.gov/ruralhealth/Eligibility2005.pdf for additional
information. Consistent with the HRSA guidelines discussed above and
the policy we adopted in the CY 2015 PFS final rule with comment period
(79 FR 67750), we are proposing for CY 2016 and subsequent CYs, to
designate as rural areas those census tracts that fall at or above RUCA
level 4.0. We continue to believe that this HRSA guideline accurately
identifies rural census tracts throughout the country, and thus would
be appropriate to apply for ambulance fee schedule payment purposes.
Also, consistent with the policy we finalized in the CY 2015 PFS
final rule with comment period (79 FR 67749), we would not designate as
rural areas those census tracts that fall in RUCA levels 2 or 3 that
are at least 400 square miles in area with a population density of no
more than 35 people. We have determined that it is not feasible to
implement this guideline due to the complexities of identifying these
areas at the ZIP code level. We do not have sufficient information
available to identify the ZIP codes that fall in these specific census
tracts. Also, payment under the ambulance fee schedule is based on the
ZIP codes; therefore, if the ZIP code is predominantly metropolitan but
has some rural census tracts, we do not split the ZIP code areas to
distinguish further granularity to provide different payments within
the same ZIP code. We believe that payment for all ambulance
transportation services at the ZIP code level provides for a more
consistent and administratively feasible payment system. For example,
if we were to pay based on ZIP codes for some areas and counties or
census tracts for other areas, there are circumstances where ZIP codes
cross county or census tract borders and where counties or census
tracts cross ZIP code borders. Such overlaps in geographic designations
would complicate our ability to appropriately assign ambulance
transportation services to geographic areas for payment under the
ambulance fee schedule. Therefore, under the ambulance fee schedule, we
would not designate as rural areas those census tracts that fall in
RUCA levels 2 or 3 that are at least 400 square miles in area with a
population density of no more than 35 people.
We invite public comments on our proposals, as discussed in this
proposed rule, to continue to use the updated RUCA codes under the
ambulance fee schedule for CY 2016 and subsequent CYs.
As we stated in the CY 2015 PFS proposed rule (79 FR 40374), the
adoption of the most current OMB delineations and the updated RUCA
codes would affect whether certain areas are recognized as rural or
urban. The distinction between urban and rural is important for
ambulance payment purposes because urban and rural transports are paid
differently. The determination of whether a transport is urban or rural
is based on the point of pick-up for the transport; thus, a transport
is paid differently depending on whether the point of pick-up is in an
urban or a rural area. During claims processing, a geographic
designation of urban, rural, or super rural is assigned to each claim
for an ambulance

[[Page 41790]]

transport based on the point of pick-up ZIP code that is indicated on
the claim.
The continued implementation of the revised OMB delineations and
the updated RUCA codes would continue to affect whether or not
transports would be eligible for rural adjustments under the ambulance
fee schedule statute and regulations. For ground ambulance transports
where the point of pick-up is in a rural area, the mileage rate is
increased by 50 percent for each of the first 17 miles (Sec.
414.610(c)(5)(i)). For air ambulance services where the point of pick-
up is in a rural area, the total payment (base rate and mileage rate)
is increased by 50 percent (Sec. 414.610(c)(5)(i)).
Section 1834(l)(12) of the Act (as amended most recently by section
203(b) of the Medicare Access and CHIP Reauthorization Act of 2015)
specifies that, for services furnished during the period July 1, 2004
through December 31, 2017, the payment amount for the ground ambulance
base rate is increased by a ``percent increase'' (Super Rural Bonus)
where the ambulance transport originates in a ``qualified rural area,''
which is a rural area that we determine to be in the lowest 25th
percentile of all rural populations arrayed by population density (also
known as a ``super rural area''). We implement this Super Rural Bonus
in Sec. 414.610(c)(5)(ii). As discussed in section III.A.2.b. of this
proposed rule, we are proposing to revise Sec. 414.610(c)(5)(ii) to
conform the regulations to this statutory requirement. As we stated in
the CY 2015 PFS proposed rule (79 FR 40374) and final rule with comment
period (79 FR 67746), adoption of the revised OMB delineations and the
updated RUCA codes would have no negative impact on ambulance
transports in super rural areas, as none of the current super rural
areas would lose their status due to the revised OMB delineations and
the updated RUCA codes. Furthermore, under section 1834(l)(13) of the
Act (as amended most recently by section 203(a) of the Medicare Access
and CHIP Reauthorization Act of 2015), for ground ambulance transports
furnished through December 31, 2017, transports originating in rural
areas are paid based on a rate (both base rate and mileage rate) that
is 3 percent higher than otherwise is applicable. (See also Sec.
414.610(c)(1)(ii)). As discussed in section III.A.2.a. of this proposed
rule, we are proposing to revise Sec. 414.610(c)(1)(ii) to conform the
regulations to this statutory requirement.
Similar to our discussion in the CY 2015 PFS proposed rule (79 FR
40374) and final rule with comment period (79 FR 67746), if we continue
to use OMB's revised delineations and the updated RUCA codes for CY
2016 and subsequent CYs, ambulance providers and suppliers that pick up
Medicare beneficiaries in areas that would be Micropolitan or otherwise
outside of MSAs based on OMB's revised delineations or in a rural
census tract of an MSA based on the updated RUCA codes (but were within
urban areas under the geographic delineations in effect in CY 2014)
would continue to experience increases in payment for such transports
(as compared to the CY 2014 geographic delineations) because they may
be eligible for the rural adjustment factors discussed above in this
section. In addition, those ambulance providers and suppliers that pick
up Medicare beneficiaries in areas that would be urban based on OMB's
revised delineations and the updated RUCA codes (but were previously in
Micropolitan Areas or otherwise outside of MSAs, or in a rural census
tract of an MSA under the geographic delineations in effect in CY 2014)
would continue to experience decreases in payment for such transports
(as compared to the CY 2014 geographic delineations) because they would
no longer be eligible for the rural adjustment factors discussed above
in this section.
The continued use of the revised OMB delineations and the updated
RUCA codes for CY 2016 and subsequent CYs would mean the continued
recognition of urban and rural boundaries based on the population
migration that occurred over a 10-year period, between 2000 and 2010.
As discussed above in this section, we are proposing to continue to use
the updated RUCA codes to identify rural census tracts within MSAs,
such that any census tracts falling at or above RUCA level 4.0 would
continue to be designated as rural areas. In order to determine which
ZIP codes are included in each such rural census tract, we are
proposing to continue to use the ZIP code approximation file developed
by HRSA. This file includes the 2010 RUCA code designation for each ZIP
code and can be found at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx. If ZIP codes are added over time to
the USPS ZIP code file (and thus are not included in the 2010 ZIP code
approximation file provided to us by HRSA) or if ZIP codes are revised
over time, we would determine the appropriate urban/rural designation
for such ZIP code based on any updates provided on the HRSA and OMB Web
sites, located at http://www.ers.usda.gov/data-products/rural-urban-commuting-area-codes.aspx and http://www.whitehouse.gov/sites/default/files/omb/bulletins/2013/b-13-01.pdf.
Based on the April 2015 USPS ZIP code file that we are using in
this proposed rule to assess the impacts of the revised geographic
delineations, there are a total of 42,925 ZIP codes in the U.S. Table
16 sets forth an analysis of the number of ZIP codes that changed
urban/rural status in each U.S. state and territory after CY 2014 due
to our implementation of the revised OMB delineations and the updated
RUCA codes beginning in CY 2015, using the April 2015 USPS ZIP code
file, the revised OMB delineations, and the updated RUCA codes
(including the RUCA ZIP code approximation file discussed above). Based
on this data, the geographic designations for approximately 95.22
percent of ZIP codes are unchanged by OMB's revised delineations and
the updated RUCA codes. Similar to the analysis set forth in the CY
2015 PFS final rule with comment period, as corrected (79 FR 78716
through 78719), as reflected in Table 16, more ZIP codes have changed
from rural to urban (1,600 or 3.73 percent) than from urban to rural
(451 or 1.05 percent). In general, it is expected that ambulance
providers and suppliers in 451 ZIP codes within 42 states, may continue
to experience payment increases under the revised OMB delineations and
the updated RUCA codes, as these areas have been redesignated from
urban to rural. The state of Ohio has the most ZIP codes that changed
from urban to rural with a total of 54, or 3.63 percent. Ambulance
providers and suppliers in 1,600 ZIP codes within 44 states and Puerto
Rico may continue to experience payment decreases under the revised OMB
delineations and the updated RUCA codes, as these areas have been
redesignated from rural to urban. The state of West Virginia has the
most ZIP codes that changed from rural to urban (149 or 15.92 percent).
As discussed above, these findings are illustrated in Table 16.

[[Page 41791]]

Table 16--ZIP Code Analysis Based on OMB's Revised Delineations and Updated RUCA Codes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percentage of
Total ZIP Total ZIP Percentage of Total ZIP Percentage of Total ZIP total ZIP
State/Territory * codes codes changed total ZIP codes changed total ZIP codes not codes not
rural to urban codes urban to rural codes changed changed
--------------------------------------------------------------------------------------------------------------------------------------------------------
AK...................................... 276 0 0.00 0 0.00 276 100.00
AL...................................... 854 43 5.04 8 0.94 803 94.03
AR...................................... 725 19 2.62 9 1.24 697 96.14
AS...................................... 1 0 0.00 0 0.00 1 100.00
AZ...................................... 569 21 3.69 7 1.23 541 95.08
CA...................................... 2723 85 3.12 43 1.58 2595 95.30
CO...................................... 677 4 0.59 9 1.33 664 98.08
CT...................................... 445 37 8.31 0 0.00 408 91.69
DC...................................... 303 0 0.00 0 0.00 303 100.00
DE...................................... 99 6 6.06 0 0.00 93 93.94
EK...................................... 63 0 0.00 0 0.00 63 100.00
EM...................................... 857 35 4.08 4 0.47 818 95.45
FL...................................... 1513 69 4.56 9 0.59 1435 94.84
FM...................................... 4 0 0.00 0 0.00 4 100.00
GA...................................... 1032 47 4.55 4 0.39 981 95.06
GU...................................... 21 0 0.00 0 0.00 21 100.00
HI...................................... 143 9 6.29 3 2.10 131 91.61
IA...................................... 1080 20 1.85 3 0.28 1057 97.87
ID...................................... 335 0 0.00 0 0.00 335 100.00
IL...................................... 1629 68 4.17 7 0.43 1554 95.40
IN...................................... 1000 33 3.30 20 2.00 947 94.70
KY...................................... 1030 30 2.91 5 0.49 995 96.60
LA...................................... 739 69 9.34 1 0.14 669 90.53
MA...................................... 751 8 1.07 9 1.20 734 97.74
MD...................................... 630 69 10.95 0 0.00 561 89.05
ME...................................... 505 5 0.99 12 2.38 488 96.63
MH...................................... 2 0 0.00 0 0.00 2 100.00
MI...................................... 1185 22 1.86 21 1.77 1142 96.37
MN...................................... 1043 31 2.97 7 0.67 1005 96.36
MP...................................... 3 0 0.00 0 0.00 3 100.00
MS...................................... 541 14 2.59 1 0.18 526 97.23
MT...................................... 411 0 0.00 3 0.73 408 99.27
NC...................................... 1102 87 7.89 10 0.91 1005 91.20
ND...................................... 419 2 0.48 0 0.00 417 99.52
NE...................................... 632 7 1.11 6 0.95 619 97.94
NH...................................... 292 0 0.00 2 0.68 290 99.32
NJ...................................... 748 1 0.13 2 0.27 745 99.60
NM...................................... 438 4 0.91 2 0.46 432 98.63
NV...................................... 257 1 0.39 2 0.78 254 98.83
NY...................................... 2246 84 3.74 42 1.87 2120 94.39
OH...................................... 1487 23 1.55 54 3.63 1410 94.82
OK...................................... 791 5 0.63 7 0.88 779 98.48
OR...................................... 496 26 5.24 9 1.81 461 92.94
PA...................................... 2244 129 5.75 38 1.69 2077 92.56
PR...................................... 177 21 11.86 0 0.00 156 88.14
PW...................................... 2 0 0.00 0 0.00 2 100.00
RI...................................... 91 2 2.20 1 1.10 88 96.70
SC...................................... 544 47 8.64 2 0.37 495 90.99
SD...................................... 418 0 0.00 1 0.24 417 99.76
TN...................................... 814 52 6.39 12 1.47 750 92.14
TX...................................... 2726 64 2.35 32 1.17 2630 96.48
UT...................................... 360 2 0.56 0 0.00 358 99.44
VA...................................... 1277 98 7.67 19 1.49 1160 90.84
VI...................................... 16 0 0.00 0 0.00 16 100.00
VT...................................... 309 3 0.97 0 0.00 306 99.03
WA...................................... 744 17 2.28 6 0.81 721 96.91
WI...................................... 919 19 2.07 5 0.54 895 97.39
WK...................................... 711 11 1.55 7 0.98 693 97.47
WM...................................... 342 2 0.58 3 0.88 337 98.54
WV...................................... 936 149 15.92 3 0.32 784 83.76
WY...................................... 198 0 0.00 1 0.51 197 99.49
---------------------------------------------------------------------------------------------------------------
TOTALS.............................. 42,925 1600 3.73 451 1.05 40,874 95.22
--------------------------------------------------------------------------------------------------------------------------------------------------------
* ZIP code analysis includes U.S. States and Territories (FM--Federated States of Micronesia, GU--Guam, MH--Marshall Islands, MP--Northern Mariana
Islands, PW--Palau, AS--American Samoa; VI--Virgin Islands; PR--Puerto Rico). Missouri is divided into east and west regions due to work distribution
of the Medicare Administrative Contractors (MACs): EM--East Missouri, WM--West Missouri. Johnson and Wyandotte counties in Kansas were changed as of
January 2010 to East Kansas (EK) and the rest of the state is West Kansas (WK).

[[Page 41792]]

For more detail on the impact of our proposals, in addition to
Table 16, the following files are available through the Internet on the
Ambulance Fee Schedule Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AmbulanceFeeSchedule/index.html: ZIP
Codes By State Changed From Urban To Rural: ZIP Codes By State Changed
From Rural To Urban: List of ZIP Codes With RUCA Code Designations: and
Complete List of ZIP Codes.
As discussed in the CY 2015 PFS final rule with comment period (79
FR 67750), we believe the most current OMB statistical area
delineations, coupled with the updated RUCA codes, more accurately
reflect the contemporary urban and rural nature of areas across the
country, and thus we believe the use of the most current OMB
delineations and RUCA codes under the ambulance fee schedule will
enhance the accuracy of ambulance fee schedule payments. As we
discussed in the CY 2015 PFS final rule with comment period (79 FR
67750), we considered, as alternatives, whether it would be appropriate
to delay the implementation of the revised OMB delineations and the
updated RUCA codes, or to phase in the implementation of the new
geographic delineations over a transition period for those ZIP codes
losing rural status. We determined that it would not be appropriate to
implement a delay or a transition period for the revised geographic
delineations for the reasons set forth in the CY 2015 PFS final rule.
Similarly, we considered whether a delay in implementation or a
transition period would be appropriate for CY 2016 and subsequent CYs.
We continue to believe that it is important to use the most current OMB
delineations and RUCA codes available as soon as reasonably possible to
maintain a more accurate and up-to-date payment system that reflects
the reality of population shifts. Because we believe the revised OMB
delineations and updated RUCA codes more accurately identify urban and
rural areas and enhance the accuracy of the Medicare ambulance fee
schedule, we do not believe a delay in implementation or a transition
period would be appropriate for CY 2016 and subsequent CYs. Areas that
have lost their rural status and become urban have become urban because
of recent population shifts. We believe it is important to base payment
on the most accurate and up-to-date geographic area delineations
available. Furthermore, we believe a delay in implementation of the
revised OMB delineations and the updated RUCA codes would be a
disadvantage to the ambulance providers or suppliers experiencing
payment increases based on these updated and more accurate OMB
delineations and RUCA codes. Thus, we are not proposing a delay in
implementation or a transition period for the revised OMB delineations
and updated RUCA codes for CY 2016 and subsequent CYs.
We invite public comments on our proposals to continue
implementation of the revised OMB delineations as set forth in OMB's
February 28, 2013 bulletin (No. 13-01) and the most recent
modifications of the RUCA codes as discussed above for CY 2016 and
subsequent CYs for purposes of payment under the ambulance fee
schedule. In addition, we invite public comments on any alternative
methods for implementing the revised OMB delineations and the updated
RUCA codes.
4. Proposed Changes to the Ambulance Staffing Requirement
Under section 1861(s)(7) of the Act, Medicare Part B covers
ambulance services when the use of other methods of transportation is
contraindicated by the individual's medical condition, but only to the
extent provided in regulations. Section 410.41(b)(1) requires that a
vehicle furnishing ambulance services at the Basic Life Support (BLS)
level must be staffed by at least two people, one of whom must meet the
following requirements: (1) be certified as an emergency medical
technician by the state or local authority where the services are
furnished, and (2) be legally authorized to operate all lifesaving and
life-sustaining equipment on board the vehicle.
Section 410.41(b)(2) states that, for vehicles furnishing ambulance
services at the Advanced Life Support (ALS) level, ambulance providers
and suppliers must meet the staffing requirements for vehicles
furnishing services at the BLS level. In addition, one of the two staff
members must be certified as a paramedic or an emergency medical
technician, by the state or local authority where the services are
being furnished, to perform one or more ALS services. These staffing
requirements are further explained in the Medicare Benefit Policy
Manual (Pub. No. 100-02), Chapter 10 (see sections 10.1.2 and 30.1.1)
In its July 24, 2014 Management Implication Report, 13-0006,
entitled ``Medicare Requirements for Ambulance Crew Certification,''
the Office of Inspector General (OIG) discussed its investigation of
ambulance suppliers in a state that requires a higher level of training
than Medicare requires for ambulance staff. In some instances, OIG
found that second crew members: (1) possessed a lower level of training
than required by state law, or (2) had purchased or falsified
documentation to establish their credentials. The OIG expressed its
concern that our current regulations and manual provisions do not set
forth licensure or certification requirements for the second crew
member. The OIG was informed by federal prosecutors that prosecuting
individuals who had purchased or falsified documentation to establish
their credentials would be difficult because Medicare had no
requirements regarding the second ambulance staff member and the
ambulance transports complied with the relevant Medicare regulations
and manual provisions for ambulance staffing.
The OIG recommended that Medicare revise its regulations and manual
provisions related to ambulance staffing to parallel the standard used
for vehicle requirements at Sec. 410.41(a), which requires that
ambulances be equipped in ways that comply with state and local laws.
Specifically, the OIG recommended that our regulation and manual
provisions addressing ambulance vehicle staffing should indicate that,
for Medicare to cover ambulance services furnished to a Medicare
beneficiary, the ambulance crew must meet the requirements currently
set forth in Sec. 410.41(b) or the state and local requirements,
whichever are more stringent. Currently, Sec. 410.41(b) does not
require that ambulance vehicle staff comply with all applicable state
and local laws. We agree with OIG's concerns and believe that requiring
ambulance staff to also comply with state and local requirements would
enhance the quality and safety of ambulance services furnished to
Medicare beneficiaries.
Accordingly, we are proposing to revise Sec. 410.41(b) to require
that all Medicare-covered ambulance transports must be staffed by at
least two people who meet both the requirements of applicable state and
local laws where the services are being furnished, and the current
Medicare requirements under Sec. 410.41(b). We believe that this
would, in effect, require both of the required ambulance vehicle staff
to also satisfy any applicable state and local requirements that may be
more stringent than those currently set forth at Sec. 410.41(b),
consistent with OIG's recommendation. In addition, we are proposing to
revise the definition of Basic Life Support (BLS) in Sec. 414.605 to
include the proposed revised staffing requirements discussed above for

[[Page 41793]]

Sec. 410.41(b). These proposed revisions to Sec. 410.41(b) and Sec.
414.605 would account for differences in individual state or local
staffing and licensure requirements, better accommodating state or
local laws enacted to ensure beneficiaries' health and safety.
Likewise, these proposed revisions would strengthen the federal
government's ability to prosecute violations associated with such
requirements and recover inappropriately or fraudulently received funds
from ambulance companies found to be operating in violation of state or
local laws. Furthermore, as discussed above, we believe that these
proposals would enhance the quality and safety of ambulance services
provided to Medicare beneficiaries.
In addition, we are proposing to revise Sec. 410.41(b) and the
definition of Basic Life Support (BLS) in Sec. 414.605 to clarify
that, for BLS vehicles, at least one of the staff members must be
certified at a minimum as an emergency medical technician-basic (EMT-
Basic), which we believe would more clearly state our current policy.
Currently, these regulations require that, for BLS vehicles, one staff
member be certified as an EMT (Sec. 410.41(b)) or EMT-Basic (Sec.
414.605). These proposed revisions to the regulations do not change our
current policy, but clarify that one of the BLS vehicle staff members
must be certified at the minimum level of EMT-Basic, but may also be
certified at a higher level, for example, EMT-intermediate or EMT
paramedic.
Finally, we are proposing to revise the definition of Basic Life
Support (BLS) in Sec. 414.605 to delete the last sentence, which sets
forth examples of certain state law provisions. This sentence (``For
example, only in some states is an EMT-Basic permitted to operate
limited equipment on board the vehicle, assist more qualified personnel
in performing assessments and interventions, and establish a peripheral
intravenous (IV) line''), has been included in the definition of BLS
since the ambulance fee schedule was finalized in 2002 (67 FR 9100,
Feb. 27, 2002). Because state laws may change over the course of time,
we are concerned that this sentence may not accurately reflect the
status of the relevant state laws over time. Therefore, we are
proposing to delete the last sentence of this definition. Furthermore,
we do not believe that the examples set forth in this sentence are
necessary to convey the definition of BLS for Medicare coverage and
payment purposes.
We invite public comments on our proposals to revise the ambulance
vehicle staffing requirements in Sec. 410.41(b) and Sec. 414.605 as
discussed above. If we finalize these proposals, we will revise our
manual provisions addressing ambulance vehicle staffing as appropriate,
consistent with our finalized policy.

B. Chronic Care Management (CCM) Services for Rural Health Clinics
(RHCs) and Federally Qualified Health Centers (FQHCs)

1. Background
a. Primary Care and Care Coordination
Over the last several years, we have been increasing our focus on
primary care, and have explored ways in which care coordination can
improve health outcomes and reduce expenditures.
In the CY 2012 PFS proposed rule (76 FR 42793 through 42794, and
42917 through 42920), and the CY 2012 PFS final rule (76 FR 73063
through 73064), we discussed how primary care services have evolved to
focus on preventing and managing chronic disease, and how refinements
for payment for post-discharge care management services could improve
care management for a beneficiary's transition from the hospital to the
community setting. We acknowledged that the care coordination included
in services such as office visits does not always describe adequately
the non-face-to-face care management work involved in primary care and
may not reflect all the services and resources required to furnish
comprehensive, coordinated care management for certain categories of
beneficiaries, such as those who are returning to a community setting
following discharge from a hospital or skilled nursing facility (SNF)
stay. We initiated a public discussion on primary care and care
coordination services, and stated that we would consider payment
enhancements in future rulemaking as part of a multiple year strategy
exploring the best means to encourage primary care and care
coordination services.
In the CY 2013 PFS proposed rule (77 FR 44774 through 44775), we
noted several initiatives and programs designed to improve payment for,
and encourage long-term investment in, care management services. These
include the Medicare Shared Savings Program; testing of the Pioneer
Accountable Care Organization (ACO) and the Advance Payment ACO model;
the Primary Care Incentive Payment (PCIP) Program; the patient-centered
medical home model in the Multi-payer Advanced Primary Care Practice
(MAPCP) Demonstration; the Federally Qualified Health Center (FQHC)
Advanced Primary Care Practice demonstration; the Comprehensive Primary
Care (CPC) initiative; and the HHS Strategic Framework on Multiple
Chronic Conditions. We also noted that we were monitoring the progress
of the AMA Chronic Care Coordination Workgroup in developing codes to
describe care transition and care coordination activities, and proposed
refinement of the PFS payment for post discharge care management
services.
In the CY 2013 PFS final rule (77 FR 68978 through 68994), we
finalized policies for payment of Transitional Care Management (TCM)
services, effective January 1, 2013. We adopted two CPT codes (99495
and 99496) to report physician or qualifying nonphysician practitioner
care management services for a patient following a discharge from an
inpatient hospital or SNF, an outpatient hospital stay for observation
or partial hospitalization services, or partial hospitalization in a
community mental health center. As a condition for receiving TCM
payment, a face-to-face visit was required.
In the CY 2014 PFS proposed rule (78 FR 43337 through 43343), we
proposed to establish separate payment under the PFS for chronic care
management (CCM) services and proposed a scope of services and
requirements for billing and supervision. In the CY 2014 PFS final rule
(78 74414 through 74427), we finalized policies to establish separate
payment under the PFS for CCM services furnished to patients with
multiple chronic conditions that are expected to last at least 12
months or until the death of the patient, and that place the patient at
significant risk of death, acute exacerbation/decompensation, or
functional decline. In the CY 2015 PFS final rule (79 FR 67715 through
67730), additional billing requirements were finalized, including the
requirement to furnish CCM services using a certified electronic health
record or other electronic technology. Payment for CCM services was
effective beginning on January 1, 2015, for physicians billing under
the PFS.
b. RHC and FQHC Payment Methodologies
A RHC or FQHC visit must be a face-to-face encounter between the
patient and a RHC or FQHC practitioner (physician, nurse practitioner,
physician assistant, certified nurse midwife, clinical psychologist, or
clinical social worker, and under certain conditions, an RN or LPN
furnishing care to a homebound RHC or FQHC patient) during which time
one or more RHC or FQHC services are furnished. A TCM service can also
be a RHC or FQHC visit. A Diabetes Self-Management Training

[[Page 41794]]

(DSMT) service or a Medical Nutrition Therapy (MNT) service furnished
by a certified DSMT or MNT provider may also be a FQHC visit.
RHCs are paid an all-inclusive rate (AIR) for medically-necessary
medical and mental health services, and qualified preventive health
services furnished on the same day (with some exceptions). In general,
the A/B MAC calculates the AIR for each RHC by dividing total allowable
costs by the total number of visits for all patients. Productivity,
payment limits, and other factors are also considered in the
calculation. Allowable costs must be reasonable and necessary and may
include practitioner compensation, overhead, equipment, space,
supplies, personnel, and other costs incident to the delivery of RHC
services. The AIR is subject to a payment limit, except for those RHCs
that have an exception to the payment limit. Services furnished
incident to a RHC professional service are included in the per-visit
payment and are not billed separately.
FQHCs have also been paid under the AIR methodology; however, on
October 1, 2014, FQHCs began to transition to a FQHC PPS system in
which they are paid based on the lesser of a national encounter-based
rate or their total adjusted charges. The FQHC PPS rate is adjusted for
geographic differences in the cost of services by the FQHC geographic
adjustment factor. It is also increased by 34 percent when a FQHC
furnishes care to a patient that is new to the FQHC or to a beneficiary
receiving an Initial Preventive Physical Examination (IPPE) or an
Annual Wellness Visit (AWV). Both the AIR and FQHC PPS payment rates
were designed to reflect all the services that a RHC or FQHC furnishes
in a single day, regardless of the length or complexity of the visit or
the number or type of practitioners seen.
c. Payment for CCM Services
To address the concern that the non-face-to-face care management
work involved in furnishing comprehensive, coordinated care management
for certain categories of beneficiaries is not adequately paid for as
part of an office visit, beginning on January 1, 2015, practitioners
billing under the PFS are paid separately for CCM services under CPT
code 99490 when CCM service requirements are met.
RHCs and FQHCs cannot bill under the PFS for RHC or FQHC services
and individual practitioners working at RHCs and FQHCs cannot bill
under the PFS for RHC or FQHC services while working at the RHC or
FQHC. While many RHCs and FQHCs coordinate services within their own
facilities, and may sometimes help to coordinate services outside their
facilities, the type of structured care management services that are
now payable under the PFS for patients with multiple chronic
conditions, particularly for those who are transitioning from a
hospital or SNF back into their communities, are not included in the
RHC or FQHC payment. This proposed rule proposes to provide an
additional payment for the costs of CCM services that are not already
captured in the RHC AIR or the FQHC PPS payment, beginning on January
1, 2016. Services that are currently being furnished and paid under the
RHC AIR or FQHC PPS payment methodology will not be affected by the
ability of the RHC or FQHC to receive payment for additional services
that are not included in the RHC AIR or FQHC PPS.
d. Solicitation of Comments on Payment for CCM Services in RHCs and
FQHCs
In the May 2, 2014 ``Medicare Program: Prospective Payment System
for Federally Qualified Health Centers; Changes to Contracting Policies
for Rural Health Clinics; and Changes to Clinical Laboratory
Improvement Amendments of 1988 Enforcement Actions for Proficiency
Testing Referral; Final Rule'' (79 FR 25447), we discussed ways to
achieve the Affordable Care Act goal of furnishing integrated and
coordinated services, and specifically noted the CCM services program
beginning in 2015 for physicians billing under the PFS. We encouraged
RHCs and FQHCs to review the CCM services information in the CY 2014
PFS final rule with comment period and submit comments to us on how the
CCM services payment could be adapted for RHCs and FQHCs to promote
integrated and coordinated care in RHCs and FQHCs.
All of the comments we received in response to this request were
strongly supportive of payment to RHCs and FQHCs for CCM services. Some
commenters were concerned that the requirements for electronic exchange
of information and interoperability with other providers would be
difficult for some entities, and that some patients do not have the
resources to receive secure messages via the internet. One commenter
suggested that the additional G-codes for CCM services should be
sufficient to cover the associated costs of documenting care
coordination in FQHCs, and another commenter suggested that we develop
a risk-adjusted CCM services fee. We also received subsequent
recommendations from the National Association of Rural Health Clinics
on various payment options for CCM services in RHCs. These comments
were very helpful in forming the basis for this proposal, and we thank
the commenters for their comments.
2. Proposed Payment Methodology and Billing for CCM Services in RHCs
and FQHCs
a. Proposed Payment Methodology and Billing Requirements
The requirements we are proposing for RHCs and FQHCs to receive
payment for CCM services are consistent with those finalized in the CY
2015 PFS final rule with comment period for practitioners billing under
the PFS and are summarized in Table 17. We propose to establish
payment, beginning on January 1, 2016, for RHCs and FQHCs who furnish a
minimum of 20 minutes of qualifying CCM services during a calendar
month to patients with multiple (two or more) chronic conditions that
are expected to last at least 12 months or until the death of the
patient, and that place the patient at significant risk of death, acute
exacerbation/decompensation, or functional decline. The CPT code
descriptor sets forth the eligibility guidelines for CCM services and
will serve as the basis for potential medical review. In accordance
with both the CPT instructions and Medicare policy, only one
practitioner can bill this code per month, and there are restrictions
regarding the billing of other overlapping care management services
during the same service period. The following section discusses these
aspects of our proposal in more detail and additional information will
be communicated in subregulatory guidance.
We propose that a RHC or FQHC can bill for CCM services furnished
by, or incident to, a RHC or FQHC physician, nurse practitioner,
physician assistant, or certified nurse midwife for a RHC or FQHC
patient once per month, and that only one CCM payment per beneficiary
per month can be paid. If another practice furnishes CCM services to a
beneficiary, the RHC or FQHC cannot bill for CCM services for the same
beneficiary for the same service period. We also propose that TCM and
any other program that provides additional payment for care management
services (outside of the RHC AIR or FQHC PPS payment) cannot be billed
during the same service period.
For purposes of meeting the minimum 20-minute requirement, the RHC
or FQHC could count the time of only one practitioner or auxiliary
staff (for example, a nurse, medical assistant, or

[[Page 41795]]

other individual working under the supervision of a RHC or FQHC
physician or other practitioner) at a time, and could not count
overlapping intervals such as when two or more RHC or FQHC
practitioners are meeting about the patient. Only conversations that
fall under the scope of CCM services would be included towards the time
requirement.
We noted that for billing under the PFS, the care coordination
included in services such as office visits do not always describe
adequately the non-face-to-face care management work involved in
primary care. We also noted that payment for office visits may not
reflect all the services and resources required to furnish
comprehensive, coordinated care management for certain categories of
beneficiaries, such as those who are returning to a community setting
following discharge from a hospital or SNF stay. In considering CCM
payment for RHCs and FQHCs, we believe that the non-face-to-face time
required to coordinate care is also not captured in the RHC AIR or the
FQHC PPS payment, particularly for the rural and/or low-income
populations served by RHCs and FQHCs. Allowing separate payment for CCM
services in RHCs and FQHCs is intended to reflect the additional
resources necessary for the unique services that are required in order
to furnish CCM services that are not already captured in the RHC AIR or
the FQHC PPS payment.
We propose that payment for CCM services be based on the PFS
national average non-facility payment rate when CPT code 99490 is
billed alone or with other payable services on a RHC or FQHC claim.
(For the first quarter of 2015, the national average payment rate is
$42.91 per beneficiary per calendar month.) CCM payment to RHCs and
FQHCs would be based on the PFS amount, but would be paid as part of
the RHC and FQHC benefit, using the CPT code to identify that the
requirements for payment are met and a separate payment should be made.
We also propose to waive the RHC and FQHC face-to-face requirements
when CCM services are furnished to a RHC or FQHC patient. Coinsurance
would be applied as applicable to FQHC claims, and coinsurance and
deductibles would apply as applicable to RHC claims. RHCs and FQHCs
would continue to be required to meet the RHC and FQHC Conditions of
Participation and any additional RHC or FQHC payment requirements. We
intend to provide detailed billing instructions in subregulatory
guidance following publication of a final rule.
b. Other Options Considered
We considered adding CCM services as a RHC or FQHC covered stand-
alone service and removing the RHC/FQHC policy requiring a face-to-face
visit requirement for this service. Under this option, payment for RHCs
would be at the AIR, payment for FQHCs would be the lesser of total
charges or the PPS rate, and if CCM services are furnished on the same
day as another payable medical visit, only one visit would be paid. We
are not proposing this payment option because it would result in a
significant overpayment if no other services were furnished on the same
day, and would result in no additional payment if furnished on the same
day as another medical visit.
We also considered allowing RHCs and FQHCs to carve out CCM
services and bill them separately to the PFS. We are not proposing this
payment option because CCM services are a RHC and FQHC service and only
non-RHC/FQHC services can be billed through the PFS.
We also considered developing a modifier that could be added to the
claim for additional payment when CCM services are furnished. We are
not proposing this option because it would require that payment for CCM
services be made only when furnished along with a billable service that
qualifies as an RHC or FQHC service.
We also considered establishing payment for CCM costs on a
reasonable cost basis though the cost report. We are not proposing this
option because payment for CCM services through the cost report would
complicate coinsurance and/or deductible accountability, whereas it is
more administratively feasible to apply coinsurance and/or deductible
on a RHC/FQHC claim, as applicable. For example, section 1833(a)(3) of
the Act specifies that influenza and pneumococcal vaccines and their
administration are exempt from payment at 80 percent of reasonable
costs and payment to RHCs and FQHCs for such services is at 100 percent
of reasonable cost. Since influenza and pneumococcal vaccines and their
administration are not subject to copayment, it is administratively
feasible to pay these services through the cost report.
3. Proposed Requirements for CCM Payment in RHCs and FQHCs
a. Proposed Beneficiary Eligibility for CCM Services
Consistent with beneficiary eligibility requirements under the PFS,
we propose that RHCs and FQHCs receive payment for furnishing CCM
services to patients with multiple chronic conditions that are expected
to survive at least 12 months or until the death of the patient, and
that place the patient at significant risk of death, acute
exacerbation/decompensation, or functional decline. RHCs and FQHCs are
encouraged to focus on patients with high acuity and high risk when
furnishing CCM services to eligible patients, including those who are
returning to a community setting following discharge from a hospital or
SNF.
b. Proposed Beneficiary Agreement Requirements
Not all patients who are eligible for separately payable CCM
services may necessarily want these services to be provided, and some
patients who receive CCM services may wish to discontinue them. A
beneficiary who declines to receive CCM services from the RHC or FQHC,
or who accepts the services and then chooses to revoke his/her
agreement, would continue to be able to receive care from the RHC or
FQHC and receive any care management services that are currently being
furnished under the RHC AIR or FQHC PPS payment system.
Consistent with beneficiary notification and consent requirements
under the PFS, we propose that the following requirements be met before
the RHC or FQHC can furnish or bill for CCM services:
The eligible beneficiary must be informed about the
availability of CCM services from the RHC or FQHC and provide his or
her written agreement to have the services provided, including the
electronic communication of the patient's information with other
treating providers as part of care coordination. This would include a
discussion with the patient about what CCM services are, how they
differ from any care management services the RHC or FQHC currently
offers, how these services are accessed, how the patient's information
will be shared among others, that a non RHC or FQHC cannot furnish or
bill for CCM services during the same calendar month that the RHC or
FQHC furnishes CCM services, the applicability of coinsurance even when
CCM services are not delivered face-to-face in the RHC or FQHC, and
that any care management services that are currently provided will
continue even if the patient does not agree to have CCM services
provided.
The RHC or FQHC must document in the patient's medical
record that all of the CCM services were explained and offered to the
patient, and note the patient's decision to accept these services.

[[Page 41796]]

At the time the agreement is obtained, the eligible
beneficiary must be informed that the agreement for CCM services could
be revoked by the beneficiary at any time either verbally or in
writing, and the RHC or FQHC practitioner must explain the effect of a
revocation of the agreement for CCM services. If the revocation occurs
during a CCM 30-day period, the revocation would be effective at the
end of that period. The eligible beneficiary must also be informed that
the RHC or FQHC is able to be separately paid for these services during
the 30-day period only if no other practitioner or eligible entity,
including another RHC or FQHC that is not part of the RHC's or FQHC's
organization, has already billed for this service. Since only one CCM
payment can be paid per beneficiary per month, the RHC or FQHC would
need to ask the patient if they are already receiving CCM services from
another practitioner. Revocation by the beneficiary of the agreement
must also be noted by recording the date of the revocation in the
beneficiary's medical record and by providing the beneficiary with
written confirmation that the RHC or FQHC would not be providing CCM
services beyond the current 30-day period. A beneficiary who has
revoked the agreement for CCM services from a RHC or FQHC may choose
instead to receive these services from a different practitioner
(including another RHC or FQHC), beginning at the conclusion of the 30-
day period.
The RHC or FQHC must provide a written or electronic copy
of the care plan to the beneficiary and record this in the
beneficiary's electronic medical record.
c. Proposed Scope of CCM Services in RHCs and FQHCs
We propose that all of the following scope of service requirements
must be met to bill for CCM services:
Initiation of CCM services during a comprehensive
Evaluation/Management (E/M), AWV, or IPPE visit. The time spent
furnishing these services would not be included in the 20 minute
monthly minimum required for CCM billing.
Continuity of care with a designated RHC or FQHC
practitioner with whom the patient is able to get successive routine
appointments.
Care management for chronic conditions, including
systematic assessment of a patient's medical, functional, and
psychosocial needs; system-based approaches to ensure timely receipt of
all recommended preventive care services; medication reconciliation
with review of adherence and potential interactions; and oversight of
patient self-management of medications.
A patient-centered plan of care document created by the
RHC or FQHC practitioner furnishing CCM services in consultation with
the patient, caregiver, and other key practitioners treating the
patient to assure that care is provided in a way that is congruent with
patient choices and values. The plan would be a comprehensive plan of
care for all health issues based on a physical, mental, cognitive,
psychosocial, functional and environmental (re)assessment and an
inventory of resources and supports. It would typically include, but
not be limited to, the following elements: problem list, expected
outcome and prognosis, measurable treatment goals, symptom management,
planned interventions, medication management, community/social services
ordered, how the services of agencies and specialists unconnected to
the practice will be directed/coordinated, the individuals responsible
for each intervention, requirements for periodic review and, when
applicable, revision, of the care plan. A complete list of problems,
medications, and medication allergies would be in the electronic health
record to inform the care plan, care coordination, and ongoing clinical
care.
Creation of an electronic care plan that would be
available 24 hours a day and 7 days a week to all practitioners within
the RHC or FQHC who are furnishing CCM services whose time counts
towards the time requirement for billing the CCM code, and to other
practitioners and providers, as appropriate, who are furnishing care to
the beneficiary, to address a patient's urgent chronic care needs. No
specific electronic solution or format is required to meet this scope
of service element. However, we encourage RHCs and FQHCs who wish to
learn more about currently available electronic standards for care
planning to refer to the proposed rulemaking for the 2015 Edition of
Health Information Technology Certification Criteria, which includes a
proposal to enable users of certified health IT to create and receive
care plan information in accordance with the C-CDA Release 2.0 standard
(80 FR 16842).
Management of care transitions within health care
including referrals to other clinicians, visits following a patient
visit to an emergency department, and visits following discharges from
hospitals and SNFs. The RHC or FQHC must be able to facilitate
communication of relevant patient information through electronic
exchange of a summary care record with other health care providers
regarding these transitions. The RHC or FQHC must also have qualified
personnel who are available to deliver transitional care services to a
patient in a timely way to reduce the need for repeat visits to
emergency departments and readmissions to hospitals and SNFs.
Coordination with home and community based clinical
service providers required to support a patient's psychosocial needs
and functional deficits. Communication to and from home and community
based providers regarding these clinical patient needs must be
documented in the RHC's or FQHC's medical record system.
Secure messaging, internet or other asynchronous non-face-
to-face consultation methods for a patient and caregiver to communicate
with the provider regarding the patient's care in addition to the use
of the telephone. We would note that the faxing of information would
not meet this requirement. These methods would be required to be
available, but would not be required to be used by every practitioner
or for every patient receiving CCM services.
d. Proposed Electronic Health Records (EHR) Requirements
We believe that the use of EHR technology that allows data sharing
is necessary to assure that RHCs and FQHCs can effectively coordinate
services with other practitioners for patients with multiple chronic
conditions. Therefore, we propose the following requirements:
Certified health IT must be used for the recording of
demographic information, health-related problems, medications, and
medication allergies; a clinical summary record; and other scope of
service requirements that reference a health or medical record.
RHCs and FQHCs must use technology certified to the
edition(s) of certification criteria that is, at a minimum, acceptable
for the EHR Incentive Programs as of December 31st of the year
preceding each CCM payment year to meet the following core technology
capabilities: structured recording of demographics, problems,
medications, medication allergies, and the creation of a structured
clinical summary. For example, technology used to furnish CCM services
beginning on January 1, 2016, would be required to meet, at a minimum,
the requirements included in the 2014 Edition certification criteria.
For the purposes of the scope of services, we refer to technology
meeting these requirements as ``CCM Certified Technology.''

[[Page 41797]]

Applicable HIPAA standards would apply to electronic
sharing of patient information.

Table 17--Summary of Proposed CCM Scope of Service Elements and Billing
Requirements
------------------------------------------------------------------------
CCM Scope of service/billing
requirements Health IT requirements
------------------------------------------------------------------------
Initiation of CCM services at an AWV, None.
IPPE, or a comprehensive E/M visi.
Structured recording of demographics, Structured recording of
problems, medications, medication demographics, problems,
allergies, and the creation of a medications, medication
structured clinical summary record. A allergies, and creation of
full list of problems, medications and structured clinical summary
medication allergies in the EHR must records using CCM certified
inform the care plan, care technology.
coordination, and ongoing clinical
care.
Access to CCM services 24/7 (providing None.
the beneficiary with a means to make
timely contact with the RHC or FQHC to
address his or her urgent chronic care
needs regardless of the time of day or
day of the week.
Continuity of care with a designated None.
RHC or FQHC practitioner with whom the
beneficiary is able to get successive
routine appointment.
CCM services for chronic conditions None.
including systematic assessment of the
beneficiary's medical, functional, and
psychosocial needs; system-based
approaches to ensure timely receipt of
all recommended preventive care
services; medication reconciliation
with review of adherence and potential
interactions; and oversight of
beneficiary self-management of
medication.
Creation of a patient-centered care Must at least electronically
plan based on a physical, mental, capture care plan information;
cognitive, psychosocial, functional make this information
and environmental (re)assessment and available on a 24/7 basis to
an inventory of resources and all practitioners within the
supports; a comprehensive care plan RHC or FQHC whose time counts
for all health issues. Share the care towards the time requirement
plan as appropriate with other for the practice to bill for
practitioners and providers. CCM services; and share care
plan information
electronically (other than by
fax) as appropriate with other
practitioners, providers, and
caregivers.
Provide the beneficiary with a written Document provision of the care
or electronic copy of the care plan plan as required to the
and document its provision in the beneficiary in the EHR using
electronic medical record. CCM certified technology.
Management of care transitions between Format clinical summaries
and among health care providers and according to CCM certified
settings, including referrals to other technology. Not required to
clinicians; follow-up after an use a specific tool or service
emergency department visit; and follow- to exchange/transmit clinical
up after discharges from hospitals, summaries, as long as they are
skilled nursing facilities or other transmitted electronically
health care facilities. (other than by fax).
Coordination with home and community Communication to and from home
based clinical service providers. and community based providers
regarding the patient's
psychosocial needs and
functional deficits must be
documented in the patient's
medical record using CCM
certified technology.
Enhanced opportunities for the None.
beneficiary and any caregiver to
communicate with the RHC or FQHC
regarding the beneficiary's care
through not only telephone access, but
also through the use of secure
messaging, internet or other
asynchronous non face-to-face
consultation methods.
Beneficiary consent--Inform the ...............................
beneficiary of the availability of CCM
services and obtain his or her written
agreement to have the services
provided, including authorization for
the electronic communication of his or
her medical information with other
treating providers.
Document in the beneficiary's medical ...............................
record that all of the CCM services
were explained and offered, and note
the beneficiary's decision to accept
or decline these services.
Document the beneficiary's written Document the beneficiary's
consent and authorization in the EHR written consent and
using CCM certified technology. authorization in the EHR using
CCM certified technology.
Beneficiary consent--Inform the None.
beneficiary of the right to stop the
CCM services at any time (effective at
the end of the calendar month) and the
effect of a revocation of the
agreement on CCM services.
Beneficiary consent--Inform the None.
beneficiary that only one practitioner
can furnish and be paid for these
services during a calendar month.
------------------------------------------------------------------------

We invite public comments on all aspects of the proposed payment
methodology and billing for CCM services in RHCs and FQHCs, the
proposed CCM requirements for RHCs and FQHCs, and any other aspect of
our proposal.

C. Healthcare Common Procedure Coding System (HCPCS) Coding for Rural
Health Clinics (RHCs)

1. RHC Payment Methodology and Billing Requirements
RHCs are paid an all-inclusive rate (AIR) per visit for medically
necessary primary health services and qualified preventive health
services furnished face-to-face by a RHC practitioner to a Medicare
beneficiary. The all-inclusive payment system was designed to minimize
reporting requirements, and as such, the rate includes all costs
associated with the services that a RHC furnishes in a single day to a
Medicare

[[Page 41798]]

beneficiary, regardless of the length or complexity of the visit or the
number or type of RHC practitioners seen. Except for certain preventive
services that are not subject to coinsurance requirements, it has not
been necessary for RHCs to submit reporting of medical and procedure
codes, such as level I and level II of the HCPCS, on claims for
services that were furnished during the visit to determine Medicare
payment. Generally, the services reported using the appropriate site of
service revenue code on a RHC claim receives payment under the AIR,
with coinsurance and deductible applied based upon the associated
charges on that line, notwithstanding other Medicare requirements.
Historically, billing instructions for RHCs and Federally Qualified
Health Centers (FQHCs) have been similar. Beginning on April 1, 2005,
through December 31, 2010, RHCs and FQHCs were no longer required to
report HCPCS when billing for RHC and FQHC services rendered during an
encounter, absent a few exceptions. CMS Transmittal 371, dated November
19, 2004, eliminated HCPCS coding for FQHCs and eliminated the
additional line item reporting of preventive services for RHCs and
FQHCs for claims with dates of service on or after April 1, 2005. CMS
Transmittal 1719, dated April 24, 2009, effective October 1, 2009,
required RHCs and FQHCs to report HCPCS codes for a few services, such
as certain preventive services eligible for a waiver of deductible,
services subject to frequency limits, and services eligible for
payments in addition to the all-inclusive rate.
Section 1834(o)(1)(B) of the Act, as added by the Affordable Care
Act, required that FQHCs begin reporting services using HCPCS codes to
develop and implement the FQHC PPS. Since January 1, 2011, FQHCs have
been required to report all services furnished during an encounter by
specifically listing the appropriate HCPCS code(s) for each line item,
along with the site of service revenue code(s), when billing Medicare.
As of October 1, 2014, HCPCS coding is used to calculate payment for
FQHCs that are paid under the FQHC PPS.
Section 4104 of the Affordable Care Act waived the coinsurance and
deductible for the initial preventive physical examination (IPPE), the
annual wellness visit (AWV), and other Medicare covered preventive
services recommended by the United States Preventive Services Task
Force (USPSTF) with a grade of A or B. Since January 1, 2011, HCPCS
coding has been required for these preventive services when reported by
RHCs. When billing for an approved preventive service, RHCs must report
an additional line with the appropriate site of service revenue code
with the approved preventive service HCPCS code and the associated
charges. Although HCPCS coding is currently required for approved
preventive services on RHC claims, HCPCS coding is not used to
determine RHC payment.
2. Proposed Requirement for Reporting of HCPCS Coding for All Services
Furnished by RHCs During a Medicare Visit
For payment under Medicare Part B, the statute requires health
transactions to be exchanged electronically, subject to certain
exceptions, using standards specified by the Secretary. Specifically,
section 1862(a)(22) of the Act requires that no payment may be made
under part A or part B for any expenses incurred for items or services,
subject to exceptions under section 1862(h), for which a claim is
submitted other than in an electronic form specified by the Secretary.
Further, section 1173 of the Act, added by section 262 of the Health
Insurance Portability and Accountability Act of 1996 (HIPAA), requires
the Secretary to adopt standards for transactions, and data elements
for such transactions, to enable health information to be exchanged
electronically, that are appropriate for transactions. These include
but are not limited to health claims or equivalent encounter
information. As a result of the HIPAA amendments, HHS adopted
regulations pertaining to data standards for health care related
transactions. The regulations at 45 CFR 160.103 define a covered entity
to include a provider of medical or health services (as defined in
section 1861(s) of the Act), and define the types of standard
transactions. When conducting a transaction, under 45 CFR 162.1000, a
covered entity must use the applicable medical data code sets described
in Sec. 162.1002 that are valid at the time the health care is
furnished, and these regulations define the standard medical data code
sets adopted by the Secretary as HCPCS and CPT (Current Procedural
Terminology- Fourth Edition) for physician services and other health
care services.
Under section 1861(s)(2)(E) of the Act, a RHC is a supplier of
``medical or health services.'' As such, our regulations require these
covered entities to report a standard medical code set for electronic
health care transactions, although our program instructions have
directed RHCs to submit HCPCS codes only for preventive services. We
believe reporting of HCPCS coding for all services furnished by a RHC
would be consistent with the health transactions requirements, and
would provide useful information on RHC patient characteristics, such
as level of acuity and frequency of services furnished, and the types
of services being furnished by RHCs. This information would also allow
greater oversight of the program and inform policy decisions.
We propose that all RHCs must report all services furnished during
an encounter using standardized coding systems, such as level I and
level II of the HCPCS, for dates of service on or after January 1,
2016. In accordance with section 1862(h) of the Act, in limited
situations RHCs that are unable to submit electronic claims and RHCs
with fewer than 10 full time equivalent employees are exempt from
submitting claims electronically. We propose that RHCs exempt from
electronic reporting under 1862(h) of the Act must also report all
services furnished during an encounter using HCPCS coding via paper
claims for dates of services on or after January 1, 2016. This proposal
would necessitate new billing practices for such RHCs, but we believe
there would be no significant burden for the limited number of RHCs
exempt from electronic billing.
Under this proposal, a HCPCS code would be reported along with the
presently required Medicare revenue code for each service furnished by
the RHC to a Medicare patient. Although HCPCS coding is currently used
to determine FQHC payment under the FQHC PPS, under this proposal, RHCs
would continue to be paid under the AIR and there would be no change in
their payment methodology.
Accordingly, we are proposing to remove the requirement at Sec.
405.2467(b) pertaining to HCPCS coding for FQHCs and redesignate
paragraphs (c) and (d) as paragraphs (b) and (c), respectively. We are
also proposing to add a new paragraph (g)(3) to Sec. 405.2462 to
require FQHCs and RHCs, whether or not exempt from electronic reporting
under Sec. 424.32(d)(3), to report on Medicare claims all service(s)
furnished during each FQHC and RHC visit (as defined in Sec. 405.2463)
using HCPCS and other codes as required.
We propose to require reporting of HCPCS coding for all services
furnished by RHCs to Medicare beneficiaries effective for dates of
service on or after January 1, 2016. We are aware that many RHCs
already record this information through their billing software or
electronic health record systems; however, we recognize there may be
some RHCs that need to make

[[Page 41799]]

changes in their systems. We invite RHCs to submit comments on the
feasibility of updating their billing systems to meet this
implementation date of January 1, 2016.
As part of the implementation of the HCPCS coding requirement, we
plan to provide instructions on how RHCs are to report HCPCS and other
coding and clarify other appropriate billing procedures through program
instruction. CMS' Medicare claims processing system would be revised to
accept the addition of the new RHC reporting requirements effective
January 1, 2016.

D. Payment to Grandfathered Tribal FQHCs That Were Provider-Based
Clinics on or Before April 7, 2000

1. Background
a. Health Services to American Indians and Alaskan Natives (AI/AN)
There is a special government-to-government relationship between
the federal government and federally recognized tribes based on U.S.
treaties, laws, Supreme Court decisions, Executive Orders and the U.S.
Constitution. This government-to-government relationship forms the
basis for federal health services to American Indians/Alaska Natives
(AI/AN) in the U.S.
In 1976, the Indian Health Care Improvement Act (IHCIA, P.L. 94-
437) amended the statute to permit payment by Medicare and Medicaid for
services provided to AI/ANs in Indian Health Service (IHS) and tribal
health care facilities that meet the applicable requirements. Under
this authority, Medicare services to AI/ANs may be furnished by IHS
operated facilities and programs and tribally-operated facilities and
programs under Title I or Title V of the Indian Self Determination
Education Assistance Act, as amended (ISDEAA, P.L 93-638).
According to the IHS Year 2015 Profile, the IHS healthcare delivery
system currently consists of 46 hospitals, with 28 of those hospitals
operated by the IHS and 18 of them operated by tribes under the ISDEAA.
Payment rates for inpatient and outpatient medical care furnished
by the IHS and tribal facilities is set annually by the IHS under the
authority of sections 321(a) and 322(b) of the Public Health Service
(PHS) Act (42 U.S.C. 248 and 249(b)), Public Law 83-568 (42 U.S.C.
2001(a)), and the Indian Health Care Improvement Act (IHCIA) (25 U.S.C.
1601 et seq.), based on the previous year's cost reports from federal
and tribal hospitals. The 1976 IHCIA provided the authority for CMS
(then HCFA) to pay IHS for its hospital services to Medicare eligible
patients, and in 1978 CMS agreed to use a Medicare all-inclusive
payment rate for IHS hospitals and IHS hospital-based clinics.
There is an outpatient visit rate for Medicare visits in Alaska and
an outpatient visit rate for Medicare visits in the lower 48 States.
The Medicare outpatient rate is only applicable for those IHS or tribal
facilities that meet the definition of a provider-based department as
described at Sec. 413.65(a), or a ``grandfathered'' facility as
described at Sec. 413.65(m). For calendar year 2015, the Medicare
outpatient encounter rate is $564 for Alaska and $307 for the rest of
the country (80 FR 18639, April 7, 2015).
b. Provider-Based Entities and the ``Grandfathering'' Provision
In 2000, we adopted regulations at Sec. 413.65 that established
criteria for facilities to be considered provider-based to a hospital
for Medicare payment purposes. The provider-based rules apply to
facilities located both on and off the main hospital campus for which
provider-based status is sought.
In the CY 2001 Hospital Outpatient PPS final rule with comment
period (65 FR 18507), we addressed comments on the proposed provider-
based rules. In regard to IHS facilities, commenters expressed concern
that the proposed rule would undermine the ISDEAA contracting and
compacting relationships between the IHS and tribes because provider-
based clinics must be clinically and administratively integrated into
the hospital, and a tribe that assumes the operation of a provider-
based clinic but not the operation of the hospital would not be able to
meet this requirement. They were also concerned that the proposed
proximity requirements would threaten the status of many IHS and tribal
facilities that frequently were located in distant remote areas.
In response to these comments and the special provisions of law
referenced above governing health care for IHS and the tribes, we
recognized the special relationship between tribes and the United
States government, and did not apply the general provider-based
criteria to IHS and tribally-operated facilities. The regulations
currently include a grandfathering provision at Sec. 413.65(m) for IHS
and tribal facilities that were provider-based to a hospital on or
prior to April 7, 2000. This section states that facilities and
organizations operated by the IHS or tribes will be considered to be
departments of hospitals operated by the IHS or tribes if, on or before
April 7, 2000, they furnished only services that were billed as if they
had been furnished by a department of a hospital operated by the IHS or
a tribe and they are:
Owned and operated by the IHS;
Owned by the tribe but leased from the tribe by the IHS
under the ISDEAA in accordance with applicable regulations and policies
of the IHS in consultation with tribes; or
Owned by the IHS but leased and operated by the tribe
under the ISDEAA in accordance with applicable regulations and policies
of the IHS in consultation with tribes.
Under the authority of the ISDEAA, a tribe may assume control of an
IHS hospital and the provider-based clinics affiliated with the
hospital, or may only assume responsibility of the provider-based
clinic. On August 11, 2003, we issued a letter to Trailblazer Health
Enterprises, LLC, stating that changes in the status of a hospital or
facility from IHS to tribal operation, or vice versa, or the
realignment of a facility from one IHS or tribal hospital to another
IHS or tribal hospital, would not affect the facility's grandfathered
status if the resulting configuration is one which would have qualified
for grandfathering under Sec. 413.65(m) if it had been in effect on
April 7, 2000.
The Medicare Conditions of Participation (CoPs) for Medicare-
participating hospitals at Sec. 482.12 require administrative and
clinical integration between a hospital and its clinics, departments,
and provider-based entities. A tribal clinic billing under an IHS
hospital's CMS Certification Number (CCN), without any additional
administrative or clinical relationship with the IHS hospital, could
put that hospital at risk for non-compliance with the CoPs.
Consequently, we believe that a different structure is needed to
maintain access to care for AI/AN populations served by these hospitals
and clinics, while also ensuring that these facilities are in
compliance with our health and safety rules. The FQHC program may
provide an alternative structure that meets the needs of these tribal
clinics and the populations they serve, while also ensuring the IHS
hospitals are not at risk for non-compliance with the requirements in
Sec. 482.12.
c. Federally Qualified Health Centers (FQHCs)
FQHCs were established in 1990 by section 4161 of the Omnibus
Budget Reconciliation Act of 1990 and were effective beginning on
October 1, 1991. They are facilities that furnish services

[[Page 41800]]

that are typically furnished in an outpatient clinic setting.
The statutory requirements that FQHCs must meet to qualify for the
Medicare benefit are in section 1861(aa)(4) of the Act. All FQHCs are
subject to Medicare regulations at 42 CFR part 405, subpart X, and 42
CFR part 491. Based on these provisions, the following three types of
organizations that are eligible to enroll in Medicare as FQHCs:
Health Center Program grantees: Organizations receiving
grants under section 330 of the PHS Act (42 U.S.C. 254b).
Health Center Program ``look-alikes'': Organizations that
have been identified by the Health Resources and Services
Administration as meeting the requirements to receive a grant under
section 330 of the PHS Act, but which do not receive section 330 grant
funding.
Outpatient health programs or facilities operated by a
tribe or tribal organization under the ISDEAA, or by an urban Indian
organization receiving funds under Title V of the IHCIA.
FQHCs are also entities that were treated by the Secretary for
purposes of Medicare Part B as a comprehensive federally funded health
center as of January 1, 1990 (see section 1861(aa)(4)(C) of the Act).
Section 1834 of the Act was amended by section 10501(i)(3)(A) of
the Affordable Care Act by adding a new subsection (o), ``Development
and Implementation of Prospective Payment System''. Section
1834(o)(1)(A) of the Act requires that the system include a process for
appropriately describing the services furnished by FQHCs, and establish
payment rates based on such descriptions of services, taking into
account the type, intensity, and duration of services furnished by
FQHCs. It also stated that the new system may include adjustments (such
as geographic adjustments) as determined appropriate by the Secretary.
Section 1833(a)(1)(Z) was added by the Affordable Care Act to
require that Medicare payment for FQHC services under section 1834(o)
of the Act shall be 80 percent of the lesser of the actual charge or
the PPS amount determined under section 1834(o) of the Act.
In accordance with the requirements in the Affordable Care Act,
beginning on October 1, 2014, payment to FQHCs is based on the lesser
of the national encounter-based FQHC PPS rate, or the FQHC's total
charges, for primary health services and qualified preventive health
services furnished to Medicare beneficiaries. The FQHC PPS rate is
adjusted by the FQHC geographic adjustment factor (GAF), which is based
on the Geographic Practice Cost Index used under the PFS. The FQHC PPS
rate is also adjusted when the FQHC furnishes services to a patient
that is new to the FQHC, and when the FQHC furnishes an IPPE or an AWV.
The FQHC PPS base rate for the period from October 1, 2014 to December
31, 2015 is $158.85. The rate will be adjusted in calendar year 2016 by
the Medicare Economic Index (MEI), as defined at section 1842(i)(3) of
the Act, and subsequently by either the MEI or a FQHC market basket
(which would be determined pursuant to CMS regulations).
To assure that FQHCs receive appropriate payment for services
furnished, we established a new set of five HCPCS G-codes for FQHCs to
report Medicare visits. These G-codes include all the services in a
typical bundle of services that would be furnished per diem to a
Medicare patient at the FQHC. The five FQHC G-codes are:

G0466-FQHC visit, new patient
G0467-FQHC visit, established patient
G0468-FQHC visit, IPPE or AWV
G0469-FQHC visit, mental health, new patient
G0470-FQHC visit, mental health, established patient

FQHCs establish charges for the services they furnish to FQHC
patients, including Medicare beneficiaries, and charges must be uniform
for all patients, regardless of insurance status. The FQHC would
determine the services that are included in each of the 5 FQHC G-codes,
and the sum of the charges for each of the services associated with the
G-code would be the G-code payment amount. Payment to the FQHC for a
Medicare visit is the lesser of the FQHC's charges (as established by
the G-code), or the PPS rate.
2. Proposed Payment Methodology and Requirements
We are proposing that IHS and tribal facilities and organizations
that met the conditions of section 413.65(m) on or before April 7,
2000, and have a change in their status on or after April 7, 2000 from
IHS to tribal operation, or vice versa, or the realignment of a
facility from one IHS or tribal hospital to another IHS or tribal
hospital such that the organization no longer meets the CoPs, may seek
to become certified as grandfathered tribal FQHCs. To help avoid any
confusion, we refer to these tribal FQHCs as grandfathered tribal FQHCs
to distinguish them from freestanding tribal FQHCs that are currently
being paid the lesser of their charges or the adjusted national FQHC
PPS rate of $158.85, and from provider-based tribal clinics that may
have begun operations subsequent to April 7, 2000.
Under the authority in 1834(o) of the Affordable Care Act to
``include adjustments . . . determined appropriate by the Secretary,''
we are proposing that these grandfathered tribal FQHCs be paid the
lesser of their charges or a grandfathered tribal FQHC PPS rate of
$307, which equals the Medicare outpatient per visit payment rate paid
to them as a provider-based department, as set annually by the IHS,
rather than the FQHC PPS per visit base rate of $158.85, and that
coinsurance would be 20 percent of the lesser of the actual charge or
the grandfathered tribal FQHC PPS rate. These grandfathered tribal
FQHCs would be required to meet all FQHC certification and payment
requirements. This FQHC PPS adjustment for grandfathered tribal clinics
would not apply to a currently certified tribal FQHC, a tribal clinic
that was not provider-based as of April 7, 2000, or an IHS-operated
clinic that is no longer provider-based to a tribally-operated
hospital. This provision would also not apply in those instances where
both the hospital and its provider-based clinic(s) are operated by the
tribe or tribal organization.
Since we are proposing that these grandfathered tribal FQHCs would
be paid based on the IHS payment rates and not the FQHC PPS payment
rates, we are also proposing that the payment rate would not be
adjusted by the FQHC PPS GAF, or be eligible for the special payment
adjustments under the FQHC PPS for new patients, patients receiving an
IPPE or an AWV. They would also not be eligible for the exceptions to
the single per diem payment that is available to FQHCs paid under the
FQHC PPS. As the IHS outpatient rate for Medicare is set annually, we
also propose not to apply the MEI or a FQHC market basket adjustment
that is applied annually to the FQHC PPS base rate. We are proposing
that these adjustments not be applied because we believe that the
special status of these grandfathered tribal clinics, and the enhanced
payment they would receive under the FQHC PPS system, would make
further adjustments unnecessary and/or duplicative of adjustments
already made by IHS in deriving the rate. While we are proposing in
this proposed rule an adjustment to the FQHC PPS rate to reflect the
IHS rate for these grandfathered tribal clinics, if adopted as final,
we will monitor future costs and claims data of these tribal clinics
and reconsider options as appropriate.

[[Page 41801]]

Grandfathered tribal FQHCs would be paid for services included in
the FQHC benefit, even if those services are not included in the IHS
Medicare outpatient all-inclusive rate. Services that are included in
the IHS outpatient all-inclusive rate but not in the FQHC benefit would
not be paid. Information on the FQHC benefit is available in Chapter 13
of the Medicare Benefit Policy Manual.
Grandfathered tribal FQHCs will be subject to Medicare regulations
at part 405, subpart X, and part 491, except as noted in section
III.D.2. of this proposed rule.
We therefore propose to revise Sec. 405.2462, Sec. 405.2463,
Sec. 405.2464, and Sec. 405.2469 to specify the requirements for
payment as a grandfathered tribal FQHC, and to specify payment
provisions, adjustments, rates, and other requirements for
grandfathered tribal FQHCs.
3. Transition
To become certified as a FQHC, an eligible tribe or tribal
organization must submit a Form 855A and all required accompanied
documentation, including an attestation of compliance with the Medicare
FQHC Conditions for Coverage at part 491, to the Jurisdiction H
Medicare Administrative Contractor (A/B MAC). After reviewing the
application and determining that it is complete and approvable, the MAC
would forward the application with its recommendation for approval to
the CMS Regional Office (RO) that has responsibility for the geographic
area in which the tribal clinic is located. The RO would issue a
Medicare FQHC participation agreement to the tribal FQHC, including a
CMS Certification Number (CCN), and would advise the MAC of the CCN
number, to facilitate the MAC's processing of FQHC claims submitted by
the tribal FQHC. Payment to grandfathered tribal FQHCs would begin on
the first day of the month in the first quarter of the year subsequent
to receipt of a Medicare CCN.
4. Conforming Changes
In addition, to the changes proposed in Sec. 405.2462, Sec.
405.2463, Sec. 405.2464, and Sec. 405.2469, we are proposing to:
remove obsolete language from Sec. 405.2410 regarding FQHCs that bill
on the basis of the reasonable cost system, add a section heading to
Sec. 405.2415, and remove obsolete language from Sec. 405.2448
regarding employment requirements.

E. Part B Drugs

1. Payment for Biosimilar Biological Products Under Section 1847A
Section 3139 of the Affordable Care Act amended section 1847A of
the Act to define a biosimilar biological product and a reference
biological product, and to provide for Medicare payment of biosimilar
biological products using the average sale price (ASP) methodology.
Section 1847A(c)(6)(H) of the Act, as added by section 3139 of the
Affordable Care Act, defines a biosimilar biological product as a
biological product approved under an abbreviated application for a
license of a biological product that relies in part on data or
information in an application for another biological product licensed
under section 351 of the Public Health Service Act (PHSA). Section
1847A(c)(6)(I) of the Act, as added by section 3139 of the Affordable
Care Act, defines the reference biological product for a biosimilar
biological product as the biological product licensed under such
section 351 of the PHSA that is referred to in the application of the
biosimilar biological product.
Section 3139 of the Affordable Care Act also amended section
1847A(b) of the Act by adding a new paragraph (8) to specify that the
payment amount for a biosimilar biological product will be the sum of
the following two amounts: the ASP as determined using the methodology
described under paragraph 1847A(b)(6) applied to a biosimilar
biological product for all National Drug Codes (NDCs) assigned to such
product in the same manner as such paragraph is applied to drugs
described in such paragraph; and 6 percent of the payment amount
determined using the methodology in section 1847A(b)(4) of the Act for
the corresponding reference biological product. The effective date for
ASP statutory provisions on biosimilars was July 1, 2010. Separate
sections of the Affordable Care Act also established a licensing
pathway for biosimilar biological products.
To implement these provisions, we published CY 2011 PFS final rule
with comment period (75 FR 73393 and 73394) in the Federal Register on
November 29, 2010. The relevant regulation text is found at Sec.
414.902 and Sec. 414.904. At the time that the CY 2011 PFS final rule
with comment period was published, it was not apparent how or when the
new FDA abbreviated approval pathway would be implemented or when
biosimilar products would be approved for marketing in the United
States. The FDA approved the first biosimilar product under the new
biosimilar approval pathway required by the Affordable Care Act on
March 6, 2015.
Since 2010, we have continued to follow the implementation of the
FDA biosimilar approval process and the emerging biosimilar
marketplace. As biosimilars are now beginning to enter the marketplace,
we have also reviewed the existing guidance on Medicare payment for
these products. Our review has revealed a potential inconsistency
between our interpretation of the statutory language at section
1847A(b)(8) of the Act and regulation text at Sec. 414.904(j). To make
the regulation text more consistent with our interpretation of the
statutory language, we are proposing to amend the regulation text at
Sec. 414.904(j) to make clear that the payment amount for a biosimilar
biological product is based on the ASP of all NDCs assigned to the
biosimilar biological products included within the same billing and
payment code. We are also proposing to amend the regulation text at
Sec. 414.914(j) to update the effective date of this provision from
July 1, 2010 to January 1, 2016, the anticipated effective date of the
CY 2016 Physician Fee Schedule Final Rule with Comment Period. We
welcome comments about these proposals.
We would also like to take this opportunity to discuss and clarify
some other details of Part B biosimilar payment policy. First, we plan
to use a single ASP payment limit for biosimilar products that are
assigned to a specific HCPCS code. In general, this means that products
that rely on a common reference product's biologics license application
will be grouped into the same payment calculation. This approach, which
is similar to the ASP calculation for multiple source drugs, is
authorized by section 1847A(b)(8)(A) of the Act, which states that the
payment determination for a biosimilar biological product is determined
using the methodology in paragraph 1847A(b)(6) applied to a biosimilar
biological product for all NDCs assigned to such product in the same
manner as such paragraph is applied to drugs described in such
paragraph.
Second, we would like to describe how payment for newly approved
biosimilars will be determined. As we stated in the CY 2011 PFS final
rule with comment period (75 FR 73393 and 73394), we anticipate that as
subsequent biosimilar biological products are approved, we will receive
manufacturers' ASP sales data through the ASP data submission process
and publish national payment amounts in a manner that is consistent
with our current approach to other drugs and

[[Page 41802]]

biologicals that are paid under section 1847A of the Act and set forth
in 42 CFR part 414 subpart J. Until we have collected sufficient sales
data as reported by manufacturers, payment limits will be determined in
accordance with the provisions in section 1847A(c)(4) of the Act. If no
manufacturer data is collected, prices will be determined by local
contractors using any available pricing information, including provider
invoices. As with newly approved drugs and biologicals (including
biosimilars), Medicare part B payment would be available once the
product is approved by the FDA. Payment for biosimilars (and other
drugs and biologicals that are paid under part B) may be made before a
HCPCS code has been released, provided that the claim is reasonable and
necessary, and meets applicable coverage and claims submission
criteria.
We would also like to clarify how wholesale acquisition cost (WAC)
data may be used by CMS for Medicare payment of biosimilars in
accordance with the provisions in section 1847A(c)(4) of the Act.
Section 1847A(c)(4) of the Act authorizes the use of a WAC-based
payment amount in cases where the ASP during the first quarter of sales
is not sufficiently available from the manufacturer to compute an ASP-
based payment amount. Once the wholesale acquisition cost (WAC) data is
available from the pharmaceutical pricing compendia and when WAC-based
payment amounts are utilized by CMS to determine the national payment
limit for a biosimilar product, the payment limit will be 106 percent
of the WAC of the biosimilar product; the reference biological product
will not be factored into the WAC-based payment limit determination.
This approach is consistent with partial quarter pricing that was
discussed in rulemaking in the CY 2011 PFS final rule with comment
period (75 FR 73465 and 73466) and with statutory language at section
1847A(c)(4) of the Act. Once ASP information is available for a
biosimilar product, and when partial quarter pricing requirements no
longer apply, the Medicare payment limit for a biosimilar product will
be determined based on ASP data.

F. Productivity Adjustment for the Ambulance, Clinical Laboratory, and
DMEPOS Fee Schedules

Section 3401 of the Affordable Care Act requires that the update
factor under certain payment systems be annually adjusted by changes in
economy-wide productivity. The year that the productivity adjustment is
effective varies by payment system. Specifically, section 3401 of the
Affordable Care Act requires that in CY 2011 (and in subsequent years)
update factors under the ambulance fee schedule (AFS), the clinical
laboratory fee schedule (CLFS) and the DMEPOS fee schedule be adjusted
by changes in economy-wide productivity. Section 3401(a) of the
Affordable Care Act amends section 1886(b)(3)(B) of the Act to add
clause (xi)(II), which sets forth the definition of this productivity
adjustment. The statute defines the productivity adjustment to be equal
to the 10-year moving average of changes in annual economy-wide private
nonfarm business multifactor productivity (MFP) (as projected by the
Secretary for the 10-year period ending with the applicable fiscal
year, year, cost reporting period, or other annual period). Historical
published data on the measure of MFP is available on the Bureau of
Labor Statistics (BLS) Web site at http://www.bls.gov/mfp.
MFP is derived by subtracting the contribution of labor and capital
inputs growth from output growth. The projection of the components of
MFP are currently produced by IHS Global Insight, Inc. (IGI), a
nationally recognized economic forecasting firm with which we contract
to forecast the components of MFP. To generate a forecast of MFP, IGI
replicates the MFP measure calculated by the BLS using a series of
proxy variables derived from IGI's U.S. macroeconomic models. In the CY
2011 and CY 2012 PFS final rules with comment period (75 FR 73394
through 73396, 76 FR 73300 through 73301), we set forth the current
methodology to generate a forecast of MFP. We identified each of the
major MFP component series employed by the BLS to measure MFP as well
as provided the corresponding concepts determined to be the best
available proxies for the BLS series. Beginning with CY 2016, for the
AFS, CLFS and DMEPOS fee schedule, the MFP adjustment is calculated
using a revised series developed by IGI to proxy the aggregate capital
inputs. Specifically, IGI has replaced the Real Effective Capital Stock
used for Full Employment GDP with a forecast of BLS aggregate capital
inputs recently developed by IGI using a regression model. This series
provides a better fit to the BLS capital inputs, as measured by the
differences between the actual BLS capital input growth rates and the
estimated model growth rates over the historical time period.
Therefore, we are using IGI's most recent forecast of the BLS capital
inputs series in the MFP calculations beginning with CY 2016. A
complete description of the MFP projection methodology is available on
our Web site at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/MedicareProgramRatesStats/MarketBasketResearch.html. Although we discuss the IGI changes to the
MFP proxy series in this proposed rule, in the future, when IGI makes
changes to the MFP methodology, we will announce them on our Web site
rather than in the annual rulemaking.

G. Appropriate Use Criteria for Advanced Diagnostic Imaging Services

Section 218(b) of the PAMA amended Title XVIII of the Act to add
section 1834(q) directing us to establish a program to promote the use
of appropriate use criteria (AUC) for advanced diagnostic imaging
services. This proposed rule outlines the initial component of the new
Medicare AUC program and our plan for implementing the remaining
components.
1. Background
In general, AUC are a set of individual criteria that present
information in a manner that links a specific clinical condition or
presentation, one or more services, and an assessment of the
appropriateness of the service(s). Evidence-based AUC for imaging can
assist clinicians in selecting the imaging study that is most likely to
improve health outcomes for patients based on their individual context.
We believe the goal of this statutory AUC program is to promote the
evidence-based use of advanced diagnostic imaging to improve quality of
care and reduce inappropriate imaging. Professional medical societies,
health systems, and academic institutions have been designing and
implementing AUC for decades. Experience and published studies alike
show that results are best when AUC are built on an evidence base that
considers patient health outcomes, weighing the benefits and harms of
alternative care options, and integrated into broader care management
and continuous quality improvement (QI) programs. Successful QI
programs in turn have provider-led multidisciplinary teams collectively
identify key clinical processes and then develop bottom-up, evidence-
based AUC or guidelines that are embedded into clinical workflows, and
become the organizing principle of care delivery (Aspen 2013). Feedback
loops, an essential component, compare provider performance and patient
health outcomes to individual, regional and national benchmarks.

[[Page 41803]]

There is also consensus that AUC programs built on evidence-based
medicine and applied in a QI context are the best method to identify
appropriate care and eliminate inappropriate care, and are preferable
to across-the-board payment reductions that do not differentiate
interventions that add value from those that cause harm or add no
value.
2. Previous AUC Experience
The first CMS experience with AUC, the Medicare Imaging
Demonstration (MID), was required by section 135(b) of the Medicare
Improvements for Patients and Providers Act of 2008 (MIPPA). Designed
as an alternative to prior authorization, the MID's purpose was to
examine whether provider exposure to appropriateness guidelines would
reduce inappropriate utilization of advanced imaging services. In the
2-year demonstration which began in October 2011, nearly 4,000
physicians, grouped into one of five conveners across geographically
and organizationally diverse practice settings, ordered a total of
nearly 50,000 imaging studies.\1\
---------------------------------------------------------------------------

\1\ Timbie J, Hussey P, Burgette L, et al. Medicare Imaging
Demonstration Final Evaluation: Report to Congress. 2014 The Rand
Corporation
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In addition to the outcomes of the MID (http://www.rand.org/content/dam/rand/pubs/research_reports/RR700/RR706/RAND_RR706.pdf), we
considered others' experiences and results from implementation of
imaging AUC and other evidence-based clinical guidelines at healthcare
organizations such as Brigham & Women's, Intermountain Healthcare,
Kaiser, Massachusetts General Hospital, and Mayo, and in states such as
Minnesota. From these experiences, and analyses of them by medical
societies and others, general agreement on at least two key points has
emerged. First, AUC, and the clinical decision support (CDS) mechanisms
through which providers access AUC, must be integrated into the
clinical workflow and facilitate, not obstruct, evidence-based care
delivery. Second, the ideal AUC is an evidence-based guide that starts
with a patient's specific clinical condition or presentation (symptoms)
and assists the provider in the overall patient workup, treatment and
follow-up. Imaging would appear as key nodes within the clinical
management decision tree. The end goal of using AUC is to improve
patient health outcomes. In reality, however, many providers may
encounter AUC through a CDS mechanism for the first time at the point
of image ordering. The CDS would ideally bring the provider back to
that specific clinical condition and work-up scenario to ensure and
simultaneously document the appropriateness of the imaging test.
However, there are different views about how best to roll out AUC
into clinical practice. One opinion is that it is best to start with as
comprehensive a library of individual AUC as possible to avoid the
frustration, experienced and voiced by many practitioners participating
in the MID, of spending time navigating the CDS tool only to find that,
about 40 percent of the time, no AUC for their patient's specific
clinical condition existed. The other opinion is that, based on decades
of experience rolling out AUC in the context of robust QI programs, it
is best to focus on a few priority clinical areas (for example, low
back pain) at a time, to ensure that providers fully understand the AUC
they are using, including when they do not apply to a particular
patient. This same group also believes, based on experience with the
MID, that too many low-evidence alerts or rules simply create ``alert
fatigue.'' They envision that, rather than navigating through a CDS to
find relevant AUC, providers would simply enter the patient's condition
and a message would pop up stating whether AUC existed for that
condition.
We believe there is merit to both approaches, and it has been
suggested to us that the best approach may depend on the particular
care setting. The second, ``focused'' approach may work better for a
large health system that produces and uses its own AUC. The first,
``comprehensive'' approach may in turn work better for a smaller
practice with broad image ordering patterns and fewer resources that
wants to simply adopt and start using from day one a complete AUC
system developed elsewhere. We believe a successful program would allow
flexibility, and under section 1834(q) of the Act, we foresee competing
sets of AUC developed by different provider-led entities, and competing
CDS mechanisms, from which providers may choose.
3. Statutory Authority
Section 218(b) of the PAMA amended the Medicare Part B statute by
adding a new section 1834(q) of the Act entitled, ``Recognizing
Appropriate Use Criteria for Certain Imaging Services,'' which directs
us to establish a new program to promote the use of AUC. In section
1834(q)(1)(B) of the Act, AUC are defined as criteria that are
evidence-based (to the extent feasible) and assist professionals who
order and furnish applicable imaging services to make the most
appropriate treatment decision for a specific clinical condition for an
individual.
4. Discussion of Statutory Requirements
There are four major components of the AUC program under section
1834(q) of the Act, each with its own implementation date: (1)
Establishment of AUC by November 15, 2015 (section 1834(q)(2)); (2)
mechanisms for consultation with AUC by April 1, 2016 (section
1834(q)(3)); (3) AUC consultation by ordering professionals and
reporting on AUC consultation by furnishing professionals by January 1,
2017 (section 1834(q)(4)); and (4) annual identification of outlier
ordering professionals for services furnished after January 1, 2017
(section 1834(q)(5)). In this proposed rule, we primarily address the
first component under section 1834(q)(2)--the process for establishment
of AUC, along with relevant aspects of the definitions under section
1834(q)(1).
Section 1834(q)(1) of the Act describes the program and provides
definitions of terms. The program is required to promote the use of AUC
for applicable imaging services furnished in an applicable setting by
ordering professionals and furnishing professionals. Section 1834(q)(1)
of the Act provides definitions for AUC, applicable imaging service,
applicable setting, ordering professional, and furnishing professional.
An ``applicable imaging service'' under section 1834(q)(1)(C) of the
Act must be an advanced imaging service as defined in section
1834(e)(1)(B) of the Act, which defines ``advanced diagnostic imaging
services'' to include diagnostic magnetic resonance imaging, computed
tomography, and nuclear medicine (including positron emission
tomography); and other diagnostic imaging services we may specify in
consultation with physician specialty organizations and other
stakeholders, but excluding x-ray, ultrasound and fluoroscopy services.
Section 1834(q)(2)(A) of the Act requires the Secretary to specify
applicable AUC for applicable imaging services, through rulemaking and
in consultation with physicians, practitioners and other stakeholders,
by November 15, 2015. Applicable AUC may be specified only from among
AUC developed or endorsed by national professional medical specialty
societies or other provider-led entities. Section 1834(q)(2)(B) of the
Act identifies certain considerations the Secretary must take into
account when specifying applicable AUC including whether the AUC have
stakeholder consensus, are scientifically valid and evidence-based,

[[Page 41804]]

and are based on studies that are published and reviewable by
stakeholders. Section 1834(q)(2)(C) of the Act requires the Secretary
to review the specified applicable AUC each year to determine whether
there is a need to update or revise them, and to make any needed
updates or revisions through rulemaking. Section 1834(q)(2)(D) of the
Act specifies that, if the Secretary determines that more than one AUC
applies for an applicable imaging service, the Secretary shall apply
one or more AUC for the service.
The PAMA was enacted into law on April 1, 2014. Implementation of
many aspects of the amendments made by section 218(b) requires
consultation with physicians, practitioners, and other stakeholders,
and notice and comment rulemaking. We believe the PFS rulemaking
process is the most appropriate and administratively feasible
implementation vehicle. Given the timing, we were not able to include
proposals in the PFS proposed rule to begin implementation in the same
year the PAMA was enacted. The PFS proposed rule is published in late
June or early July each year. For the new Medicare AUC program to have
been a part of last year's proposed rule (CY 2015), we would have had
to interpret and analyze the new statutory language, and develop
proposed plans for implementation in under one month. Additionally,
given the complexity of the program to promote the use of AUC for
advanced imaging services established under section 1834(q) of the Act,
we believed it was imperative to consult with physicians, practitioners
and other stakeholders in advance of developing proposals to implement
the program. In the time since the legislation was enacted, we have met
extensively with stakeholders to gain insight and hear their comments
and concerns about the AUC program. Having this open door with
stakeholders has greatly informed our proposed policy. In addition,
before AUC can be specified as directed by section 1834(q)(2)(A) of the
Act, there is first the need to define what AUC are and to specify the
process for developing them. To ensure transparency and meet the
requirements of the statute, we are proposing to implement section
1834(q)(2) of the Act by first establishing through rulemaking a
process for specifying applicable AUC and proposing the requirements
for AUC development. Under our proposal, the specification of AUC under
section 1834(q)(2)(A) of the Act will flow from this process.
We are also proposing to define the term, ``provider-led entity,''
which is included in section 1834(q)(1)(B) of the Act so that the
public has an opportunity to comment, and entities meeting the
definition are aware of the process by which they may become qualified
under Medicare to develop or endorse AUC. Under our proposed process,
once a provider-led entity is qualified (which includes rigorous AUC
development requirements involving evidence evaluation, as provided in
section 1834(q)(2)(B) of the Act and proposed in this proposed rule)
the AUC that are developed or endorsed by the entity would be
considered to be specified applicable AUC under section 1834(q)(2)(A)
of the Act.
The second major component of the Medicare AUC program is the
identification of qualified CDS mechanisms that could be used by
ordering professionals for consultation with applicable AUC under
section 1834(q)(3) of the Act. We envision a CDS mechanism for
consultation with AUC as an interactive tool that communicates AUC
information to the user. The ordering professional would input
information regarding the clinical presentation of the patient into the
CDS tool, which may be a feature of or accessible through an existing
system, and the tool would provide immediate feedback to the ordering
professional on the appropriateness of one or more imaging services.
Ideally, multiple CDS mechanisms would be available that could
integrate directly into, or be seamlessly interoperable with, existing
health information technology (IT) systems. This would minimize burden
on provider teams and avoid duplicate documentation.
Section 1834(q)(3)(A) of the Act states that the Secretary must
specify qualified CDS mechanisms in consultation with physicians,
practitioners, health care technology experts, and other stakeholders.
This paragraph authorizes the Secretary to specify mechanisms that
could include: CDS modules within certified EHR technology; private
sector CDS mechanisms that are independent of certified EHR technology;
and a CDS mechanism established by the Secretary.
However, all CDS mechanisms must meet the requirements under
section 1834(q)(3)(B) of the Act which specifies that a mechanism must:
Make available to the ordering professional applicable AUC and the
supporting documentation for the applicable imaging service that is
ordered; where there is more than one applicable AUC specified for an
applicable imaging service, indicate the criteria it uses for the
service; determine the extent to which an applicable imaging service
that is ordered is consistent with the applicable AUC; generate and
provide to the ordering professional documentation to demonstrate that
the qualified CDS was consulted by the ordering professional; be
updated on a timely basis to reflect revisions to the specification of
applicable AUC; meet applicable privacy and security standards; and
perform such other functions as specified by the Secretary (which may
include a requirement to provide aggregate feedback to the ordering
professional). Section 1834(q)(3)(C) of the Act specifies that the
Secretary must publish an initial list of specified mechanisms no later
than April 1, 2016, and that the Secretary must identify on an annual
basis the list of specified qualified CDS mechanisms.
We are not including proposals to implement section 1834(q)(3) of
the Act in this proposed rule. We need to first establish, through
notice and comment rulemaking, the process for specifying applicable
AUC. Specified applicable AUC would serve as the inputs to any
qualified CDS mechanism, therefore, these must first be identified so
that prospective tool developers are able to establish relationships
with AUC developers. In addition, we anticipate that in PFS rulemaking
for CY 2017, we will provide clarifications, develop definitions and
establish the process by which we will specify qualified CDS
mechanisms. The requirements for qualified CDS mechanisms set forth in
section 1834(q)(3)(B) of the Act will also be vetted through PFS
rulemaking for CY 2017 so that mechanism developers have a clear
understanding and notice regarding the requirements for their tools.
The CY 2017 proposed rule would be published at the end of June or in
early July of 2016, be open for a period of public comment, and then
the final rule would be published by November 1, 2016. We anticipate
that the initial list of specified applicable CDS mechanisms will be
published sometime after the CY 2017 PFS final rule. In advance of
these actions, we will continue to work with stakeholders to understand
how to ensure that appropriate mechanisms are available, particularly
with respect to standards for certified health IT, including EHRs, that
can enable interoperability of AUC across systems.
The third major component of the AUC program is in section
1834(q)(4) of the Act, Consultation with Applicable Appropriate Use
Criteria. This section establishes, beginning January 1, 2017, the
requirement for an ordering professional to consult with a listed
qualified CDS mechanism when ordering an applicable imaging service
that would be furnished in an

[[Page 41805]]

applicable setting and paid for under an applicable payment system; and
for the furnishing professional to include on the Medicare claim
information about the ordering professional's consultation with a
qualified CDS mechanism. The statute distinguishes between the ordering
and furnishing professional, recognizing that the professional who
orders the imaging service is usually not the same professional who
bills Medicare for the test when furnished. Section 1834(q)(4)(C) of
the Act provides for certain exceptions to the AUC consultation and
reporting requirements including in the case of certain emergency
services, inpatient services paid under Medicare Part A, and ordering
professionals who obtain a hardship exemption. Section 1834(q)(4)(D) of
the Act specifies that the applicable payment systems for the AUC
consultation and reporting requirements are the physician fee schedule,
hospital outpatient prospective payment system, and the ambulatory
surgical center payment system.
We are not including proposals to implement section 1834(q)(4) of
the Act in this proposed rule. Again, it is important that we first
establish through notice and comment rulemaking the process by which
applicable AUC will be specified as well as the CDS mechanisms through
which ordering providers would access them. We anticipate including
further discussion and adopting policies regarding claims-based
reporting requirements in the CY 2017 and CY 2018 rulemaking cycles.
The fourth component of the AUC program is in section 1834(q)(5) of
the Act, Identification of Outlier Ordering Professionals. The
identification of outlier ordering professionals under this paragraph
facilitates a prior authorization requirement for outlier professionals
beginning January 1, 2020, as specified under section 1834(q)(6) of the
Act. Although, we are not including proposals to implement these
sections in this proposed rule, we are proposing to identify outlier
ordering professionals from within priority clinical areas that would
be established through subsequent rulemaking. In this rule, we propose
a process to provide clarity around priority clinical areas.
The concept of priority clinical areas allows CMS to implement an
AUC program that combines two approaches to implementation. Under our
proposed policy, while potentially large volumes of AUC would become
specified across clinical conditions and advanced imaging technologies,
we believe this rapid roll out of specified AUC should be balanced with
a more focused approach to identifying outlier ordering professionals.
We believe this will provide an opportunity for physicians and
practitioners to become familiar with AUC in identified priority
clinical areas prior to Medicare claims for those services being part
of the input for calculating outlier ordering professionals.
In future rulemaking, with the benefit of public comments, we will
establish priority clinical areas and expand them over time. Also in
future rulemaking, we will develop and clarify our policy to identify
outlier ordering professionals.
5. Proposals for Implementation
We are proposing to amend our regulations to add a new Sec.
414.94, ``Appropriate Use Criteria for Certain Imaging Services.''
a. Definitions
In Sec. 414.94 (b), we are proposing to codify and add language to
clarify some of the definitions provided in section 1834(q)(1) of the
Act as well as define terms that were not defined in statute but for
which a definition would be helpful for program implementation. In this
section of the proposed rule, we provide a description of the terms we
are proposing to codify to facilitate understanding and encourage
public comment on the proposed AUC program.
Due to circumstances unique to imaging, it is important to note
that there is an ordering professional (the physician or practitioner
that orders that the imaging service be performed) and a furnishing
professional (the physician or practitioner that actually performs the
imaging service and provides the radiologic interpretation of the
image) involved in imaging services. In some cases the ordering
professional and the furnishing professional are the same.
This proposed AUC program only applies in applicable settings. An
applicable setting would include a physician's office, a hospital
outpatient department (including an emergency department) and an
ambulatory surgical center. The inpatient hospital setting, for
example, is not an applicable setting. Further, the proposed program
only applies to applicable imaging services. These are advanced
diagnostic imaging services for which one or more applicable AUC apply,
one or more qualified CDS mechanisms is available, and one of those
mechanisms is available free of charge.
We are proposing to clarify the definition for appropriate use
criteria, which is defined in statute to include only criteria
developed or endorsed by national professional medical specialty
societies or other provider-led entities, to assist ordering
professionals and furnishing professionals in making the most
appropriate treatment decision for a specific clinical condition for an
individual. To the extent feasible, such criteria shall be evidence-
based. To further describe AUC, we are proposing to add the following
language to this definition: AUC are a collection of individual
appropriate use criteria. Individual criteria are information presented
in a manner that links: A specific clinical condition or presentation;
one or more services; and, an assessment of the appropriateness of the
service(s).
For the purposes of implementing this program, we are proposing to
define new terms in Sec. 414.94(b). A provider-led entity would
include national professional medical specialty societies (for example
the American College of Radiology and the American Academy of Family
Physicians) or an organization that is comprised primarily of providers
and is actively engaged in the practice and delivery of healthcare (for
example hospitals and health systems). Applicable AUC become specified
when they are developed, modified or endorsed by a qualified provider-
led entity. A provider-led entity is not considered qualified until CMS
makes a determination via the qualification process discussed in this
proposal. We are introducing priority clinical areas to inform ordering
professionals and furnishing professionals of the clinical topics,
clinical topics and imaging modalities or imaging modalities that may
be identified by the agency through annual rulemaking and in
consultation with stakeholders which may be used in the identification
of outlier ordering professionals.
The proposed definitions in Sec. 414.94 are important in
understanding our proposals for implementation. Only AUC developed,
modified or endorsed by organizations meeting the definition of
provider-led entity would be considered specified applicable AUC. As
required by the statute, specified applicable AUC, which encompass all
AUC developed, modified or endorsed by qualified provider-led entities,
must be consulted and such consultation must be reported on the claim
for applicable imaging services. To assist in identification of outlier
ordering professionals, we propose to focus on priority clinical areas.
Priority clinical areas would be associated with a subset of specified
AUC.

[[Page 41806]]

b. AUC Development by Provider-Led Entities
In Sec. 414.94, we are proposing to include regulations to
implement the first component of the Medicare AUC program--
specification of applicable AUC. We are first proposing a process by
which provider-led entities (including national professional medical
specialty societies) become qualified by Medicare to develop or endorse
AUC. The cornerstone of this process is for provider-led entities to
demonstrate that they engage in a rigorous evidence-based process for
developing, modifying, or endorsing AUC. It is through this
demonstration that we propose to meet the requirements of section
1834(q)(2)(B) of the Act to take into account certain considerations
for the AUC. Section 1834(q)(2)(B) specifies that the Secretary must
consider whether AUC have stakeholder consensus, are scientifically
valid and evidence-based, and are based on studies that are published
and reviewable by stakeholders. It is not feasible for us to review
every individual criterion. Rather, we propose to establish a
qualification process and requirements for qualified provider-led
entities in order to ensure that the AUC development or endorsement
processes used by a provider-led entity result in high quality,
evidence-based AUC in accordance with section 1834(q)(2)(B). Therefore,
we propose that AUC developed, modified, or endorsed by qualified
provider-led entities will constitute the specified applicable AUC that
ordering professionals would be required to consult when ordering
applicable imaging services.
In order to become and remain a qualified provider-led entity, we
propose to require a provider-led entity to demonstrate adherence to
specific requirements when developing, modifying or endorsing AUC. The
first proposed requirement is related to the evidentiary review process
for individual criteria. Entities must engage in a systematic
literature review of the clinical topic and relevant imaging studies.
We would expect the literature review to include evidence on analytical
validity, clinical validity, and clinical utility of the specific
imaging study. In addition, the provider-led entity must assess the
evidence using a formal, published, and widely recognized methodology
for grading evidence. Consideration of relevant published evidence-
based guidelines and consensus statements by professional medical
specialty societies must be part of the evidence assessment. Published
consensus statements may form part of the evidence base of AUC and
would be subject to the evidentiary grading methodology as any other
evidence identified as part of a systematic review.
In addition, we propose that the provider-led entity's AUC
development process must be led by at least one multidisciplinary team
with autonomous governance that is accountable for developing,
modifying, or endorsing AUC. At a minimum, the team must be composed of
three members including one with expertise in the clinical topic
related to the criterion and one with expertise in imaging studies
related to the criterion. We encourage such teams to be larger, and
include experts in each of the following domains: Statistical analysis
(such as biostatics, epidemiology, and applied mathematics); clinical
trial design; medical informatics; and quality improvement. A given
team member may be the team's expert in more than one domain. These
experts should contribute substantial work to the development of the
criterion, not simply review the team's work.
Another important area to address that provides additional
assurance regarding quality and evidence-based AUC development is the
disclosure of conflicts of interest. We believe it is appropriate to
impose relatively stringent requirements for public transparency and
disclosure of potential conflicts of interest for anyone participating
with a provider-led entity in the development of AUC. We propose that
the provider-led entity must have a publicly transparent process for
identifying and disclosing potential conflicts of interest of members
on the multidisciplinary AUC development team. The provider-led entity
must disclose any direct or indirect relationships, as well as
ownership or investment interests, among the multidisciplinary team
members or immediate family members and organizations that may
financially benefit from the AUC that are being considered for
development, modification or endorsement.
For individual criteria to be available for practitioners to review
prior to incorporation into a CDS mechanism, we propose that the
provider-led entity must maintain on its Web site each criterion that
is part of the AUC that the entity has considered or is considering for
development, modification, or endorsement. This public transparency of
individual criteria is critical not only to ordering and furnishing
professionals, but also to patients and other health care providers who
may wish to view all available AUC.
Although evidence should be the foundation for the development,
modification and endorsement of AUC, we recognize that not all aspects
of a criterion will be evidence-based, and that a criterion does not
exist for every clinical scenario. We believe it is important for AUC
users to understand which aspects of a criterion are evidence-based and
which are consensus-based. Therefore, we propose that key decision
points in individual criteria be graded in terms of strength of
evidence using a formal, published, and widely recognized methodology.
This level of detail must be part of each AUC posted to the entity's
Web site.
It is critical that as provider-led entities develop large
collections of AUC, they have a transparent process for the timely and
continual review of each criterion, as there are sometimes rapid
changes in the evidence base for certain clinical conditions and
imaging studies.
Finally, we propose that a provider-led entity's process for
developing, modifying, or endorsing AUC (which would be inclusive of
the requirements being proposed in this rule) must be publicly posted
on the entity's Web site.
We believe it is important to fit AUC to local circumstances and
populations, while also ensuring a rigorous due process for doing so.
Under our proposed AUC program, local adaptation of AUC might happen in
three ways. First, compatibility with local practice is something that
ordering professionals can assess when selecting AUC for consultation.
Second, professional medical societies (many of which have state
chapters) and large health systems (which incorporate diverse practice
settings, both urban and rural) that become qualified provider-led
entities can get local feedback at the outset and build alternative
options into the design of their AUC. Third, local provider-led
entities can themselves become qualified to develop, modify, or endorse
AUC.
c. Process for Provider-Led Entities To Become Qualified To Develop,
Endorse or Modify AUC
We are proposing that provider-led entities must apply to CMS to
become qualified. We are proposing that entities that believe they meet
the definition of provider-led submit applications to us that document
adherence to each of the qualification requirements. The application
must include a statement as to how the entity meets the definition of a
provider-led entity. Applications will be accepted each year but must
be received by January 1. A list of all applicants that we determine to
be

[[Page 41807]]

qualified provider-led entities will be posted to our Web site by the
following June 30 at which time all AUC developed or endorsed by that
provider-led entity will be considered to be specified AUC. All
qualified provider-led entities must re-apply every 6 years and their
applications must be received by January 1 during the 5th year of their
approval. Note that the application is not a CMS form; rather it is
created by the applicant entity.
d. Identifying Priority Clinical Areas
Section 1834(q)(4) of the Act requires that, beginning January 1,
2017, ordering professionals must consult applicable AUC using a
qualified CDS mechanism when ordering applicable imaging services for
which payment is made under applicable payment systems, and that
furnishing professionals must report the results of this consultation
on Medicare claims. Section 1834(q)(5) of the Act further provides for
the identification of outlier ordering professionals based on a low
adherence to applicable AUC. We are proposing to identify priority
clinical areas of AUC that we will use in identifying outlier ordering
professionals. Although there is no consequence to being identified as
an outlier ordering professional until January 2020, it is important to
allow ordering and furnishing professionals as much time as possible to
use and familiarize themselves with the specified applicable AUC that
will eventually become the basis for identifying outlier ordering
professionals.
To identify these priority clinical areas, we may consider
incidence and prevalence of diseases, as well as the volume,
variability of utilization, and strength of evidence for imaging
services. We may also consider applicability of the clinical area to a
variety of care settings, and to the Medicare population. We are
proposing to annually solicit public comment and finalize clinical
priority areas through the PFS rulemaking process beginning in CY 2017.
To further assist us in developing the list of proposed priority
clinical areas, we are proposing to convene the Medicare Evidence
Development and Coverage Advisory Committee (MEDCAC), a CMS FACA
compliant committee, as needed to examine the evidence surrounding
certain clinical areas.
Specified applicable AUC falling within priority clinical areas may
factor into the low-adherence calculation when identifying outlier
ordering professionals for the prior authorization component of this
statute, which is slated to begin in 2020. Future rulemaking will
address further details.
e. Identification of Non-Evidence Based AUC
Despite our proposed provider-led entity qualification process that
should ensure evidence-based AUC development, we remain concerned that
non-evidence based criteria may be developed or endorsed by qualified
provider-led entities. Therefore, we are proposing a process by which
we would identify and review potentially non-evidence-based criteria
that fall within one of our identified priority clinical areas. We are
proposing to accept public comment through annual PFS rulemaking so
that the public can assist in identifying AUC that potentially are not
evidence-based. We foresee this being a standing request for comments
in all future rules regarding AUC. We are proposing to use the MEDCAC
to further review the evidentiary basis of these identified AUC, as
needed. The MEDCAC has extensive experience in reviewing, interpreting,
and translating evidence. If through this process, a number of criteria
from an AUC library are identified as being insufficiently evidence-
based, and the provider-led entity that produced the library does not
make a good faith attempt to correct these in a timely fashion, this
information could be considered when the provider-led entity applies
for re-qualification.
6. Summary
Section 1834(q) of the Act includes rapid timelines for
establishing a new Medicare AUC program for advanced imaging services.
The number of clinicians impacted by the scope of this program is
massive as it will apply to every physician and practitioner who orders
applicable diagnostic imaging services. This crosses almost every
medical specialty and could have a particular impact on primary care
physicians since their scope of practice can be quite vast.
We believe the best implementation approach is one that is
diligent, maximizes the opportunity for public comment and stakeholder
engagement, and allows for adequate advance notice to physicians and
practitioners, beneficiaries, AUC developers, and CDS mechanism
developers. It is for these reasons we are proposing a stepwise
approach, adopted through rulemaking, to first define and lay out the
process for the Medicare AUC program. However, we also recognize the
importance of moving expeditiously to accomplish a fully implemented
program.
In summary, we are proposing definitions of terms necessary to
implement the AUC program. We are particularly seeking comment on the
proposed definition of provider-led entity as these are the
organizations that have the opportunity to become qualified to develop,
modify or endorse specified AUC. We are also proposing an AUC
development process which allows some flexibility for provider-led
entities but sets standards including an evidence-based development
process and transparency. In addition, we are proposing the concept and
definition of priority clinical areas and how they may contribute to
the identification of outlier ordering professionals. Lastly, we are
proposing to develop a process by which non-evidence-based AUC will be
identified and discussed in the public domain. We invite the public to
submit comments on these proposals.

H. Physician Compare Web Site

1. Background and Statutory Authority
As required by section 10331(a)(1) of the Affordable Care Act, by
January 1, 2011, we developed a Physician Compare Internet Web site
with information on physicians enrolled in the Medicare program under
section 1866(j) of the Act, as well as information on other eligible
professionals (EPs) who participate in the Physician Quality Reporting
System (PQRS) under section 1848 of the Act. We launched the first
phase of Physician Compare on December 30, 2010 (http://www.medicare.gov/physiciancompare). In the initial phase, we posted the
names of EPs that satisfactorily submitted quality data for the 2009
PQRS, as required by section 1848(m)(5)(G) of the Act.
We also implemented, consistent with section 10331(a)(2) of the
Affordable Care Act, a plan for making publicly available through
Physician Compare information on physician performance that provides
comparable information on quality and patient experience measures for
reporting periods beginning no earlier than January 1, 2012. We met
this requirement in advance of the statutory deadline of January 1,
2013, as outlined below, and plan to continue addressing elements of
the plan through rulemaking.
To the extent that scientifically sound measures are developed and
are available, we are required to include, to the extent practicable,
the following types of measures for public reporting:
Measures collected under the Physician Quality Reporting
System (PQRS).

[[Page 41808]]

An assessment of patient health outcomes and functional
status of patients.
An assessment of the continuity and coordination of care
and care transitions, including episodes of care and risk-adjusted
resource use.
An assessment of efficiency.
An assessment of patient experience and patient,
caregiver, and family engagement.
An assessment of the safety, effectiveness, and timeliness
of care.
Other information as determined appropriate by the
Secretary.
In developing and implementing the plan, section 10331(b) requires
that we include, to the extent practicable, the following:
Processes to ensure that data made public are
statistically valid, reliable, and accurate, including risk adjustment
mechanisms used by the Secretary.
Processes for physicians and EPs whose information is
being publicly reported to have a reasonable opportunity, as determined
by the Secretary, to review their results before posting to Physician
Compare. We have established a 30-day preview period for all
measurement performance data that will allow physicians and other EPs
to view their data as it will appear on the Web site in advance of
publication on Physician Compare (77 FR 69166, 78 FR 74450, and 79 FR
67770). Details of the preview process will be communicated directly to
those with measures to preview and will also be published on the
Physician Compare Initiative page (http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/physician-compare-initiative/) in advance of the preview period.
Processes to ensure the data published on Physician
Compare provides a robust and accurate portrayal of a physician's
performance.
Data that reflects the care provided to all patients seen
by physicians, under both the Medicare program and, to the extent
applicable, other payers, to the extent such information would provide
a more accurate portrayal of physician performance.
Processes to ensure appropriate attribution of care when
multiple physicians and other providers are involved in the care of the
patient.
Processes to ensure timely statistical performance
feedback is provided to physicians concerning the data published on
Physician Compare.
Implementation of computer and data infrastructure and
systems used to support valid, reliable and accurate reporting
activities.
Section 10331(d) of the Affordable Care Act requires us to consider
input from multi-stakeholder groups, consistent with sections
1890(b)(7) and 1890A of the Act, when selecting quality measures for
Physician Compare. We also continue to get general input from
stakeholders on Physician Compare through a variety of means, including
rulemaking and different forms of stakeholder outreach (for example,
Town Hall meetings, Open Door Forums, webinars, education and outreach,
Technical Expert Panels, etc.).
We submitted a report to the Congress in advance of the January 1,
2015 deadline, as required by section 10331(f) of the Affordable Care
Act, on Physician Compare development, including information on the
efforts and plans to collect and publish data on physician quality and
efficiency and on patient experience of care in support of value-based
purchasing and consumer choice.
We believe section 10331 of the Affordable Care Act supports our
overarching goals of providing consumers with quality of care
information that will help them make informed decisions about their
health care, while encouraging clinicians to improve the quality of
care they provide to their patients. In accordance with section 10331
of the Affordable Care Act, we plan to continue to publicly report
physician performance information on Physician Compare.
2. Public Reporting of Performance and Other Data
Since the initial launch of the Web site, we have continued to
build on and improve Physician Compare, including a full redesign in
2013. Currently, Web site users can view information about approved
Medicare professionals such as name, primary and secondary specialties,
practice locations, group affiliations, hospital affiliations that link
to the hospital's profile on Hospital Compare as available, Medicare
Assignment status, education, residency, and American Board of Medical
Specialties (ABMS) board certification information. In addition, for
group practices, users can view group practice names, specialties,
practice locations, Medicare assignment status, and affiliated
professionals.
In addition, there is a section on each Medicare professional's
profile page indicating with a green check mark the quality programs
under which the EP satisfactorily or successfully reported. The Web
site will continue to post annually the names of individual EPs who
satisfactorily report under PQRS, EPs who successfully participate in
the Medicare Electronic Health Record (EHR) Incentive Program as
authorized by section 1848(o)(3)(D) of the Act, and EPs who report PQRS
measures in support of Million Hearts (79 FR 67763). A proposed change
to the Million Hearts indicator for 2016 data is discussed below.
With the 2013 redesign of the Physician Compare Web site, we added
a quality programs section to each group practice profile page, as
well. We will continue to indicate which group practices are
satisfactorily reporting in the Group Practice Reporting Option (GPRO)
under PQRS (79 FR 67763). The Physician Compare Web site also contains
a link to the Physician Compare downloadable database (https://data.medicare.gov/data/physician-compare), including information on
this quality program participation.
We continue to implement our plan for a phased approach to public
reporting performance information on the Physician Compare Web site.
Under the first phase of this plan, we established that GPRO measures
collected under PQRS through the Web Interface for 2012 would be
publicly reported on Physician Compare (76 FR 73419 through 73420). We
further expanded the plan by including on the Physician Compare Web
site the 2013 group practice-level PQRS measures for Diabetes Mellitus
(DM) and Coronary Artery Disease (CAD) reported via the Web Interface,
and planned to report composite measures for DM and CAD in 2014, as
well (77 FR 69166).
The 2012 GPRO measures were publicly reported on Physician Compare
in February 2014. The 2013 PQRS GPRO DM and GPRO CAD measures collected
via the Web Interface that met the minimum sample size of 20 patients
and proved to be statistically valid and reliable were publicly
reported on Physician Compare in December 2014. The composite measures
were not reported, however, as some items included in the composites
were no longer clinically relevant. If the minimum threshold is not met
for a particular measure, or the measure is otherwise deemed not to be
suitable for public reporting, the performance rate on that measure is
not publicly reported. On the Physician Compare Web site, we only
publish those measures that are statistically valid and reliable, and
therefore, most likely to help consumers make informed decisions about
the Medicare professionals they choose to meet their health care needs.
In addition, we do not publicly report first year measures, meaning new
PQRS and non-PQRS measures that have been available for

[[Page 41809]]

reporting for less than one year, regardless of reporting mechanism.
After a measure's first year in use, we will evaluate the measure to
see if and when the measure is suitable for public reporting.
Measures must be based on reliable and valid data elements to be
useful to consumers. Therefore, for all proposed measures available for
public reporting, including both group and individual EP level
measures--regardless of reporting mechanism, only those proposed
measures that prove to be valid, reliable, and accurate upon analysis
and review at the conclusion of data collection and that meet the
established public reporting criteria of a minimum sample size of 20
patients will be included on Physician Compare. For information on how
we determine the validity and reliability of data and other statistical
analyses we perform, refer to the CY 2015 PFS final rule with comment
period (79 FR 67764 through 79 FR 67765).
We will also continue to include an indicator of which reporting
mechanism was used and to only include on the site measures deemed
statistically comparable.\2\ We will continue to publicly report all
measures submitted and reviewed and found to be statistically valid and
reliable in the Physician Compare downloadable file. However, not all
of these measures would necessarily be included on the Physician
Compare profile pages. Consumer testing has shown profile pages with
too much information and measures that are not well understood by
consumers can negatively impact a consumer's ability to make informed
decisions. Our analysis of the collected measure data, along with
consumer testing and stakeholder feedback, will determine specifically
which measures are published on Web site profile pages. Statistical
analyses, like those specified above, will ensure the measures included
are statistically valid and reliable and comparable across data
collection mechanisms. Stakeholder feedback will help us to ensure that
all publicly reported measures meet current clinical standards. When
measures are finalized in advance of the time period in which they are
collected, it is possible that clinical guidelines can change rendering
a measure no longer relevant. Publishing that measure can lead to
consumer confusion regarding what best practices their health care
professional should be subscribing to. We will continue to reach out to
stakeholders in the professional community, such as specialty
societies, to ensure that the measures under consideration for public
reporting remain clinically relevant and accurate.
---------------------------------------------------------------------------

\2\ By statistically comparable, CMS means that the quality
measures are analyzed and proven to measure the same phenomena in
the same way regardless of the mechanism through which they were
collected.
---------------------------------------------------------------------------

The primary goal of Physician Compare is to help consumers make
informed health care decisions. If a consumer does not properly
interpret a quality measure and thus misunderstands what the quality
score represents, the consumer cannot use this information to make an
informed decision. Through concept testing, we will test with consumers
how well they understand measures presented using plain language. Such
consumer testing will help us gauge how measures are understood and the
kinds of measures that are most relevant to consumers. This will be
done to help ensure that the information included on Physician Compare
is as consumer friendly and consumer focused as possible.
As is the case for all measures published on Physician Compare,
individual EPs and group practices will be given a 30-day preview
period to view their measures as they will appear on Physician Compare
prior to the measures being published. As in previous years, we will
fully explain the process for the 30-day preview and provide a detailed
timeline and instructions for preview in advance of the start of the
preview period.
We also report certain Accountable Care Organization (ACO) quality
measures on Physician Compare (76 FR 67802, 67948). Because EPs that
bill under the TIN of an ACO participant are considered to be a group
practice for purposes of qualifying for a PQRS incentive under the
Medicare Shared Savings Program (Shared Savings Program), we publicly
report ACO performance on quality measures on the Physician Compare Web
site in the same way as we report performance on quality measures for
group practices participating under PQRS. Public reporting of
performance on these measures is presented at the ACO level only. The
first subset of ACO measures was also published on the Web site in
February 2014. ACO measures can be viewed by following the
``Accountable Care Organization (ACO) Quality Data'' link on the
homepage of the Physician Compare Web site (http://medicare.gov/physiciancompare/aco/search.html ).
ACOs will be able to preview their quality data that will be
publicly reported on Physician Compare through the ACO Quality Reports,
which will be made available to ACOs for review at least 30 days prior
to the start of public reporting on Physician Compare. The quality
reports will indicate the measures that are available for public
reporting. ACO measures will be publicly reported in plain language, so
a crosswalk linking the technical language included in the Quality
Report and the plain language that will be publicly reported will be
provided to ACOs at least 30 days prior to the start of public
reporting.
As part of our public reporting plan for Physician Compare, we also
have available for public reporting patient experience measures,
specifically reporting the CAHPS for PQRS measures, which relate to the
Clinician and Group Consumer Assessment of Healthcare Providers and
Systems (CG-CAHPS) data, for group practices of 100 or more EPs
reporting data in 2013 under PQRS and for ACOs participating in the
Shared Savings Program (77 FR 69166 and 69167). The 2013 CAHPS data for
ACOs were publicly reported on Physician Compare in December 2014.
We continued to expand our plan for publicly reporting data on
Physician Compare in 2015. We plan to make all group practice-level
measures collected through the Web Interface for groups of 25 or more
EPs participating in 2014 under the PQRS and for ACOs participating in
the Shared Savings Program available for public reporting in CY 2015
(78 FR 74449). We also plan to publicly report performance on certain
measures that group practices report via registries and EHRs for the
2014 PQRS GPRO (78 FR 74451). Specifically, we finalized a decision to
make available for public reporting on Physician Compare performance on
16 registry measures and 13 EHR measures in CY 2015 (78 FR 74451).
These measures are consistent with the measures available for public
reporting via the Web Interface.
In CY 2015, CAHPS measures for group practices of 100 or more EPs
who participate in PQRS, regardless of data submission method, and for
Shared Savings Program ACOs reporting through the Web Interface or
other CMS-approved tool or interface are available for public reporting
(78 FR 74452). In addition, twelve 2014 summary survey measures for
groups of 25 to 99 EPs collected via any certified CAHPS vendor
regardless of PQRS participation are available for public reporting (78
FR 74452). For ACOs participating in the Shared Savings Program, the
patient experience measures that are included in the Patient/Caregiver
Experience domain of the Quality Performance Standard under the Shared
Savings Program will be available for public reporting in CY 2015 (78
FR 74452).

[[Page 41810]]

In late CY 2015, certain 2014 individual PQRS measure data reported
by individual EPs are also available for public reporting.
Specifically, we will make available for public reporting 20 individual
measures collected through a registry, EHR, or claims (78 FR 74453
through 74454). These are measures that are in line with those measures
reported by groups via the Web Interface.
Finally, in support of the HHS-wide Million Hearts initiative,
performance rates on measures in the PQRS Cardiovascular Prevention
measures group at the individual EP level for data collected in 2014
for the PQRS are available for public reporting in CY 2015 (78 FR
74454).
We continue to expand public reporting on Physician Compare by
making an even broader set of quality measures available for
publication on the Web site in CY 2016. All 2015 group-level PQRS
measures across all group reporting mechanisms--Web Interface,
registry, and EHR--are available for public reporting on Physician
Compare in CY 2016 for groups of 2 or more EPs (79 FR 67769).
Similarly, we decided that all measures reported by ACOs participating
in the Shared Savings Program will be available for public reporting on
Physician Compare.
Understanding the value of patient experience data for Physician
Compare, CMS decided to report twelve 2015 CAHPS for PQRS summary
survey measures for all group practices of two or more EPs, who meet
the specified sample size requirements and collect data via a CMS-
specified certified CAHPS vendor, are available for public reporting in
CY 2016 (79 FR 67772).
To provide the opportunity for more EPs to have measures included
on Physician Compare, and to provide more information to consumers to
make informed decisions about their health care, we will make available
for public reporting in CY 2016 on Physician Compare all 2015 PQRS
measures for individual EPs collected through a registry, EHR, or
claims (79 FR 67773).
Furthermore, in support of the HHS-wide Million Hearts initiative,
we will publicly report the performance rates on the four, 2015 PQRS
measures reported by individual EPs in support of Million Hearts with a
minimum sample size of 20 patients.
To further support the expansion of quality measure data available
for public reporting on Physician Compare and to provide more quality
data to consumers to help them make informed decisions, CMS finalized
2015 Qualified Clinical Data Registry (QCDR) PQRS and non-PQRS measure
data collected at the individual EP level are available for public
reporting. The QCDR is required to declare during their self-nomination
if they plan to post data on their own Web site and allow Physician
Compare to link to it or if they will provide data to CMS for public
reporting on Physician Compare. Measures collected via QCDRs must also
meet the established public reporting criteria. Both PQRS and non-PQRS
measures that are in their first year of reporting by a QCDR will not
be available for public reporting (79 FR 67774 through 67775).
See Table 18 for a summary of our previously finalized policies for
public reporting data on Physician Compare.

Table 18--Summary of Previously Finalized Policies for Public Reporting on Physician Compare
----------------------------------------------------------------------------------------------------------------
Quality measures and data for public
Data collection year Public reporting year Reporting mechanism(s) reporting
----------------------------------------------------------------------------------------------------------------
2012.................. 2013................... Web Interface (WI), Include an indicator for satisfactory
EHR, Registry, Claims. reporters under PQRS, successful e-
prescribers under eRx Incentive
Program, and participants in the EHR
Incentive Program.
2012.................. February 2014.......... WI..................... 5 Diabetes Mellitus (DM) and Coronary
Artery Disease (CAD) measures
collected via the WI for group
practices reporting under PQRS with a
minimum sample size of 25 patients
and Shared Savings Program ACOs.
2013.................. 2014................... WI, EHR, Registry, Include an indicator for satisfactory
Claims. reporters under PQRS, successful e-
prescribers under eRx Incentive
Program, and participants in the EHR
Incentive Program. Include an
indicator for EPs who earn a PQRS
Maintenance of Certification
Incentive and EPs who report the PQRS
Cardiovascular Prevention measures
group in support of Million Hearts.
2013.................. December 2014.......... WI..................... 3 DM and 1 CAD measures collected via
the WI for groups of 25 or more EPs
with a minimum sample size of 20
patients.
2013.................. December 2014.......... Survey Vendor.......... 6 CAHPS for ACO summary survey
measures for Shared Savings Program
ACOs.
2014.................. Expected to be 2015.... WI, EHR, Registry, Include an indicator for satisfactory
Claims. reporters under PQRS and participants
in the EHR Incentive Program. Include
an indicator for EPs who earn a PQRS
Maintenance of Certification
Incentive and EPs who report the PQRS
Cardiovascular Prevention measures
group in support of Million Hearts.
2014.................. Expected to be late WI, EHR, Registry...... All measures reported via the WI, 13
2015. EHR, and 16 registry measures for
group practices of 2 or more EPs
reporting under PQRS with a minimum
sample size of 20 patients.
Include composites for DM and CAD, if
available.
2014.................. Expected to be late WI, Survey Vendor All measures reported by Shared
2015. Administrative Claims. Savings Program ACOs, including CAHPS
for ACO and claims based measures.
2014.................. Expected to be late WI, Certified Survey Up to 12 CAHPS for PQRS summary
2015. Vendor. measures for groups of 100 or more
EPs reporting via the WI and group
practices of 25 to 99 EPs reporting
via a CMS-approved certified survey
vendor.
2014.................. Expected to be late Registry, EHR, or A sub-set of 20 PQRS measures
2015. Claims. submitted by individual EPs that
align with those available for group
reporting via the WI and that are
collected through registry, EHR, or
claims with a minimum sample size of
20 patients.
2014.................. Expected to be late Registry............... Measures from the Cardiovascular
2015. Prevention measures group reported by
individual EPs in support of Million
Hearts with a minimum sample size of
20 patients.

[[Page 41811]]

2015.................. Expected to be late WI, EHR, Registry, Include an indicator for satisfactory
2016. Claims. reporters under PQRS and participants
in the EHR Incentive Program. Include
an indicator for EPs who report 4
individual PQRS measures in support
of Million Hearts.
2015.................. Expected to be late WI, EHR, Registry...... All PQRS measures for group practices
2016. of 2 or more EPs.
2015.................. Expected to be late WI, Survey Vendor All measures reported by Shared
2016. Administrative Claims. Savings Program ACOs, including CAHPS
for ACOs and claims based measures.
2015.................. Expected to be late Certified Survey Vendor All CAHPS for PQRS measures reported
2016. for groups of 2 or more EPs who meet
the specified sample size
requirements and collect data via a
CMS-specified certified CAHPS vendor.
2015.................. Expected to be late Registry, EHR, or All PQRS measures for individual EPs
2016. Claims. collected through a registry, EHR, or
claims.
2015.................. Expected to be late Registry, EHR, or 4 PQRS measures reported by individual
2016. Claims. EPs in support of Million Hearts with
a minimum sample size of 20 patients.
2015.................. Expected to be late QCDR................... All individual EP QCDR measures,
2016. including PQRS and non-PQRS measures.
----------------------------------------------------------------------------------------------------------------

3. Proposed Policies for Public Data Disclosure on Physician Compare
We are expanding public reporting on Physician Compare by
continuing to make a broad set of quality measures available for
publication on the Web site. We started the phased approach with a
small number of possible PQRS GPRO Web Interface measures for 2012 and
have been steadily building on this to provide Medicare consumers with
more information to help them make informed health care decisions. As a
result, we are now proposing to add new data elements to the individual
EP and/or group practice profile pages and to continue to publicly
report a broad set of quality measures on the Web site.
a. Value Modifier
We propose to expand the section on each individual EP and group
practice profile page that indicates Medicare quality program
participation with a green check mark to include the names of those
individual EPs and group practices who received an upward adjustment
for the Value Modifier (VM). We propose to include this on Physician
Compare annually. For the 2018 VM, this information would be based on
2016 data and included on the site no earlier than late 2017. The VM
upward adjustment indicates that a physician or group has achieved one
of the following: higher quality care at a lower cost; higher quality
care at an average cost; or average quality care at a lower cost. The
first goal of the HHS Strategic Plan is to strengthen health care. One
of the ways to do this is to reduce the growth of health care costs
while promoting high-value, effective care (Objective D, Strategic Goal
1).\3\ This VM indicator can help consumers identify higher quality
care provided at a lower cost. This means this type of quality
information may be very useful to consumers as they work to choose the
best possible health care available to them. Including the check mark
is a way to share what can be a very complex concept in a user-friend,
easy-to-understand format. We believe this is a positive first step in
making this important information available to the public in a way that
is most likely to be accurately interpreted and beneficial. We solicit
comments on this proposal.
---------------------------------------------------------------------------

\3\ http://www.hhs.gov/strategic-plan/goal1.html.
---------------------------------------------------------------------------

b. Million Hearts
In support of the HHS-wide Million Hearts initiative, we include an
indicator for individual EPs who choose to report on specific ``ABCS''
(Appropriate Aspirin Therapy for those who need it, Blood Pressure
Control, Cholesterol Management, and Smoking Cessation) measures (79 FR
67764). Based on available measures the criteria for this indicator
have evolved over time. In 2015, an indicator was included if EPs
satisfactorily reported four individual PQRS Cardiovascular Prevention
measures. In previous years, the indicator was based on satisfactory
reporting of the Cardiovascular Prevention measures group, which was
not available via PQRS for 2015. To further support this initiative, we
now propose to include on Physician Compare annually in the year
following the year of reporting (for example, 2016 data will be
included on Physician Compare in 2017) an indicator for individual EPs
who satisfactorily report the new Cardiovascular Prevention measures
group being proposed under PQRS, should this measures group be
finalized. The Million Hearts initiative's primary goal is to improve
cardiovascular heart health, and therefore, we believe it is important
to continue supporting the program and acknowledging those physicians
and other health care professionals working to excel in performance on
the ABCS. We solicit comments on this proposal.
c. PQRS GPRO and ACO Reporting
Understanding the importance of including quality data on Physician
Compare to support the goals of section 10331(a) of the Affordable Care
Act, we finalized in the CY 2015 PFS final rule with comment period (79
FR 67547) a decision to publicly report on Physician Compare all PQRS
GPRO measures collected in 2015 via the Web Interface, registry, or
EHR. We propose to continue to make available for public reporting on
Physician Compare on an annual basis all PQRS GPRO measures across all
PQRS group practice reporting mechanisms--Web Interface, registry, and
EHR- for groups of 2 or more EPs available in the year following the
year the measures are reported. Similarly, all measures reported by
Shared Savings Program ACOs, including CAHPS for ACO measures, would be
available for public reporting on Physician Compare annually in the
year following the year the measures are reported. For group practice
and ACO measures, the measure performance rate will be represented on
the Web site. We solicit comments on this proposal.
d. Individual EP PQRS Reporting
Consumer testing indicates that consumers are looking for measures
regarding individual doctors and other health care professionals. As a
result, we plan to make available for public reporting on Physician
Compare all 2015 PQRS measures for individual EPs collected through a
registry, EHR, or claims (79 FR 67773). Through

[[Page 41812]]

stakeholder outreach and consumer testing we have learned that these
PQRS quality data provide the public with useful information to help
consumers make informed decisions about their health care. As a result,
we propose to continue to make all PQRS measures across all individual
EP reporting mechanisms available for public reporting on Physician
Compare annually in the year following the year the measures are
reported (for example, 2016 data will be included on Physician Compare
in 2017). For individual EP measures, the measure performance rate will
be represented on the Web site. We solicit comments on this proposal.
e. Individual EP and Group Practice QCDR Measure Reporting
Stakeholder outreach and consumer testing have repeatedly shown
that consumers find individual EP quality measures valuable and helpful
when making health care decisions. Consumers want to know more about
the individual EPs they can make an appointment to see for their health
care needs. And expanding group practice-level public reporting ensures
that more quality data are available to assist consumers with their
decision making. We do appreciate, however, that not all specialties
have a full complement of available quality measures specific to the
work they do currently available through PQRS. As a result, we decided
to make individual EP level Qualified Clinical Data Registry (QCDR)
measures-both PQRS and non-PQRS measures--available for public
reporting starting with 2015 data (79 FR 67774 through 67775). To
further support the availability of quality measure data most relevant
for all specialties, we propose to continue to make available for
public reporting on Physician Compare all individual EP level QCDR PQRS
and non-PQRS measure data that have been collected for at least a full
year. In addition, we are now proposing to also make group practice
level QCDR PQRS and non-PQRS measure data that have been collected for
at least a full year available for public reporting. Previously, the
PQRS program only included QCDR data at the individual EP level. In
this proposed rule, CMS is proposing, under the PQRS, to expand QCDR
data to be available to group practices as well. In this case, group
practice refers to a group of 2 or more EPs billing under the same Tax
Identification Number (TIN). We propose to publicly report these data
annually in the year following the year the measures are reported. For
both EP and group level measures, the measure performance rate will be
represented on the Web site. We solicit comments on these proposals.
The QCDR would be required to declare during its self-nomination if
it plans to post data on its own Web site and allow Physician Compare
to link to it or if the QDCR will provide data to us for public
reporting on Physician Compare. After a QCDR declares a public
reporting method, that decision is final for the reporting year. If a
declaration is not made, the data would be considered available for
public reporting on Physician Compare.
f. Benchmarking
We previously proposed (79 FR 40389) a benchmark that aligned with
the Shared Savings Program ACO benchmark methodology finalized in the
November 2011 Shared Savings Program final rule (76 FR 67898) and
amended in the CY 2014 PFS final rule with comment period (78 FR
74759). Benchmarks are important to ensuring that the quality data
published on Physician Compare are accurately understood. A benchmark
will allow consumers to more easily evaluate the information published
by providing a point of comparison between groups and between
individuals. However, given shortcomings when trying to apply the
Shared Savings Program methodology to the group practice or individual
EP setting, this proposal was not finalized. We noted we would discuss
more thoroughly potential benchmarking methodologies with our
stakeholders and evaluate other programs' methodologies to identify the
best possible option for a benchmark for Physician Compare (79 FR
67772). To accomplish this, we reached out to stakeholders, including
specialty societies, consumer advocacy groups, physicians and other
health care professionals, measure experts, and quality measure
specialists, as well as other CMS Quality Programs. Based on this
outreach and the recommendation of our Technical Expert Panel (TEP), we
propose to publicly report on Physician Compare an item or measure-
level benchmark derived using the Achievable Benchmark of Care
(ABC^TM) \4\ methodology annually based on the PQRS
performance rates most recently available. For instance, in 2017 we
would publicly report a benchmark derived from the 2016 PQRS
performance rates. The specific measures the benchmark would be derived
for would be determined once the data are available and analyzed. The
benchmark would only be applied to those measures deemed valid and
reliable and that are reported by enough EPs or group practices to
produce a valid result (see 79 FR 67764 through 79 FR 67765 for a more
detailed discussion regarding the types of analysis done to ensure data
are suitable for public reporting). We solicit comments on this
proposal.
---------------------------------------------------------------------------

\4\ Kiefe CI, Weissman NW, Allison JJ, Farmer R, Weaver M,
Williams OD. Identifying achievable benchmarks of care: concepts and
methodology. International Journal of Quality Health Care. 1998 Oct;
10(5):443-7.
---------------------------------------------------------------------------

ABC^TM is a well-tested, data-driven methodology that
allows us to account for all of the data collected for a quality
measure, evaluate who the top performers are, and then use that to set
a point of comparison for all of those groups or individual EPs who
report the measure.
ABC^TM starts with the pared-mean, which is the mean of
the best performers on a given measure for at least 10 percent of the
patient population--not the population of reporters. To find the pared-
mean, we will rank order physicians or groups (as appropriate per the
measure being evaluated) in order from highest to lowest performance
score. We will then subset the list by taking the best performers
moving down from best to worst until we have selected enough reporters
to represent 10 percent of all patients in the denominator across all
reporters for that measure.
We will derive the benchmark by calculating the total number of
patients in the highest scoring subset receiving the intervention or
the desired level of care, or achieving the desired outcome, and
dividing this number by the total number of patients that were measured
by the top performing doctors. This produces a benchmark that
represents the best care provided to the top 10 percent of patients.
An Example: A doctor reports which of her patients with diabetes
have maintained their blood pressure at a healthy level. There are four
steps to establishing the benchmark for this measure.
(1) We look at the total number of patients with diabetes for all
doctors who reported this diabetes measure.
(2) We rank doctors that reported this diabetes measure from
highest performance score to lowest performance score to identify the
set of top doctors who treated at least 10 percent of the total number
of patients with diabetes.
(3) We count how many of the patients with diabetes who were
treated by the top doctors also had blood pressure at a healthy level.
(4) This number is divided by the total number of patients with
diabetes

[[Page 41813]]

who were treated by the top doctors, producing the ABC^TM
benchmark.
To account for low denominators, ABC^TM calls for the
calculation of an adjusted performance fraction (AFP), a Bayesian
Estimator. The AFP is calculated by dividing the actual number of
patients receiving the intervention or the desired level of care plus 1
by the total number of patients in the total sample plus 2. This
ensures that very small sample sizes do not over influence the
benchmark and allows all data to be included in the benchmark
calculation. To ensure that a sufficient number of cases are included
by mean performance percent, ABC^TM provides a minimum
sufficient denominator (MSD) for each performance level. Together this
ensures that all cases are appropriately accounted for and adequately
figured in to the benchmark.
The ABC^TM methodology for a publicly reported benchmark
on Physician Compare would be based on the current year's data, so the
benchmark would be appropriate regardless of the unique circumstances
of data collection or the measures available in a given reporting year.
We also propose to use the ABC^TM methodology to generate a
benchmark which can be used to systematically assign stars for the
Physician Compare 5 star rating. ABC^TM has been historically
well received by the health care professionals and entities it is
measuring because the benchmark represents quality while being both
realistic and achievable; it encourages continuous quality improvement;
and, it is shown to lead to improved quality of care.^{5 6 7}
---------------------------------------------------------------------------

\5\ Kiefe CI, Weissman NW, Allison JJ, Farmer R, Weaver M,
Williams OD. Identifying achievable benchmarks of care: concepts and
methodology. International Journal of Quality Health Care. 1998 Oct;
10(5):443-7.
\6\ Kiefe CI, Allison JJ, Williams O, Person SD, Weaver MT,
Weissman NW. Improving Quality Improvement Using Achievable
Benchmarks For Physician Feedback: A Randomized Controlled Trial.
JAMA. 2001;285(22):2871-2879.
\7\ Wessell AM, Liszka HA, Nietert PJ, Jenkins RG, Nemeth LS,
Ornstein S. Achievable benchmarks of care for primary care quality
indicators in a practice-based research network. American Journal of
Medical Quality 2008 Jan-Feb;23(1):39-46.
---------------------------------------------------------------------------

To summarize, we propose to publicly report on Physician Compare an
item or measure-level benchmark derived using the Achievable Benchmark
of Care (ABC^TM) methodology annually based on the PQRS
performance rates most recently available (that is, in 2017 we would
publicly report a benchmark derived from the 2016 PQRS performance
rates), and use this benchmark to systematically assign stars for the
Physician Compare 5 star rating. We solicit comments on this proposal.
g. Patient Experience of Care Measures
In the CY 2015 PFS final rule with comment period (79 FR 67547), we
adopted a policy to publicly report patient experience data for all
group practices of two or more EPs. Consumer testing shows that other
patients' assessments of their experience resonate with consumers
because it is important to them to hear about positive and negative
experiences others have with physicians and other health care
professionals. As a result, consumers report these patient experience
data help them make an informed health care decision. Understanding the
value consumers place on patient experience data and our commitment to
reporting these data on Physician Compare, we propose to continue to
make available for public reporting all patient experience data for all
group practices of two or more EPs, who meet the specified sample size
requirements and collect data via a CMS-specified certified CAHPS
vendor, annually in the year following the year the measures are
reported (for example, 2016 PQRS reported data will be included on the
Web site in 2017). The patient experience data available that we
propose to make available for public reporting are the CAHPS for PQRS
measures, which include the CG-CAHPS core measures. For group
practices, we propose to annually make available for public reporting a
representation of the top box performance rate \8\ for these 12 summary
survey measures:
---------------------------------------------------------------------------

\8\ Top Box score refers to the most favorable response category
for a given measure. If the measure has a scale of ``always,''
``sometimes,'' ``never,'' the Top Box score is ``always'' if this
represents the most favorable response. For the CAHPS for PQRS
doctor rating, the Top Box score is a rating of 9 or 10.
---------------------------------------------------------------------------

Getting Timely Care, Appointments, and Information.
How Well Providers Communicate.
Patient's Rating of Provider.
Access to Specialists.
Health Promotion & Education.
Shared Decision Making.
Health Status/Functional Status.
Courteous and Helpful Office Staff.
Care Coordination.
Between Visit Communication.
Helping You to Take Medication as Directed.
Stewardship of Patient Resources.
We solicit comments on this proposal.
h. Downloadable Database
(a) Addition of VM Information
To further aid in transparency, we also propose to add new data
elements to the Physician Compare downloadable database (https://data.medicare.gov/data/physician-compare). Currently, the downloadable
database includes all quality information publicly reported on
Physician Compare, including quality program participation, and all
measures submitted and reviewed and found to be statistically valid and
reliable. We propose to add to the Physician Compare downloadable
database for group practices and individual EPs the 2018 VM quality
tiers for cost and quality, based on the 2016 data, noting if the group
practice or EP is high, low, or average on cost and quality per the VM.
We also propose to include a notation of the payment adjustment
received based on the cost and quality tiers, and an indication if the
individual EP or group practice was eligible to but did not report
quality measures to CMS. The profile pages on Physician Compare are
meant to provide information to average Medicare consumers that can
help them identify quality health care and choose a quality clinician,
while this database is geared toward health care professionals,
industry insiders, and researchers who are more able to accurately use
more complex data. Therefore, adding this information to the
downloadable database promotes transparency and provides useful data to
the public while we conduct consumer testing to ensure VM data beyond
the indication for an upward adjustment discussed above can be packaged
and explained in such a way that it is accurately interpreted,
understood, and useful to average consumers. We solicit comments on
this proposal.
(b) Addition of Utilization Data
In addition, we propose to add utilization data to the Physician
Compare downloadable database. Utilization data is information
generated from Medicare Part B claims on services and procedures
provided to Medicare beneficiaries by physicians and other health care
professionals; and are currently available at (http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html ). It
provides counts of services and procedures rendered by health care
professionals by Healthcare Common Procedure Coding System (HCPCS)
code. Under section 104(e) of the Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA), Pub. L. 114-10, Sec. 104, signed
into law April 16, 2015; beginning with 2016, the Secretary shall
integrate utilization data information on Physician Compare. This

[[Page 41814]]

section of the law discusses data that can help empower people enrolled
in Medicare by providing access to information about physician
services. These data are very useful to the health care industry and to
health care researchers and other stakeholders who can accurately
interpret these data and use them in meaningful analysis. These data
are less immediately useable in their raw form by the average Medicare
consumer. As a result, we propose that the data be added to the
downloadable database versus the consumer-focused Web site profile
pages. Including these data in the Physician Compare downloadable
database provides transparency without taking away from the information
of most use to consumers on the main Web site. We solicit comments on
this proposal.
(i) Board Certification
Finally, we propose adding additional Board Certification
information to the Physician Compare Web site. Board Certification is
the process of reviewing and certifying the qualifications of a
physician or other health care professional by a board of specialists
in the relevant field. We currently include American Board of Medical
Specialties (ABMS) data as part of individual EP profiles on Physician
Compare. We appreciate that there are additional, well respected boards
that are not included in the ABMS data currently available on Physician
Compare that represent EPs and specialties represented on the Web site.
Such board certification information is of interest to consumers as it
provides additional information to use to evaluate and distinguish
between EPs on the Web site, which can help in making an informed
health care decision. The more data of immediate interest that is
included on Physician Compare, the more users will come to the Web site
and find quality data that can help them make informed decisions.
Specifically, we are now proposing to add to the Web site board
certification information from the American Board of Optometry (ABO)
and American Osteopathic Association (AOA). Please note we are not
endorsing any particular boards. These two specific boards showed
interest in being added to the Web site and have demonstrated that they
have the data to facilitate inclusion of this information on the Web
site. These two boards also fill a gap, as the ABMS does not certify
Optometrists and only certain types of DOs are covered by AMBS
Osteopathic certification. In general, we will review interest from
boards as it is brought to our attention, and if the necessary data are
available and appropriate arrangements and agreements can be made to
share the needed information with Physician Compare, additional board
information could be added to the Web site in future. At this time,
however, we are specifically proposing to include ABO and AOA Board
Certification information on Physician Compare. We solicit comments on
this proposal.
We solicit comments on all proposals. Increasing the measures and
data elements for public reporting on Physician Compare at both the
individual and group level will help accomplish the Web site's twofold
purpose:
To provide more information for consumers to encourage
informed patient choice.
To create explicit incentives for physicians to maximize
performance.
Table 19 summarizes the Physician Compare measure and participation
data proposals detailed in this section.

Table 19--Summary of Proposed Measure and Participation Data for Public Reporting
----------------------------------------------------------------------------------------------------------------
Proposed quality
Data collection year * Publication year Data type Reporting mechanism measures and data for
* public reporting
----------------------------------------------------------------------------------------------------------------
2016..................... 2017 PQRS, PQRS, GPRO, Web Interface, EHR, Include an indicator for
EHR, and Million Registry, Claims. satisfactory reporters
Hearts. under PQRS,
participants in the EHR
Incentive Program, and
EPs who satisfactorily
report the
Cardiovascular
Prevention measures
group proposed under
PQRS in support of
Million Hearts.
2016..................... 2018 PQRS, PQRS, GPRO... Web Interface, EHR, Include an indicator for
Registry, Claims. individual EPs and
group practices who
receive an upward
adjustment for the VM.
2016..................... 2017 PQRS, GPRO......... Web Interface, EHR, All PQRS GPRO measures
Registry. reported via the Web
Interface, EHR, and
registry that are
available for public
reporting for group
practices of 2 or more
EPs.
Publicly report an item-
level benchmark, as
appropriate.
2016..................... 2017 ACO................ Web Interface, All measures reported by
Survey Vendor Shared Savings Program
Claims. ACOs, including CAHPS
for ACOs.
2016..................... 2017 CAHPS for PQRS..... CMS-Specified All CAHPS for PQRS
Certified CAHPS measures for groups of
Vendor. 2 or more EPs who meet
the specified sample
size requirements and
collect data via a CMS-
specified certified
CAHPS vendor.
2016..................... 2017 PQRS............... Registry, EHR, or All PQRS measures for
Claims. individual EPs
collected through a
registry, EHR, or
claims.
Publicly report an item-
level benchmark, as
appropriate.
2016..................... 2017 QCDR data.......... QCDR............... All individual EP and
group practice QCDR
measures.
2016..................... 2017 Utilization data... Claims............. Utilization data for
individual EPs in the
downloadable database.
2016..................... 2017 PQRS, PQRS, GPRO... Web Interface, EHR, The following data for
Registry, Claims. group practices and
individual EPs in the
downloadable database:
The VM quality
tiers for cost and
quality, noting if the
group practice or EP is
high, low, or neutral
on cost and quality per
the VM.
A notation of
the payment adjustment
received based on the
cost and quality tiers.
An indication
if the individual EP or
group practice was
eligible to but did not
report quality measures
to CMS.
----------------------------------------------------------------------------------------------------------------
* Note that these data are proposed to be reported annually. The table only provides the first year in which
these proposals would begin on an annual basis, and such dates also serve to illustrate the data collection
year in relation to the publication year. Therefore, after 2016, 2017 data would be publicly reported in 2018,
2018 data would be publicly reported in 2019, etc.

[[Page 41815]]

4. Seeking Public Comment for Possible Future Rulemaking
a. Quality Measures
In addition to these proposals, we seek comment on several new data
elements for possible inclusion on the individual EP and group profile
pages of Physician Compare. In future years, we will consider expanding
public reporting to include additional quality measures. We know there
are gaps in the measures currently available for public reporting on
Physician Compare. Understanding this, we would like to hear from
stakeholders about the types of quality measures that will help us fill
these gaps and meet the needs of consumers and stakeholders. Therefore,
we seek comment on potential measures that would benefit future public
reporting on Physician Compare. We are working to identify possible
data sources and we seek comment on the measure concepts, as well as
potential specific measures of interest. The quality measures that
would be considered for future posting on Physician Compare are those
that have been comprehensively vetted and tested, and are trusted by
the physician community.
b. Medicare Advantage
We also seek comment on adding Medicare Advantage information to
Physician Compare individual EP and group practice profile pages.
Specifically, we are seeking comment on adding information on the
relevant EP and group practice profile pages about which Medicare
Advantage health plans the EP or group accepts and making this
information a link to more information about that plan on the
Medicare.gov Plan Finder Web site. An increasing number of Medicare
clinicians provide services via Medicare Advantage. Medicare Advantage
quality data is reported via Plan Finder at the plan level. As a
result, physicians and other health care professionals who participate
in Medicare Advantage do not have quality measure data available for
public reporting on Physician Compare. Adding a link between Physician
Compare clinicians participating in Medicare Advantage plans and the
associated quality data available for those plans on Plan Finder
ensures that consumers have access to all of the quality data available
to make an informed health care decision.
c. Value Modifier
We also seek comment on including additional VM cost and quality
data on Physician Compare. Specifically, we seek comment on including
in future years an indicator for a downward and neutral VM adjustment
on group practice and individual EP profile pages. We also seek comment
on including the VM quality composite or other VM quality performance
data on Physician Compare group practice and individual EP profile
pages and/or the Physician Compare downloadable database. Similarly, we
seek comment on including the VM cost composite or other VM cost
measure data on Physician Compare group practice and individual EP
profile pages and/or the downloadable database. These VM quality and
cost measures ultimately help determine the payment adjustment and are
an indication of whether the individual or group is meeting the
Affordable Care Act goals of improving quality while lowering cost.
Specifically, including this cost data is consistent with the section
10331(a)(2) of the Affordable Care Act as it is an assessment of
efficiency. However, these data are complex and we need time to
establish the best method for public reporting and to ensure this
information is accurately understood and interpreted by consumers.
Therefore, we only seek comment at this time.
d. Open Payments Data
We currently make Open Payments data available at http://www.cms.gov/openpayments/. Consumer testing has indicated that these
data are of great interest to consumers. Consumers have indicated that
this level of transparency is important to them and access to this
information on Physician Compare increases their ability to find and
evaluate the information. We seek comment about including Open Payments
data on individual EP profile pages. Although these data are already
publicly available, consumer testing has also indicated that additional
context, wording, and data display considerations can help consumers
better understand the information. We are now seeking comment on adding
these data to Physician Compare; to the extent it is feasible and
appropriate. Prior to considering a formal proposal, we can continue to
test these data with consumers to establish the context and framing
needed to best ensure these data are accurately understood and
presented in a way that assists decision making. Therefore, we only
seek comment at this time.
e. Measure Stratification
Finally, we seek comment on including individual EP and group
practice-level quality measure data stratified by race, ethnicity, and
gender on Physician Compare, if feasible and appropriate (i.e.
statistically appropriate, etc.). By stratification we mean that we
will report quality measures for each group of a given category. For
example, if we were to report a measure for blood pressure control
stratified by sex, we would report a performance score for women and
one for men. We also seek comment on potential quality measures,
including composite measures, for future postings on Physician Compare
that could help consumers and stakeholders monitor trends in health
equity. Inclusion of data stratified by race and ethnicity and gender,
as well as the inclusion of other measures of health equity would help
ensure that HHS is beginning to work to fulfill one of the Affordable
Care Act goals of reporting data on race, ethnicity, sex, primary
language, and disability status through public postings on HHS Web
sites and other dissemination strategies (see ACA Section 4302).
We are specifically seeking comment on these issues. Any data
recommended in these areas for public disclosure on Physician Compare
would be addressed through separate notice-and-comment rulemaking.

I. Physician Payment, Efficiency, and Quality Improvements--Physician
Quality Reporting System

This section contains the proposed requirements for the Physician
Quality Reporting System (PQRS). The PQRS, as set forth in sections
1848(a), (k), and (m) of the Act, is a quality reporting program that
provides incentive payments (which ended in 2014) and payment
adjustments (which began in 2015) to eligible professionals (EPs) and
group practices based on whether they satisfactorily report data on
quality measures for covered professional services furnished during a
specified reporting period or to individual EPs based on whether they
satisfactorily participate in a qualified clinical data registry
(QCDR). Please note that section 101(b)(2)(A) of the Medicare Access
and CHIP Reauthorization Act of 2015 (Pub. L. 114-10, enacted on April
16, 2015) (MACRA) amends section 1848(a)(8)(A) by striking ``2015 or
any subsequent year'' and inserting ``each of 2015 through 2018.'' This
amendment authorizes the end of the PQRS in 2018 and beginning of a new
program, which may incorporate aspects of the PQRS, the Merit-based
Incentive Payment System (MIPS).
The proposed requirements primarily focus on our proposals related
to the 2018 PQRS payment adjustment, which will be based on an EP's or
a group practice's reporting of quality measures

[[Page 41816]]

data during the 12-month calendar year reporting period occurring in
2016 (that is, January 1 through December 31, 2016). Please note that,
in developing these proposals, we focused on aligning our requirements,
to the extent appropriate and feasible, with other quality reporting
programs, such as the Medicare Electronic Health Record (EHR) Incentive
Program for EPs, the Physician Value-Based Payment Modifier (VM), and
the Medicare Shared Savings Program. In previous years, we have made
various strides in our ongoing efforts to align the reporting
requirements in CMS' quality reporting programs to reduce burden on the
EPs and group practices that participate in these programs. We continue
to focus on alignment as we develop our proposals for the 2018 PQRS
payment adjustment below.
In addition, please note that, in our quality programs, we are
beginning to emphasize the reporting of certain types of measures, such
as outcome measures, as well as measures within certain NQS domains.
Indeed, in its March 2015 report (available at http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=79068) the Measure Applications
Partnership (MAP) has suggested that CMS place an emphasis on higher
quality measures, such as functional outcome measures. For example, in
the PQRS, we have placed an emphasis on the reporting of the Consumer
Assessment of Healthcare Providers and Systems (CAHPS) for PQRS survey
and cross-cutting measures that promote the health of larger
populations and that are applicable to a larger number of patients. As
discussed further in this section, we are proposing to require the
reporting of the CAHPS for PQRS survey for groups of 25 or more EPs who
register to participate in the PQRS Group Practice Reporting Option
(GPRO) and select the GPRO web interface as the reporting mechanism. In
addition, we are proposing to continue to require the reporting of at
least 1 applicable cross-cutting measure if an EP sees at least 1
Medicare patient. Furthermore, when reporting measures via a QCDR, we
emphasize the reporting of outcome measures, as well as resource use,
patient experience of care, efficiency/appropriate use, or patient
safety measures.
The PQRS regulations are specified in Sec. 414.90. The program
requirements for the 2007 through 2014 PQRS incentives and the 2015
through 2017 PQRS payment adjustments that were previously established,
as well as information on the PQRS, including related laws and
established requirements, are available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. In
addition, the 2013 PQRS and eRx Experience Report, which provides
information about EP participation in PQRS, is available for download
at http://cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2013_PQRS_eRx_Experience_Report_zip.zip.
1. The Definition of EP for Purposes of Participating in the PQRS
CMS implemented the first PQRS payment adjustment on January 1,
2015. Specifically, EPs who did not satisfactorily report data on
quality measures during the 12-month calendar year reporting period
occurring in 2013 are receiving a 1.5 percent negative adjustment
during CY 2015 on all of the EPs' Part B covered professional services
under the Medicare Physician Fee Schedule (PFS). The 2015 PQRS payment
adjustment applies to payments for all of the EPs' Part B covered
professional services furnished under the PFS. We received many
questions surrounding who must participate in the PQRS to avoid the
PQRS payment adjustment. As such, we seek to clarify here who is
required to participate in the PQRS for purposes of the payment
adjustments in this rule.
Please note that there are no hardship or low volume exemptions for
the PQRS payment adjustment. All EPs who furnish covered professional
services must participate in the PQRS each year by meeting the criteria
for satisfactory reporting--or, in lieu of satisfactory reporting,
satisfactory participation in a QCDR--to avoid the PQRS payment
adjustments.
The PQRS payment adjustment applies to EPs who furnish covered
professional services. The definition of an EP for purposes of
participating in the PQRS is specified in section 1848(k)(3)(B) of the
Act. Specifically, the term ``eligible professional'' (EP) means any of
the following: (i) A physician; (ii) a practitioner described in
section 1842(b)(18)(C); (iii) a physical or occupational therapist or a
qualified speech-language pathologist; or (iv) beginning with 2009, a
qualified audiologist (as defined in section 1861(ll)(3)(B)). The term
``covered professional services'' is defined in section 1848(k)(3)(A)
of the Act to mean services for which payment is made under, or is
based on, the Medicare PFS established under section 1848 and which are
furnished by an EP.
EPs in Critical Access Hospitals Billing under Method II (CAH-IIs):
We note that EPs in critical access hospitals billing under Method II
(CAH-IIs) were previously not able to participate in the PQRS. Due to a
change we made in the manner in which EPs in CAH-IIs are reimbursed by
Medicare, it is now feasible for EPs in CAH-IIs to participate in the
PQRS. EPs in CAH-IIs may participate in the PQRS using ALL reporting
mechanisms available, including the claims-based reporting mechanism.
EPs Who Practice in Rural Health Clinics (RHCs) and/or Federally
Qualified Health Centers (FQHCs): Services furnished at RHCs and/or
FQHCs for which payment is not made under, or based on, the Medicare
PFS, or which are not furnished by an EP, are not subject to the PQRS
negative payment adjustment. With respect to EPs who furnish covered
professional services at RHCs and/or FQHCs that are paid under the
Medicare PFS, we note that we are currently unable to assess PQRS
participation for these EPs due to the way in which these EPs bill for
services under the PFS. Therefore, EPs who practice in RHCs and/or
FQHCs would not be subject to the PQRS payment adjustment.
EPs Who Practice in Independent Diagnostic Testing Facilities
(IDTFs) and Independent Laboratories (ILs): We note that due to the way
IDTF and IL suppliers and their employee EPs are enrolled with Medicare
and claims are submitted for services furnished by these suppliers and
billed by the IDTF or IL, we are unable to assess PQRS participation
for these EPs. Therefore, claims submitted for services performed by
EPs who perform services as employee of, or on a reassignment basis to,
IDTFs or ILs would not be subject to the PQRS payment adjustment.
2. Requirements for the PQRS Reporting Mechanisms
The PQRS includes the following reporting mechanisms: Claims;
qualified registry; EHR (including direct EHR products and EHR data
submission vendor products); the GPRO web interface; certified survey
vendors, for CAHPS for PQRS survey measures; and the QCDR. Under the
existing PQRS regulation, Sec. 414.90(h) through (k) govern which
reporting mechanisms are available for use by individuals and group
practices for the PQRS incentive and payment adjustment. This section
contains our proposals to change the QCDR and qualified registry
reporting mechanisms. Please note that we are not proposing to make
changes to the other PQRS reporting mechanisms.
One of our goals, as indicated in the Affordable Care Act, is to
report data on

[[Page 41817]]

race, ethnicity, sex, primary language, and disability status. A
necessary step toward fulfilling this mission is the collection and
reporting of quality data, stratified by race, ethnicity, sex, primary
language, and disability status. The agency intends to require the
collection of these data elements within each of the PQRS reporting
mechanisms. Although we are not proposing in this proposed rule to
require the collection of these data elements, we are seeking comments
regarding the facilitators and obstacles providers and vendors may face
in collecting and reporting these attributes. Additionally, we seek
comments on preference for a phased-in approach, perhaps starting with
a subset of measures versus a requirement across all possible measures
and mechanisms with an adequate timeline for implementation.
a. Proposed Changes to the Requirements for the QCDR
We are required, under section 1848(m)(3)(E)(i) of the Act, to
establish requirements for an entity to be considered a QCDR. Such
requirements must include a requirement that the entity provide the
Secretary with such information, at such times, and in such manner as
the Secretary determines necessary to carry out this subsection.
Section 1848(m)(3)(E)(iv) of the Act, as added by section 601(b)(1)(B)
of the American Taxpayer Relief Act of 2012 (ATRA), requires CMS to
consult with interested parties in carrying out this provision. Below,
we seek to clarify issues related to QCDR self-nomination, as well as
propose a change related to the requirements for an entity to become a
QCDR.
Who May Apply to Self-Nominate to Become a QCDR: We have received
many questions related to what entities may participate in the PQRS as
a QCDR. We note that Sec. 414.90(b) defines a QCDR as a CMS-approved
entity that has self-nominated and successfully completed a
qualification process showing that it collects medical and/or clinical
data for the purpose of patient and disease tracking to foster
improvement in the quality of care provided to patients. A QCDR must
perform the following functions:
Submit quality measures data or results to CMS for
purposes of demonstrating that, for a reporting period, its EPs have
satisfactorily participated in PQRS. A QCDR must have in place
mechanisms for the transparency of data elements and specifications,
risk models, and measures.
Submit to CMS, for purposes of demonstrating satisfactory
participation, quality measures data on multiple payers, not just
Medicare patients.
Provide timely feedback, at least four times a year, on
the measures at the individual participant level for which the QCDR
reports on the EP's behalf for purposes of the individual EP's
satisfactory participation in the QCDR.
Possess benchmarking capacity that compares the quality of
care an EP provides with other EPs performing the same or similar
functions.
We established further details regarding the requirements to become
a QCDR in the CYs 2014 and 2015 PFS final rules (78 FR 74467 through
74473 and 79 FR 67779 through 67782). Please note that the requirements
we established were not meant to prohibit entities that meet the basic
definition of a QCDR outlined in Sec. 414.90(b) from self-nominating
to participate in the PQRS as a QCDR. As long as the entity meets the
basic definition of a QCDR provided in Sec. 414.90(b), we encourage
the entity to self-nominate to become a QCDR.
Self-Nomination Period: We established a deadline for an entity
becoming a QCDR to submit a self-nomination statement--specifically,
self-nomination statements must be received by CMS by 5:00 p.m.,
eastern standard time (e.s.t.), on January 31 of the year in which the
clinical data registry seeks to be qualified (78 FR 74473). However, we
did not specify when the QCDR self-nomination period opens. We received
feedback from entities that believed they needed more time to self-
nominate. Typically, we open the self-nomination period on January 1 of
the year in which the clinical data registry seeks to be qualified.
While it is not technically feasible for us to extend the self-
nomination deadline past January 31, we will open the QCDR self-
nomination period on December 1 of the prior year to allow more time
for entities to self-nominate. This would provide entities with an
additional month to self-nominate.
Proposed Establishment of a QCDR Entity: In the CY 2014 PFS final
rule (78 FR 74467), we established the requirement that, for an entity
to become qualified for a given year, the entity must be in existence
as of January 1 the year prior to the year for which the entity seeks
to become a QCDR (for example, January 1, 2013, to be eligible to
participate for purposes of data collected in 2014). We established
this criterion to ensure that an entity seeking to become a QCDR is
well-established prior to self-nomination. We have received feedback
from entities that this requirement is overly burdensome, as it delays
entities otherwise fully capable of becoming a QCDR from participating
in the PQRS. To address these concerns while still ensuring that an
entity seeking to become a QCDR is well-established, beginning in 2016,
we propose to modify this requirement to require the following: For an
entity to become qualified for a given year, the entity must be in
existence as of January 1 the year for which the entity seeks to become
a QCDR (for example, January 1, 2016, to be eligible to participate for
purposes of data collected in 2016). We invite public comment on this
proposal.
Attestation Statements for QCDRs Submitting Quality Measures Data
during Submission: In the CY 2014 PFS final rule, to ensure that the
data provided by the QCDR is correct, we established the requirement
that QCDRs provide CMS a signed, written attestation statement via
email which states that the quality measure results and any and all
data, including numerator and denominator data, provided to CMS are
accurate and complete (78 FR 74472). In lieu of submitting an
attestation statement via email, beginning in 2016, we propose to allow
QCDRs to attest during the data submission period that the quality
measure results and any and all data including numerator and
denominator data provided to CMS will be accurate and complete using a
web-based check box mechanism available at https://www.qualitynet.org/portal/server.pt/community/pqri_home/212. We believe it is less
burdensome for QCDRs to check a box acknowledging and attesting to the
accuracy of the data they provide, rather than having to email a
statement to CMS. Please note that, if this proposal is finalized,
QCDRs will no longer be able to submit this attestation statement via
email. We invite public comment on this proposal.
In addition, we noted in the CY 2015 PFS final rule (79 FR 67903)
that entities wishing to become QCDRs would have until March 31 of the
year in which it seeks to become a QCDR to submit measure information
the entity intends to report for the year, which included submitting
the measure specifications for non-PQRS measures the QCDR intends to
report for the year. However, we have experienced issues related to the
measures data we received during the 2013 reporting year. These issues
prompt us to more closely analyze the measures for which an entity
intends to report as a QCDR. Therefore, so that we may vet and analyze
these vendors to determine whether they are fully ready to be qualified
to participate in the PQRS as a QCDR, we propose to require that all

[[Page 41818]]

other documents that are necessary to analyze the vendor for
qualification be provided to CMS at the time of self-nomination, that
is, by no later than January 31 of the year in which the vendor intends
to participate in the PQRS as a QCDR (that is, January 31, 2016 to
participate as a QCDR for the reporting periods occurring in 2016).
This includes, but is not limited to, submission of the vendor's data
validation plan as well as the measure specifications for the non-PQRS
measures the entity intends to report. In addition, please note that
after the entity submits this information on January 31, it cannot
later change any of the information it submitted to us for purposes of
qualification. For example, once an entity submits measure
specifications on non-PQRS measures, it cannot later modify the
measures specifications the entity submitted. Please note that this
does not prevent the entity from providing supplemental information if
requested by CMS.
Data Validation Requirements: A validation strategy details how the
qualified registry will determine whether EPs and GPRO group practices
have submitted data accurately and satisfactorily on the minimum number
of their eligible patients, visits, procedures, or episodes for a given
measure. Acceptable validation strategies often include such provisions
as the qualified registry being able to conduct random sampling of
their participant's data, but may also be based on other credible means
of verifying the accuracy of data content and completeness of reporting
or adherence to a required sampling method. The current guidance on
validation strategy is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_RegistryVendorCriteria.pdf. In analyzing our requirements, we
believe adding the following additional requirements will help mitigate
issues that may occur when collecting, calculating, and submitting
quality measures data to CMS. Therefore, we propose that, beginning in
2016, a QCDR must provide the following information to CMS at the time
of self-nomination to ensure that QCDR data is valid:
Organization Name (Specify Sponsoring Organization name
and qualified registry name if the two are different).
Program Year.
Vendor Type (for example, qualified registry).
Provide the method(s) by which the entity obtains data
from its customers: claims, web-based tool, practice management system,
EHR, other (please explain). If a combination of methods (Claims, Web
Based Tool, Practice Management System, EHR, and/or other) is utilized,
please state which method(s) the entity utilizes to collect reporting
numerator and denominator data.
Indicate the method the entity will use to verify the
accuracy of each Tax Identification Number (TIN) and National Provider
Identifier's (NPI) it is intending to submit (that is, National Plan
and Provider Enumeration System (NPPES), CMS claims, tax
documentation).
Describe the method that the entity will use to accurately
calculate both reporting rates and performance rates for measures and
measures groups based on the appropriate measure type and
specification. For composite measures or measures with multiple
performance rates, the entity must provide us with the methodology the
entity uses for these composite measures and measures with multiple
performance rates.
Describe the process that the entity will use for
completion of a randomized audit of a subset of data prior to the
submission to CMS. Periodic examinations may be completed to compare
patient record data with submitted data and/or ensure PQRS measures
were accurately reported based on the appropriate Measure
Specifications (that is, accuracy of numerator, denominator, and
exclusion criteria).
If applicable, provide information on the entity's
sampling methodology. For example, it is encouraged that 3 percent of
the TIN/NPIs be sampled with a minimum sample of 10 TIN/NPIs or a
maximum sample of 50 TIN/NPIs. For each TIN/NPI sampled, it is
encouraged that 25 percent of the TIN/NPI's patients (with a minimum
sample of 5 patients or a maximum sample of 50 patients) should be
reviewed for all measures applicable to the patient.
Define a process for completing a detailed audit if the
qualified registry's validation reveals inaccuracy and describe how
this information will be conveyed to CMS.
QCDRs must perform the validation outlined in the validation
strategy and send evidence of successful results to CMS for data
collected in the reporting periods occurring in 2016. The Data
Validation Execution Report must be sent via email to the QualityNet
Help Desk at [email protected] by 5:00 p.m. ET on June 30, 2016. The
email subject should be ``PY2015 Qualified Registry Data Validation
Execution Report.''
Submission of Quality Measures Data for Group Practices: Section
101(d)(1)(B) of the MACRA amends section 1848(m)(3)(D) of the Act by
inserting ``and, for 2016 and subsequent years, subparagraph (A) or
(C)'' after ``subparagraph (A)''. This change authorizes CMS to create
an option for EPs participating in the GPRO to report quality measures
via a QCDR. As such, in addition to being able to submit quality
measures data for individual EPs, we propose that QCDRs also have the
ability to submit quality measures data for group practices.
b. Proposed Changes to the Requirements for Qualified Registries
Attestation Statements for Registries Submitting Quality Measures
Data: In the CY 2013 PFS final rule, we finalized the following
requirement to ensure that the data provided by a registry is correct:
We required that the registry provide CMS a signed, written attestation
statement via mail or email which states that the quality measure
results and any and all data including numerator and denominator data
provided to CMS are accurate and complete for each year the registry
submits quality measures data to CMS (77 FR 69180). In lieu of
submitting an attestation statement via email or mail, beginning in
2016, we propose to allow registries to attest during the submission
period that the quality measure results and any and all data including
numerator and denominator data provided to CMS will be accurate and
complete using a web-based check box mechanism available at https://www.qualitynet.org/portal/server.pt/community/pqri_home/212. We believe
it is less burdensome for registries to check a box acknowledging and
attesting to the accuracy of the data they provide, rather than having
to email a statement to CMS. Please note that, if this proposal is
finalized, qualified registries will no longer be able to submit this
attestation statement via email or mail. We invite public comment on
this proposal.
In addition, so that we may vet and analyze these vendors to
determine whether they are fully ready to be qualified to participate
in the PQRS as a qualified registry, we propose to require that all
other documents that are necessary to analyze the vendor for
qualification be provided to CMS at the time of self-nomination, that
is, by no later than January 31 of the year in which the vendor intends
to participate in the PQRS as a qualified registry (that is, January
31, 2016 to participate as a qualified registry for the reporting
periods occurring in 2016). This

[[Page 41819]]

includes, but is not limited to, submission of the vendor's data
validation plan. Please note that this does not prevent the entity from
providing supplemental information if requested by CMS.
Data Validation Requirements: A validation strategy details how the
qualified registry will determine whether EPs and GPRO group practices
have submitted accurately and satisfactorily on the minimum number of
their eligible patients, visits, procedures, or episodes for a given
measure. Acceptable validation strategies often include such provisions
as the qualified registry being able to conduct random sampling of
their participant's data, but may also be based on other credible means
of verifying the accuracy of data content and completeness of reporting
or adherence to a required sampling method. The current guidance on
validation strategy is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_RegistryVendorCriteria.pdf. In analyzing our requirements, we
believe adding the following additional requirements will help mitigate
issues that may occur when collecting, calculating, and submitting
quality measures data to CMS. Therefore, we propose that, beginning in
2016, a QCDR must provide the following information to CMS at the time
of self-nomination to ensure that data submitted by a qualified
registry is valid:
Organization Name (specify the sponsoring entity name and
qualified registry name if the two are different).
Program Year.
Vendor Type (for example, qualified registry).
Provide the method(s) by which the entity obtains data
from its customers: claims, web-based tool, practice management system,
EHR, other (please explain). If a combination of methods (Claims, Web
Based Tool, Practice Management System, EHR, and/or other) is utilized,
please state which method(s) the entity utilizes to collect its
reporting numerator and denominator data.
Indicate the method the entity will use to verify the
accuracy of each TIN and NPI it is intending to submit (that is, NPPES,
CMS claims, tax documentation).
Describe how the entity will verify that EPs or group
practices report on at least 1 measure contained in the cross-cutting
measure set if the EP or group practice sees at least 1 Medicare
patient in a face-to-face encounter. Describe how the entity will
verify that the data provided is complete and contains the entire
cohort of data.
Describe the method that the entity will use to accurately
calculate both reporting rates and performance rates for measures and
measures groups based on the appropriate measure type and
specification.
Describe the method the entity will use to verify that
only the measures in the applicable PQRS Claims and Registry Individual
Measure Specifications (that is, the 2016 PQRS Claims and Registry
Individual Measure Specifications for data submitted for reporting
periods occurring in 2016) and applicable PQRS Claims and Registry
Measures Groups Specifications (that is, the 2016 PQRS Claims and
Registry Measures Groups Specifications for data submitted for
reporting periods occurring in 2016) are utilized for submission.
Describe the process that the entity will use for
completion of a randomized audit of a subset of data prior to the
submission to CMS. Periodic examinations may be completed to compare
patient record data with submitted data and/or ensure PQRS measures
were accurately reported based on the appropriate Measure
Specifications (that is, accuracy of numerator, denominator, and
exclusion criteria).
If applicable, provide information on the entity's
sampling methodology. For example, it is encouraged that 3 percent of
the TIN/NPIs be sampled with a minimum sample of 10 TIN/NPIs or a
maximum sample of 50 TIN/NPIs. For each TIN/NPI sampled, it is
encouraged that 25 percent of the TIN/NPI's patients (with a minimum
sample of 5 patients or a maximum sample of 50 patients) should be
reviewed for all measures applicable to the patient.
Define a process for completing a detailed audit if the
qualified registry's validation reveals inaccuracy and describe how
this information will be conveyed to CMS.
Registries must maintain the ability to randomly request
and receive documentation from providers to verify accuracy of data.
Registries must also provide CMS access to review the Medicare
beneficiary data on which the applicable PQRS registry-based
submissions are based or provide to CMS a copy of the actual data (if
requested for validation purposes).
Qualified registries must perform the validation outlined in the
validation strategy and send evidence of successful results to CMS for
data collected for the applicable reporting periods. The Data
Validation Execution Report must be sent via email to the QualityNet
Help Desk at [email protected] by 5:00 p.m. ET on June 30 of the
year in which the reporting period occurs (that is, June 30, 2016 for
reporting periods occurring in 2016). The email subject should be
``PY2015 Qualified Registry Data Validation Execution Report.''
c. Auditing of Entities Submitting PQRS Quality Measures Data
We are in the process of auditing PQRS participants, including
vendors who submit quality measures data. We believe it is essential
for vendors to corporate with this audit process. In order to ensure
that CMS has adequate information to perform an audit of a vendor, we
are proposing that, beginning in 2016, any vendor submitting quality
measures data for the PQRS (for example, entities participating the
PQRS as a qualified registry, QCDR, direct EHR, or DSV) comply with the
following requirements:
The vendor make available to CMS the contact information
of each EP on behalf of whom it submits data. The contact information
will include, at a minimum, the EP practice's phone number, address,
and, if applicable email.
The vendor must retain all data submitted to CMS for the
PQRS program for a minimum of seven years.
We invite public comment on these proposals.
3. Proposed Criteria for the Satisfactory Reporting for Individual EPs
for the 2018 PQRS Payment Adjustment
Section 1848(a)(8) of the Act, as added by section 3002(b) of the
Affordable Care Act, provides that for covered professional services
furnished by an EP during 2015 or any subsequent year, if the EP does
not satisfactorily report data on quality measures for covered
professional services for the quality reporting period for the year,
the fee schedule amount for services furnished by such professional
during the year (including the fee schedule amount for purposes of
determining a payment based on such amount) shall be equal to the
applicable percent of the fee schedule amount that would otherwise
apply to such services. For 2016 and subsequent years, the applicable
percent is 98.0 percent.
a. Proposed Criterion for the Satisfactory Reporting of Individual
Quality Measures via Claims and Registry for Individual EPs for the
2018 PQRS Payment Adjustment
We finalized the following criteria for satisfactory reporting for
the submission of individual quality measures via

[[Page 41820]]

claims and registry for 2017 PQRS payment adjustment (see Table 50 at
79 FR 67796): For the applicable 12-month reporting period, the EP
would report at least 9 measures, covering at least 3 of the NQS
domains, OR, if less than 9 measures apply to the EP, report on each
measure that is applicable, AND report each measure for at least 50
percent of the Medicare Part B FFS patients seen during the reporting
period to which the measure applies. Measures with a 0 percent
performance rate would not be counted. For an EP who reports fewer than
9 measures covering less than 3 NQS domains via the claims- or
registry-based reporting mechanism, the EP would be subject to the
measure application validity (MAV) process, which would allow us to
determine whether the EP should have reported quality data codes for
additional measures. To meet the criteria for the 2017 PQRS payment
adjustment, we added the following requirement: Of the measures
reported, if the EP sees at least 1 Medicare patient in a face-to-face
encounter, as we propose to define that term below, the EP would report
on at least 1 measure contained in the PQRS cross-cutting measure set.
To be consistent with the satisfactory reporting criterion we
finalized for the 2017 PQRS payment adjustment, we are proposing to
amend Sec. 414.90(j) to specify the same criterion for individual EPs
reporting via claims and registry for the 2018 PQRS payment adjustment.
Specifically, for the 12-month reporting period for the 2018 PQRS
payment adjustment, the EP would report at least 9 measures, covering
at least 3 of the NQS domains AND report each measure for at least 50
percent of the EP's Medicare Part B FFS patients seen during the
reporting period to which the measure applies. Of the measures
reported, if the EP sees at least 1 Medicare patient in a face-to-face
encounter, as we propose to define that term below, the EP would report
on at least 1 measure contained in the PQRS cross-cutting measure set.
If less than 9 measures apply to the EP, the EP would report on each
measure that is applicable, AND report each measure for at least 50
percent of the Medicare Part B FFS patients seen during the reporting
period to which the measure applies. Measures with a 0 percent
performance rate would not be counted.
For what defines a ``face-to-face'' encounter, for purposes of
proposing to require reporting of at least 1 cross-cutting measure, we
propose to determine whether an EP had a ``face-to-face'' encounter by
assessing whether the EP billed for services under the PFS that are
associated with face-to-face encounters, such as whether an EP billed
general office visit codes, outpatient visits, and surgical procedures.
We would not include telehealth visits as face-to-face encounters for
purposes of the proposal requiring reporting of at least 1 cross-
cutting measure. For our current list of face-to-face encounter codes
for the requirement to report a cross-cutting measure, please see
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/FacetoFace_Encounter_CodeList_01302015.zip.
In addition, we understand that there may be instances where an EP
may not have at least 9 measures applicable to an EP's practice. In
this instance, like the criterion we finalized for the 2017 payment
adjustment (see Table 50 at 79 FR 67796), an EP reporting on less than
9 measures would still be able to meet the satisfactory reporting
criterion via claims and registry if the EP reports on each measure
that is applicable to the EP's practice. If an EP reports on less than
9 measures, the EP would be subject to the MAV process, which would
allow us to determine whether an EP should have reported quality data
codes for additional measures. In addition, the MAV process will also
allow us to determine whether an EP should have reported on any of the
PQRS cross-cutting measures. The MAV process we are proposing to
implement for claims and registry is the same process that was
established for reporting periods occurring in 2015 for the 2017 PQRS
payment adjustment. For more information on the claims and registry MAV
process, please visit the measures section of the PQRS Web site at
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/MeasuresCodes.html.
We seek public comment on our proposed satisfactory reporting
criteria for individual EPs reporting via claims or registry for the
2018 PQRS payment adjustment.
b. Proposed Criterion for Satisfactory Reporting of Individual Quality
Measures via EHR for Individual EPs for the 2018 PQRS Payment
Adjustment
We finalized the following criterion for the satisfactory reporting
for individual EPs reporting individual measures via a direct EHR
product or an EHR data submission vendor product for the 2017 PQRS
payment adjustment (see Table 50 at 79 FR 67796): For the applicable
12-month reporting period, report at least 9 measures covering at least
3 of the NQS domains. If an EP's direct EHR product or EHR data
submission vendor product does not contain patient data for at least 9
measures covering at least 3 domains, then the EP must report all of
the measures for which there is Medicare patient data. Although all-
payer data may be included in the file, an EP must report on at least 1
measure for which there is Medicare patient data for their submission
to be considered for PQRS.
To be consistent with the criterion we finalized for the 2017 PQRS
payment adjustment, as well as to continue to align with the final
criterion for meeting the clinical quality measure (CQM) component of
achieving meaningful use under the Medicare EHR Incentive Program, we
are proposing to amend Sec. 414.90(j) to specify the criterion for the
satisfactory reporting for individual EPs to report individual measures
via a direct EHR product or an EHR data submission vendor product for
the 2018 PQRS payment adjustment. Specifically, the EP would report at
least 9 measures covering at least 3 of the NQS domains. If an EP's
direct EHR product or EHR data submission vendor product does not
contain patient data for at least 9 measures covering at least 3
domains, then the EP would be required to report all of the measures
for which there is Medicare patient data. An EP would be required to
report on at least 1 measure for which there is Medicare patient data.
We seek public comment on this proposal.
c. Proposed Criterion for Satisfactory Reporting of Measures Groups via
Registry for Individual EPs for the 2018 PQRS Payment Adjustment
We finalized the following criterion for the satisfactory reporting
for individual EPs to report measures groups via registry for the 2017
PQRS payment adjustment (see Table 50 at 79 FR 67796): For the
applicable 12-month reporting period, report at least 1 measures group
AND report each measures group for at least 20 patients, the majority
(11 patients) of which must be Medicare Part B FFS patients. Measures
groups containing a measure with a 0 percent performance rate will not
be counted.
To be consistent with the criterion we finalized for the 2017 PQRS
payment adjustment, we are proposing to amend Sec. 414.90(j) to
specify the same criterion for the satisfactory reporting for
individual EPs to report measures groups via registry for the 2018 PQRS
payment adjustment. Specifically, for the 12-month reporting period for
the 2018 PQRS payment adjustment, the EP would report at least 1
measures group AND report each measures group for at

[[Page 41821]]

least 20 patients, the majority (11 patients) of which would be
required to be Medicare Part B FFS patients. Measures groups containing
a measure with a 0 percent performance rate would not be counted.
We seek public comment on our proposed satisfactory reporting
criterion for individual EPs reporting measures groups via registry for
the 2018 PQRS payment adjustment.
4. Satisfactory Participation in a QCDR by Individual EPs
Section 601(b) of the ATRA amended section 1848(m)(3) of the Act,
by redesignating subparagraph (D) as subparagraph (F) and adding new
subparagraphs (D) and (E), to provide for a new standard for individual
EPs to satisfy the PQRS beginning in 2014, based on satisfactory
participation in a QCDR.
a. Proposed Criterion for the Satisfactory Participation for Individual
EPs in a QCDR for the 2018 PQRS Payment Adjustment
Section 1848(a)(8) of the Act provides that for covered
professional services furnished by an EP during 2015 or any subsequent
year, if the EP does not satisfactorily report data on quality measures
for covered professional services for the quality reporting period for
the year, the fee schedule amount for services furnished by such
professional during the year shall be equal to the applicable percent
of the fee schedule amount that would otherwise apply to such services.
For 2016 and subsequent years, the applicable percent is 98.0 percent.
Section 1848(m)(3)(D) of the Act, as added by section 601(b) of the
ATRA, authorizes the Secretary to treat an individual EP as
satisfactorily submitting data on quality measures under section
1848(m)(3)(A) of the Act if, in lieu of reporting measures under
section 1848(k)(2)(C) of the Act, the EP is satisfactorily
participating in a QCDR for the year. ``Satisfactory participation'' is
a relatively new standard under the PQRS and is an analogous standard
to the standard of ``satisfactory reporting'' data on covered
professional services that EPs who report through other mechanisms must
meet to avoid the PQRS payment adjustment. Currently, Sec.
414.90(e)(2) states that individual EPs must be treated as
satisfactorily reporting data on quality measures if the individual EP
satisfactorily participates in a QCDR.
To be consistent with the number of measures reported for the
satisfactory participation criterion we finalized for the 2017 PQRS
payment adjustment (see Table 50 at 79 FR 67796), for purposes of the
2018 PQRS payment adjustment (which would be based on data reported
during the 12-month period that falls in CY 2016), we propose to revise
Sec. 414.90(k) to use the same criterion for individual EPs to
satisfactorily participate in a QCDR for the 2018 PQRS payment
adjustment. Specifically, for the 12-month reporting period for the
2018 PQRS payment adjustment, the EP would report at least 9 measures
available for reporting under a QCDR covering at least 3 of the NQS
domains, AND report each measure for at least 50 percent of the EP's
patients. Of these measures, the EP would report on at least 2 outcome
measures, OR, if 2 outcomes measures are not available, report on at
least 1 outcome measures and at least 1 of the following types of
measures--resource use, patient experience of care, efficiency/
appropriate use, or patient safety.
We seek public comment on this proposal.
5. Proposed Criteria for Satisfactory Reporting for Group Practices
Participating in the GPRO
In lieu of reporting measures under section 1848(k)(2)(C) of the
Act, section 1848(m)(3)(C) of the Act provides the Secretary with the
authority to establish and have in place a process under which EPs in a
group practice (as defined by the Secretary) shall be treated as
satisfactorily submitting data on quality measures. Accordingly, this
section III.K.4 contains our proposed satisfactory reporting criteria
for group practices participating in the GPRO. Please note that, for a
group practice to participate in the PQRS GPRO in lieu of participating
as individual EPs, a group practice is required to register to
participate in the PQRS GPRO. For more information on GPRO
participation, please visit http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Group_Practice_Reporting_Option.html. For more information on
registration, please visit http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Self-Nomination-Registration.html.
a. The CAHPS for PQRS Survey
In the CY 2015 PFS final rule, we required group practices of 100
or more EPs that register to participate in the GPRO for 2015 reporting
to select a CMS-certified survey vendor to report the CAHPS for PQRS
survey, regardless of the reporting mechanism the group practice
chooses (79 FR 67794). We also stated that group practices would bear
the cost of administering the CAHPS for PQRS survey. To collect CAHPS
for PQRS data from smaller groups, for purposes of the 2018 PQRS
payment adjustment (which would be based on data reported during the
12-month period that falls in CY 2016), we propose to require group
practices of 25 or more EPs that register to participate in the GPRO
and select the GPRO web interface as the reporting mechanism to select
a CMS-certified survey vendor to report CAHPS for PQRS. We believe this
proposal is consistent with our effort to collect CAHPS for PQRS data
whenever possible. However, we are excluding from this proposal group
practices that report measures using the qualified registry, EHR, and
QCDR reporting mechanisms, because we have discovered that certain
group practices reporting through these mechanisms may be highly
specialized or otherwise unable to report CAHPS for PQRS. Please note
that we are still proposing to keep CAHPS for PQRS reporting as an
option for all group practices. We note that all group practices that
would be required to report or voluntarily elect to report CAHPS for
PQRS would need to continue to select and pay for a CMS-certified
survey vendor to administer the CAHPS for PQRS survey on their behalf.
We invite public comment on this proposal.
We understand that this proposed requirement may cause concern for
smaller group practices who choose to participate in the PQRS via the
GPRO web interface, particularly those who have not yet administered
the CAHPS for PQRS survey (as we introduced reporting of the CAHPS for
PQRS survey in 2014) or those group practices who do not believe the
CAHPS for PQRS survey applies to their practice. Since the introduction
of the CAHPS for PQRS survey, we have received questions as on when the
CAHPS for PQRS survey applies to a group practice. In this section
below, we seek to clarify questions we have received regarding the
administration of the CAHPS for PQRS survey. We note that this proposed
requirement would only apply to group practices of 25 or more EPs for
whom CAHPS for PQRS applies.
In addition, we note that we finalized a 12-month reporting period
for the administration of the CAHPS for PQRS survey. However, as group
practice s have until June of the applicable reporting period (that is,
June 30, 2016 for the 12-month reporting period occurring January 1,
2016-December 31, 2016) to elect to participate in the PQRS as a GPRO
and administer CAHPS for PQRS, it is not technically feasible for us to
collect data for purposes of CAHPS for PQRS until the close of the GPRO

[[Page 41822]]

registration period. As such, the administration of the CAHPS for PQRS
survey only contains 6-months of data. We do not believe this
significantly alters the administration of CAHPS for PQRS, as we
believe that 6-months of data provides an adequate sample of the 12-
month reporting period.
The CAHPS for PQRS survey consists of the core CAHPS Clinician &
Group Survey developed by AHRQ, plus additional survey questions to
meet CMS' information and program needs. The survey questions are
aggregated into 12 content domains called Summary Survey Measures
(SSMs). SSMs contain one or more survey questions. The CAHPS for PQRS
survey consists of the following survey measures: (1) Getting timely
care, appointments, & information; (2) How well your providers
communicate; (3) Patient's rating of provider; (4) Access to
specialists; (5) Health promotion and education; (6) Shared decision
making; (7) Health status & functional status; (8) Courteous & helpful
office staff; (9) Care coordination; (10) Between visit communication;
(11) Helping you take medications as directed; and (12) Stewardship of
patient resources. For the CAHPS for PQRS survey to apply to a group
practice, the group practice must have an applicable focal provider as
well as meet the minimum beneficiary sample for the CAHPS for PQRS
survey.
Identifying Focal Providers: Which provider does the survey ask
about? The provider named in the survey provided the beneficiary with
the plurality of the beneficiary's primary care services delivered by
the group practice. Plurality of care is based on the number of primary
care service visits to a provider. The provider named in the survey can
be a physician (primary care provider or specialist), nurse
practitioner (NP), physician's assistant (PA), or clinical nurse
specialist (CNS).
Exclusion Criteria for Focal Providers: Several specialty types are
excluded from selection as focal provider such as anesthesiology,
pathology, psychiatry optometry, diagnostic radiology, chiropractic,
podiatry, audiology, physical therapy, occupational therapy, clinical
psychology, diet/nutrition, emergency medicine, addiction medicine,
critical care, and clinical social work. Hospitalists are also excluded
from selection as a focal provider.
Beneficiary Sample Selection: CMS retrospectively assigns Medicare
beneficiaries to your group practice based on whether the group
provided a wide range of primary care services. Assigned beneficiaries
must have a plurality of their primary care claims delivered by the
group practice. Assigned beneficiaries have at least one month of both
Part A and Part B enrollment and no months of Part A only enrollment or
Part B only enrollment. Assigned beneficiaries cannot have any months
of enrollment in a Medicare Advantage plan. Regardless of the number of
EPs, some group practices may not have a sufficient number of assigned
beneficiaries to participate in the CAHPS for PQRS survey.
We draw a sample of Medicare beneficiaries assigned to a practice.
For practices with 100 or more eligible providers, the desired sample
is 860, and the minimum sample is 416. For practices with 25 to 99
eligible providers, the desired sample is 860, and the minimum sample
is 255. For practices with 2 to 24 eligible providers, the desired
sample is 860, and the minimum sample is 125. The following
beneficiaries are excluded in the practice's patient sample:
Beneficiaries under age 18 at the time of the sample draw;
beneficiaries known to be institutionalized at the time of the sample
draw; and beneficiaries with no eligible focal provider. For more
information on CAHPS for PQRS, please visit the PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/CMS-Certified-Survey-Vendor.html.
b. Proposed Criteria for Satisfactory Reporting on PQRS Quality
Measures via the GPRO Web Interface for the 2018 PQRS Payment
Adjustment
Under our authority specified for the group practice reporting
requirements under section 1848(m)(3)(C) of the Act--to be consistent
with the criterion we finalized for the satisfactory reporting of PQRS
quality measures for group practices registered to participate in the
GPRO for the 2017 PQRS payment adjustment using the GPRO web interface
(see Table 51 at 79 FR 67797)--we propose to amend Sec. 414.90(j) to
specify criteria for the satisfactory reporting of PQRS quality
measures for group practices registered to participate in the GPRO for
the 12-month reporting period for the 2018 PQRS payment adjustment
using the GPRO web interface for groups practices of 25 or more EPs for
which the CAHPS for PQRS survey does not apply. Specifically, the group
practice would report on all measures included in the web interface;
AND populate data fields for the first 248 consecutively ranked and
assigned beneficiaries in the order in which they appear in the group's
sample for each module or preventive care measure. If the pool of
eligible assigned beneficiaries is less than 248, then the group
practice would report on 100 percent of assigned beneficiaries. In
other words, we understand that, in some instances, the sampling
methodology CMS provides will not be able to assign at least 248
patients on which a group practice may report, particularly those group
practices on the smaller end of the range of 25-99 EPs. If the group
practice is assigned less than 248 Medicare beneficiaries, then the
group practice would report on 100 percent of its assigned
beneficiaries. A group practice would be required to report on at least
1 measure in the GPRO web interface. Although the criteria proposed
above are specified for groups practices of 25 or more EPs, please note
that, given our proposal below to require that group practices of 25 or
more EPs report the CAHPS for PQRS survey, the criteria proposed above
would apply to a group practices of 25 or more EPs only if the CAHPS
for PQRS survey does not apply to the group practice.
Furthermore, similar to the criteria we established for the 2017
PQRS payment adjustment (see Table 51 at 79 FR 67797), as we specified
in section III.K.4.a., we propose to require that group practices of 25
or more EPs who elect to report quality measures via the GPRO web
interface report the CAHPS for PQRS survey, if applicable. Therefore,
similar to the criteria we established for the 2017 PQRS payment
adjustment in accordance with section 1848(m)(3)(C) of the Act (see
Table 51 at 79 FR 67797), we propose to amend Sec. 414.90(j) to
specify criteria for the satisfactory reporting of PQRS quality
measures for group practices of 25 or more EPs that registered to
participate in the GPRO for the 12-month reporting period for the 2018
PQRS payment adjustment using the GPRO web interface and for which the
CAHPS for PQRS survey applies. Specifically, if a group practice
chooses to use the GPRO web interface in conjunction with reporting the
CAHPS for PQRS survey measures, we propose to specify the criterion for
satisfactory reporting for the 2018 PQRS payment adjustment. For the
12-month reporting period for the 2018 PQRS payment adjustment, the
group practice would report all CAHPS for PQRS survey measures via a
certified survey vendor. In addition, the group practice would report
on all measures included in the GPRO web interface; AND populate data
fields for the first 248 consecutively ranked and assigned
beneficiaries in the order in which they appear in the group's sample
for each

[[Page 41823]]

module or preventive care measure. If the pool of eligible assigned
beneficiaries is less than 248, then the group practice would report on
100 percent of assigned beneficiaries. A group practice would be
required to report on at least 1 measure for which there is Medicare
patient data.
For assignment of patients for group practices reporting via the
GPRO web interface, in previous years, we have aligned with the
Medicare Shared Savings Program methodology of beneficiary assignment
(see 77 FR 69195). However, for the 2017 PQRS payment adjustment, we
used a beneficiary attribution methodology utilized within the VM for
the claims-based quality measures and cost measures that is slightly
different from the Medicare Shared Savings Program assignment
methodology that applied in 2015, namely (1) eliminating the primary
care service pre-step that is statutorily required for the Shared
Savings Program and (2) including NPs, PAs, and CNSs in step 1 rather
than in step 2 of the attribution process. We believe that aligning
with the VM's method of attribution is appropriate, as the VM is
directly tied to participation in the PQRS (79 FR 67790). Therefore, to
be consistent with the sampling methodology we used for the 2017 PQRS
payment adjustment, we propose to continue using the attribution
methodology used for the VM for the GPRO web interface beneficiary
assignment methodology for the 2018 PQRS payment adjustment and future
years.
As we clarified in the CY 2015 PFS final rule with comment period
(79 FR 67790), if a group practice has no Medicare patients for which
any of the GPRO measures are applicable, the group practice will not
meet the criteria for satisfactory reporting using the GPRO web
interface. Therefore, to meet the criteria for satisfactory reporting
using the GPRO web interface, a group practice must be assigned and
have sampled at least 1 Medicare patient for any of the applicable GPRO
web interface measures. If a group practice does not typically see
Medicare patients for which the GPRO web interface measures are
applicable, or if the group practice does not have adequate billing
history for Medicare patients to be used for assignment and sampling of
Medicare patients into the GPRO web interface, we advise the group
practice to participate in the PQRS via another reporting mechanism.
We invite public comment on these proposals.
c. Proposed Criteria for Satisfactory Reporting on Individual PQRS
Quality Measures for Group Practices Registered To Participate in the
GPRO via Registry for the 2018 PQRS Payment Adjustment
We finalized the following satisfactory reporting criteria for the
submission of individual quality measures via registry for group
practices of 2-99 EPs in the GPRO for the 2017 PQRS payment adjustment
(see Table 51 at 79 FR 67797): Report at least 9 measures, covering at
least 3 of the NQS domains, OR, if less than 9 measures covering at
least 3 NQS domains apply to the group practice, report up to 8
measures covering 1-3 NQS domains for which there is Medicare patient
data, AND report each measure for at least 50 percent of the group
practice's Medicare Part B FFS patients seen during the reporting
period to which the measure applies.
Consistent with the group practice reporting criteria we finalized
for the 2017 PQRS payment adjustment in accordance with section
1848(m)(3)(C) of the Act, for those group practices that choose to
report using a qualified registry, we propose to amend Sec. 414.90(j)
to specify satisfactory reporting criteria via qualified registry for
group practices of 2+ EPs who select to participate in the GPRO for the
2018 PQRS payment adjustment. Specifically, for the 12-month 2018 PQRS
payment adjustment reporting period, the group practice would report at
least 9 measures, covering at least 3 of the NQS domains. Of these
measures, if a group practice has an EP that sees at least 1 Medicare
patient in a face-to-face encounter, the group practice would report on
at least 1 measure in the PQRS cross-cutting measure set. If the group
practice reports on less than 9 measures covering at least 3 NQS
domains, the group practice would report on each measure that is
applicable to the group practice, AND report each measure for at least
50 percent of the EP's Medicare Part B FFS patients seen during the
reporting period to which the measure applies. Measures with a 0
percent performance rate would not be counted.
In addition, if a group practice of 2+ EPs chooses instead to use a
qualified registry in conjunction with reporting the CAHPS for PQRS
survey measures, for the 12-month reporting period for the 2018 PQRS
payment adjustment, the group practice would report all CAHPS for PQRS
survey measures via a certified survey vendor, and report at least 6
additional measures, outside of the CAHPS for PQRS survey, covering at
least 2 of the NQS domains using the qualified registry. If less than 6
measures apply to the group practice, the group practice must report on
each measure that is applicable to the group practice. Of the non-CAHPS
for PQRS measures, if any EP in the group practice sees at least 1
Medicare patient in a face-to-face encounter, the group practice would
be required to report on at least 1 measure in the PQRS cross-cutting
measure set. We note that this proposed option to report 6 additional
measures, including at least 1 cross-cutting measure if a group
practice sees at least 1 Medicare patient in a face-to-face encounter,
is consistent with the proposed criterion for satisfactory reporting
for the 2018 PQRS payment adjustment via qualified registry.
As with individual reporting, we understand that there may be
instances where a group practice may not have at least 9 measures
applicable to a group practice's practice. In this instance, like the
criterion we finalized for the 2017 PQRS payment adjustment (see Table
51 at 79 FR 67797), a group practice reporting on less than 9 measures
would still be able to meet the satisfactory reporting criterion via
registry if the group practice reports on each measure that is
applicable to the group practice's practice. If a group practice
reports on less than 9 measures, the group practice would be subject to
the MAV process, which would allow us to determine whether a group
practice should have reported quality data codes for additional
measures and/or measures covering additional NQS domains. In addition,
if a group practice does not report on at least 1 cross-cutting measure
and the group practice has at least 1 EP who sees at least 1 Medicare
patient in a face-to-face encounter, the MAV will also allow us to
determine whether a group practice should have reported on any of the
PQRS cross-cutting measures. The MAV process we are proposing to
implement for registry reporting is a similar process that was
established for reporting periods occurring in 2015 for the 2017 PQRS
payment adjustment. However, please note that the MAV process for the
2018 PQRS payment adjustment will now allow us to determine whether a
group practice should have reported on at least 1 cross-cutting
measure. For more information on the registry MAV process, please visit
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_PQRS_Registry_MeasureApplicabilityValidation_12132013.zip.
We invite public comment on these proposals.

[[Page 41824]]

d. Proposed Criteria for Satisfactory Reporting on Individual PQRS
Quality Measures for Group Practices Registered To Participate in the
GPRO via EHR for the 2018 PQRS Payment Adjustment
For EHR reporting, consistent with the criterion finalized for the
2017 PQRS payment adjustment (see Table 51 at 79 FR 67797) that aligns
with the criteria established for meeting the CQM component of
meaningful use under the Medicare EHR Incentive Program and in
accordance with the group practice reporting requirements under section
1848(m)(3)(C) of the Act, for those group practices that choose to
report using an EHR, we propose to amend Sec. 414.90(j) to specify
satisfactory reporting criteria via a direct EHR product or an EHR data
submission vendor product for group practices of 2+ EPs who select to
participate in the GPRO for the 2018 PQRS payment adjustment.
Specifically, for the 12-month reporting period for the 2018 PQRS
payment adjustment, the group practice would report 9 measures covering
at least 3 domains. If the group practice's direct EHR product or EHR
data submission vendor product does not contain patient data for at
least 9 measures covering at least 3 domains, then the group practice
must report all of the measures for which there is Medicare patient
data. A group practice must report on at least 1 measure for which
there is Medicare patient data.
In addition, if a group practice of 2+ EPs chooses instead to use a
direct EHR product or EHR data submission vendor in conjunction with
reporting the CAHPS for PQRS survey measures, for the 12-month
reporting period for the 2018 PQRS payment adjustment, the group
practice would report all CAHPS for PQRS survey measures via a
certified survey vendor, and report at least 6 additional measures,
outside of the CAHPS for PQRS survey, covering at least 2 of the NQS
domains using the direct EHR product or EHR data submission vendor
product. If less than 6 measures apply to the group practice, the group
practice must report all applicable measures. Of the non-CAHPS for PQRS
measures that must be reported in conjunction with reporting the CAHPS
for PQRS survey measures, a group practice would be required to report
on at least 1 measure for which there is Medicare patient data. We note
that this proposed option to report 6 additional measures is consistent
with the proposed criterion for satisfactory reporting for the 2018
PQRS payment adjustment via EHR without CAHPS for PQRS, since both
criteria assess a total of 3 domains.
We invite public comment on these proposals.
e. Satisfactory Participation in a QCDR for Group Practices Registered
To Participate in the GPRO via a QCDR for the 2018 PQRS Payment
Adjustment
Section 101(d)(1)(B) of the MACRA amends section 1848(m)(3)(D) of
the Act by inserting ``and, for 2016 and subsequent years, subparagraph
(A) or (C)'' after ``subparagraph (A)''. This change authorizes CMS to
create an option for EPs participating in the GPRO to report quality
measures via a QCDR.
As such, please note that we are modifying Sec. 414.90(k) to
indicate that group practices may also use a QCDR to participate in the
PQRS.
f. Proposed Reporting Period for the Satisfactory Participation by
Individual EPs in a QCDR for the 2018 PQRS Payment Adjustment
Section 1848(m)(3)(D) of the Act, as redesignated and added by
section 601(b) of the America Taxpayer Relief Act of 2012 and further
amended by MACRA, authorizes the Secretary to treat a group practice as
satisfactorily submitting data on quality measures under section
1848(m)(3)(A) of the Act if the group practice is satisfactorily
participating in a QCDR for the year. Given that satisfactory
participation is with regard to the year, and to provide consistency
with the reporting period applicable to individual EPs who participate
in the PQRS via a QCDR, we propose to revise Sec. 414.90(k) to specify
a 12-month, CY reporting period from January 1, 2016 through December
31, 2016 for group practices participating in the GPRO to
satisfactorily participate in a QCDR for purposes of the 2018 PQRS
payment adjustment. We are proposing a 12-month reporting period. Based
on our experience with the 12 and 6-month reporting periods for the
PQRS incentives, we believe that data on quality measures collected
based on 12-months provides a more accurate assessment of actions
performed in a clinical setting than data collected based on shorter
reporting periods. In addition, we believe a 12-month reporting period
is appropriate given that the full calendar year would be utilized with
regard to the participation by the group practice in the QCDR. We
invite public comment on the proposed 12-month, CY 2016 reporting
period for the satisfactory participation of group practices in a QCDR
for the 2018 PQRS payment adjustment.
g. Proposed Criteria for Satisfactory Participation in a QCDR for Group
Practices Registered To Participate in the GPRO via a QCDR for the 2018
PQRS Payment Adjustment
To be consistent with individual reporting criteria that we
finalized for the 2017 PQRS payment adjustment (see Table 50 at 79 FR
67796) as well as our proposed individual reporting criteria for the
2018 PQRS payment adjustment, for purposes of the 2018 PQRS payment
adjustment (which would be based on data reported during the 12-month
period that falls in CY 2016), we propose to amend Sec. 414.90(j) to
use the same criterion for group practices as individual EPs to
satisfactorily participate in a QCDR for the 2018 PQRS payment
adjustment. Specifically, for the 12-month reporting period for the
2018 PQRS payment adjustment, the group practice would report at least
9 measures available for reporting under a QCDR covering at least 3 of
the NQS domains, AND report each measure for at least 50 percent of the
group practice's patients. Of these measures, the group practice would
report on at least 2 outcome measures, OR, if 2 outcomes measures are
not available, report on at least 1 outcome measures and at least 1 of
the following types of measures--resource use, patient experience of
care, efficiency/appropriate use, or patient safety.
Tables 20 and 21 reflect our proposed criteria for satisfactory
reporting--or, in lieu of satisfactory reporting, satisfactory
participation in a QCDR--for the 2018 PQRS payment adjustment:

[[Page 41825]]

Table 20--Summary of Proposed Requirements for the 2018 PQRS Payment Adjustment: Individual Reporting Criteria
for the Satisfactory Reporting of Quality Measures Data via Claims, Qualified Registry, and EHRS and
Satisfactory Participation Criterion in QCDRS
----------------------------------------------------------------------------------------------------------------
Reporting Satisfactory reporting/satisfactory
Reporting period Measure type mechanism participation criteria
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31, 2016). Individual Claims........... Report at least 9 measures, covering at
Measures. least 3 of the NQS domains AND report
each measure for at least 50 percent of
the EP's Medicare Part B FFS patients
seen during the reporting period to which
the measure applies. Of the measures
reported, if the EP sees at least 1
Medicare patient in a face-to-face
encounter, the EP will report on at least
1 measure contained in the PQRS cross-
cutting measure set. If less than 9
measures apply to the EP, the EP would
report on each measure that is
applicable), AND report each measure for
at least 50 percent of the Medicare Part
B FFS patients seen during the reporting
period to which the measure applies.
Measures with a 0 percent performance
rate would not be counted.
12-month (Jan 1-Dec 31, 2016). Individual Qualified Report at least 9 measures, covering at
Measures. Registry. least 3 of the NQS domains AND report
each measure for at least 50 percent of
the EP's Medicare Part B FFS patients
seen during the reporting period to which
the measure applies. Of the measures
reported, if the EP sees at least 1
Medicare patient in a face-to-face
encounter, the EP will report on at least
1 measure contained in the PQRS cross-
cutting measure set. If less than 9
measures apply to the EP, the EP would
report on each measure that is
applicable, AND report each measure for
at least 50 percent of the Medicare Part
B FFS patients seen during the reporting
period to which the measure applies.
Measures with a 0 percent performance
rate would not be counted.
12-month (Jan 1-Dec 31, 2016). Individual Direct EHR Report 9 measures covering at least 3 of
Measures. Product or EHR the NQS domains. If an EP's direct EHR
Data Submission product or EHR data submission vendor
Vendor Product. product does not contain patient data for
at least 9 measures covering at least 3
domains, then the EP would be required to
report all of the measures for which
there is Medicare patient data. An EP
would be required to report on at least 1
measure for which there is Medicare
patient data.
12-month (Jan 1-Dec 31, 2016). Measures Groups.. Qualified Report at least 1 measures group AND
Registry. report each measures group for at least
20 patients, the majority (11 patients)
of which are required to be Medicare Part
B FFS patients. Measures groups
containing a measure with a 0 percent
performance rate will not be counted.
12-month (Jan 1-Dec 31, 2016). Individual PQRS Qualified Report at least 9 measures available for
measures and/or Clinical Data reporting under a QCDR covering at least
non-PQRS Registry (QCDR). 3 of the NQS domains, AND report each
measures measure for at least 50 percent of the
reportable via a EP's patients. Of these measures, the EP
QCDR. would report on at least 2 outcome
measures, OR, if 2 outcomes measures are
not available, report on at least 1
outcome measures and at least 1 of the
following types of measures--resource
use, patient experience of care,
efficiency/appropriate use, or patient
safety.
----------------------------------------------------------------------------------------------------------------

Table 21--Summary of Proposed Requirements for the 2018 PQRS Payment Adjustment: Group Practice Reporting
Criteria for Satisfactory Reporting of Quality Measures Data via the GPRO
----------------------------------------------------------------------------------------------------------------
Group practice Reporting Satisfactory reporting
Reporting period size Measure type mechanism criteria
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31, 2016) 25+ EPs (if Individual GPRO GPRO Web Report on all measures
CAHPS for PQRS Measures in Interface. included in the web
does not the GPRO Web interface; AND populate data
apply). Interface. fields for the first 248
consecutively ranked and
assigned beneficiaries in the
order in which they appear in
the group's sample for each
module or preventive care
measure. If the pool of
eligible assigned
beneficiaries is less than
248, then the group practice
must report on 100 percent of
assigned beneficiaries. In
other words, we understand
that, in some instances, the
sampling methodology we
provide will not be able to
assign at least 248 patients
on which a group practice may
report, particularly those
group practices on the
smaller end of the range of
25-99 EPs. If the group
practice is assigned less
than 248 Medicare
beneficiaries, then the group
practice must report on 100
percent of its assigned
beneficiaries. A group
practice must report on at
least 1 measure for which
there is Medicare patient
data.

[[Page 41826]]

12-month (Jan 1-Dec 31, 2016) 25+ EPs (if Individual GPRO GPRO Web The group practice must have
CAHPS for PQRS Measures in Interface + all CAHPS for PQRS survey
applies). the GPRO Web CMS-Certified measures reported on its
Interface + Survey Vendor. behalf via a CMS-certified
CAHPS for PQRS. survey vendor. In addition,
the group practice must
report on all measures
included in the GPRO web
interface; AND populate data
fields for the first 248
consecutively ranked and
assigned beneficiaries in the
order in which they appear in
the group's sample for each
module or preventive care
measure. If the pool of
eligible assigned
beneficiaries is less than
248, then the group practice
must report on 100 percent of
assigned beneficiaries. A
group practice will be
required to report on at
least 1 measure for which
there is Medicare patient
data.
Please note that, if the CAHPS
for PQRS survey is applicable
to a group practice who
reports quality measures via
the GPRO web interface, the
group practice must
administer the CAHPS for PQRS
survey in addition to
reporting the GPRO web
interface measures.
12-month (Jan 1-Dec 31, 2016) 2+ EPs......... Individual Qualified Report at least 9 measures,
Measures. Registry. covering at least 3 of the
NQS domains. Of these
measures, if a group practice
sees at least 1 Medicare
patient in a face-to-face
encounter, the group practice
would report on at least 1
measure in the PQRS cross-
cutting measure set. If less
than 9 measures covering at
least 3 NQS domains apply to
the group practice, the group
practice would report on each
measure that is applicable to
the group practice, AND
report each measure for at
least 50 percent of the
group's Medicare Part B FFS
patients seen during the
reporting period to which the
measure applies. Measures
with a 0 percent performance
rate would not be counted.
12-month (Jan 1-Dec 31, 2016) 2+ EPs that Individual Qualified The group practice must have
elect CAHPS Measures + Registry + CMS- all CAHPS for PQRS survey
for PQRS. CAHPS for PQRS. Certified measures reported on its
Survey Vendor. behalf via a CMS-certified
survey vendor, and report at
least 6 additional measures,
outside of the CAHPS for PQRS
survey, covering at least 2
of the NQS domains using the
qualified registry. If less
than 6 measures apply to the
group practice, the group
practice must report on each
measure that is applicable to
the group practice. Of the
additional measures that must
be reported in conjunction
with reporting the CAHPS for
PQRS survey measures, if any
EP in the group practice sees
at least 1 Medicare patient
in a face-to-face encounter,
the group practice must
report on at least 1 measure
in the PQRS cross-cutting
measure set.
12-month (Jan 1-Dec 31, 2016) 2+ EPs......... Individual Direct EHR Report 9 measures covering at
Measures. Product or EHR least 3 domains. If the group
Data practice's direct EHR product
Submission or EHR data submission vendor
Vendor Product. product does not contain
patient data for at least 9
measures covering at least 3
domains, then the group
practice must report all of
the measures for which there
is Medicare patient data. A
group practice must report on
at least 1 measure for which
there is Medicare patient
data.
12-month (Jan 1-Dec 31, 2016) 2+ EPs that Individual Direct EHR The group practice must have
elect CAHPS Measures + Product or EHR all CAHPS for PQRS survey
for PQRS. CAHPS for PQRS. Data measures reported on its
Submission behalf via a CMS-certified
Vendor Product survey vendor, and report at
+ CMS- least 6 additional measures,
Certified outside of CAHPS for PQRS,
Survey Vendor. covering at least 2 of the
NQS domains using the direct
EHR product or EHR data
submission vendor product. If
less than 6 measures apply to
the group practice, the group
practice must report all of
the measures for which there
is Medicare patient data. Of
the additional 6 measures
that must be reported in
conjunction with reporting
the CAHPS for PQRS survey
measures, a group practice
would be required to report
on at least 1 measure for
which there is Medicare
patient data.

[[Page 41827]]

12-month (Jan 1-Dec 31, 2016) 2+ EPs......... Individual PQRS Qualified Report at least 9 measures
measures and/ Clinical Data available for reporting under
or non-PQRS Registry a QCDR covering at least 3 of
measures (QCDR). the NQS domains, AND report
reportable via each measure for at least 50
a QCDR. percent of the group
practice's patients. Of these
measures, the group practice
would report on at least 2
outcome measures, OR, if 2
outcomes measures are not
available, report on at least
1 outcome measures and at
least 1 of the following
types of measures--resource
use, patient experience of
care, efficiency/appropriate
use, or patient safety.
----------------------------------------------------------------------------------------------------------------

6. Statutory Requirements and Other Considerations for the Selection of
PQRS Quality Measures for Meeting the Criteria for Satisfactory
Reporting for 2016 and Beyond for Individual EPs and Group Practices
Annually, we solicit or ``Call for Measures'' from the public for
possible inclusion in the PQRS. During the Call for Measures, we
request measures for inclusion in PQRS that meet the following
statutory and other criteria.
Sections 1848(k)(2)(C) and 1848(m)(3)(C)(i) of the Act,
respectively, govern the quality measures reported by individual EPs
and group practices under the PQRS. Under section 1848(k)(2)(C)(i) of
the Act, the PQRS quality measures shall be such measures selected by
the Secretary from measures that have been endorsed by the entity with
a contract with the Secretary under section 1890(a) of the Act, which
is currently the National Quality Forum (NQF). However, in the case of
a specified area or medical topic determined appropriate by the
Secretary for which a feasible and practical measure has not been
endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act authorizes
the Secretary to specify a measure that is not so endorsed as long as
due consideration is given to measures that have been endorsed or
adopted by a consensus organization identified by the Secretary. In
light of these statutory requirements, we believe that, except in the
circumstances specified in the statute, each PQRS quality measure must
be endorsed by the NQF. Additionally, section 1848(k)(2)(D) of the Act
requires that for each PQRS quality measure, the Secretary shall ensure
that EPs have the opportunity to provide input during the development,
endorsement, or selection of measures applicable to services they
furnish. The statutory requirements under section 1848(k)(2)(C) of the
Act, subject to the exception noted previously, require only that the
measures be selected from measures that have been endorsed by the
entity with a contract with the Secretary under section 1890(a) of the
Act (that is, the NQF) and are silent as to how the measures that are
submitted to the NQF for endorsement are developed.
The steps for developing measures applicable to physicians and
other EPs prior to submission of the measures for endorsement may be
carried out by a variety of different organizations. We do not believe
there needs to be special restrictions on the type or make-up of the
organizations carrying out this process of development of physician
measures, such as restricting the initial development to physician-
controlled organizations. Any such restriction would unduly limit the
development of quality measures and the scope and utility of measures
that may be considered for endorsement as voluntary consensus standards
for purposes of the PQRS.
In addition to section 1848(k)(2)(C) of the Act, section 1890A of
the Act, which was added by section 3014(b) of the Affordable Care Act,
requires that the Secretary establish a pre-rulemaking process under
which certain steps occur for the selection of certain categories of
quality and efficiency measures, one of which is that the entity with a
contract with the Secretary under section 1890(a) of the Act (that is,
the NQF) convene multi-stakeholder groups to provide input to the
Secretary on the selection of such measures. These categories are
described in section 1890(b)(7)(B) of the Act, and include such
measures as the quality measures selected for reporting under the PQRS.
In accordance with section 1890A(a)(1) of the Act, the NQF convened
multi-stakeholder groups by creating the MAP. Section 1890A(a)(2) of
the Act requires that the Secretary must make publicly available by
December 1st of each year a list of the quality and efficiency measures
that the Secretary is considering for selection through rulemaking for
use in the Medicare program. The NQF must provide CMS with the MAP's
input on the selection of measures by February 1st of each year. The
lists of measures under consideration for selection through rulemaking
in 2015 are available at http://www.qualityforum.org/map/.
As we noted above, section 1848(k)(2)(C)(ii) of the Act provides an
exception to the requirement that the Secretary select measures that
have been endorsed by the entity with a contract under section 1890(a)
of the Act (that is, the NQF). We may select measures under this
exception if there is a specified area or medical topic for which a
feasible and practical measure has not been endorsed by the entity, as
long as due consideration is given to measures that have been endorsed
or adopted by a consensus organization identified by the Secretary.
Under this exception, aside from NQF endorsement, we requested that
stakeholders apply the following considerations when submitting
measures for possible inclusion in the PQRS measure set:
Measures that are not duplicative of another existing or
proposed measure.
Measures that are further along in development than a
measure concept.
We are not accepting claims-based-only reporting measures
in this process.
Measures that are outcome-based rather than clinical
process measures.
Measures that address patient safety and adverse events.
Measures that identify appropriate use of diagnosis and
therapeutics.
Measures that include the NQS domain for care coordination
and communication.
Measures that include the NQS domain for patient
experience and patient-reported outcomes.
Measures that address efficiency, cost and resource use.

[[Page 41828]]

a. Proposed PQRS Quality Measures
Taking into consideration the statutory and non-statutory criteria
we described previously, this section contains our proposals for the
inclusion or removal of measures in PQRS for 2016 and beyond. We are
classifying all proposed measures against six domains based on the
NQS's six priorities, as follows:
(1) Patient Safety. These are measures that reflect the safe
delivery of clinical services in all healthcare settings. These
measures may address a structure or process that is designed to reduce
risk in the delivery of healthcare or measure the occurrence of an
untoward outcome such as adverse events and complications of procedures
or other interventions.
(2) Person and Caregiver-Centered Experience and Outcomes. These
are measures that reflect the potential to improve patient-centered
care and the quality of care delivered to patients. They emphasize the
importance of collecting patient-reported data and the ability to
impact care at the individual patient level, as well as the population
level. These are measures of organizational structures or processes
that foster both the inclusion of persons and family members as active
members of the health care team and collaborative partnerships with
providers and provider organizations or can be measures of patient-
reported experiences and outcomes that reflect greater involvement of
patients and families in decision making, self-care, activation, and
understanding of their health condition and its effective management.
(3) Communication and Care Coordination. These are measures that
demonstrate appropriate and timely sharing of information and
coordination of clinical and preventive services among health
professionals in the care team and with patients, caregivers, and
families to improve appropriate and timely patient and care team
communication. They may also be measures that reflect outcomes of
successful coordination of care.
(4) Effective Clinical Care. These are measures that reflect
clinical care processes closely linked to outcomes based on evidence
and practice guidelines or measures of patient-centered outcomes of
disease states.
(5) Community/Population Health. These are measures that reflect
the use of clinical and preventive services and achieve improvements in
the health of the population served. They may be measures of processes
focused on primary prevention of disease or general screening for early
detection of disease unrelated to a current or prior condition.
(6) Efficiency and Cost Reduction. These are measures that reflect
efforts to lower costs and to significantly improve outcomes and reduce
errors. These are measures of cost, resource use and appropriate use of
healthcare resources or inefficiencies in healthcare delivery.
Please note that the PQRS quality measure specifications for any
given proposed PQRS individual quality measure may differ from
specifications for the same quality measure used in prior years. For
example, for the proposed PQRS quality measures that were selected for
reporting in 2016 and beyond, please note that detailed measure
specifications, including the measure's title, for the proposed
individual PQRS quality measures for 2016 and beyond may have been
updated or modified during the NQF endorsement process or for other
reasons.
In addition, due to our desire to align measure titles with the
measure titles that have been finalized for 2013, 2014, 2015 reporting,
and potentially subsequent years of the Medicare EHR Incentive Program,
we note that the measure titles for measures available for reporting
via EHR-based reporting mechanisms may change. To the extent that the
Medicare EHR Incentive Program updates its measure titles to include
version numbers (see 77 FR 13744), we will use these version numbers to
describe the PQRS EHR measures that will also be available for
reporting for the EHR Incentive Program. We will continue to work
toward complete alignment of measure specifications across programs
whenever possible.
Through NQF's measure maintenance process, NQF-endorsed measures
are sometimes updated to incorporate changes that we believe do not
substantively change the nature of the measure. Examples of such
changes may include updated diagnosis or procedure codes or changes to
exclusions to the patient population or definitions. While we address
such changes on a case-by-case basis, we generally believe these types
of maintenance changes are distinct from substantive changes to
measures that result in what are considered new or different measures.
Further, we believe that non-substantive maintenance changes of this
type do not trigger the same agency obligations under the
Administrative Procedure Act.
In the CY 2013 PFS final rule with comment period, we finalized our
proposal providing that if the NQF updates an endorsed measure that we
have adopted for the PQRS in a manner that we consider to not
substantively change the nature of the measure, we would use a
subregulatory process to incorporate those updates to the measure
specifications that apply to the program (77 FR 69207). We believe this
adequately balances our need to incorporate non-substantive NQF updates
to NQF-endorsed measures in the most expeditious manner possible, while
preserving the public's ability to comment on updates that change an
endorsed measure such that it is no longer the same measure that we
originally adopted. We also note that the NQF process incorporates an
opportunity for public comment and engagement in the measure
maintenance process. We will revise the Specifications Manual and post
notices to clearly identify the updates and provide links to where
additional information on the updates can be found. Updates will also
be available on the CMS PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
We are not the measure steward for most of the measures available
for reporting under the PQRS. We rely on outside measure stewards and
developers to maintain these measures. In Table 25, we are proposing
that certain measures be removed from the PQRS measure set due to the
measure steward indicating that it will not be able to maintain the
measure. We note that this proposal is contingent upon the measure
steward not being able to maintain the measure. Should we learn that a
certain measure steward is able to maintain the measure, or that
another entity is able to maintain the measure in a manner that allows
the measure to be available for reporting under the PQRS for the CY
2018 PQRS payment adjustment, we propose to keep the measure available
for reporting under the PQRS and therefore not finalize our proposal to
remove the measure. In addition, if, after the display of this proposed
rule and before the display of the CY 2016 PFS final rule, we discover
additional measures within the current PQRS measure set that a measure
steward can no longer maintain, we propose to remove these measures
from reporting for the PQRS beginning in 2016. We will discuss any such
instances in the CY 2016 PFS final rule with comment period.
In addition, we note that we have received feedback from
stakeholders, particularly first-time participants who find it
difficult to understand which measures are applicable to their

[[Page 41829]]

particular practice. In an effort to aide EPs and group practices to
determine what measures best fit their practice, and in collaboration
with specialty societies, we are beginning to group our final measures
available for reporting according to specialty. The current listing of
our measures by specialty can be found on our Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html. Please note that these groups of measures
are meant to provide guidance to those EPs seeking to determine what
measures to report. EPs are not required to report measures according
to these suggested groups of measures. As measures are adopted or
revised, we will continue to update these groups to reflect the
measures available under the PQRS, as well as add more specialties.
In Tables 22 through 30, we propose changes to the PQRS measures
set. The current PQRS measures list is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/PQRS_2015_Measure-List_111014.zip.
b. Proposed Cross-Cutting Measures for 2016 Reporting and Beyond
In the CY 2015 PFS final rule with comment period, we finalized a
set of 19 cross-cutting measures for reporting in the PQRS for 2015 and
beyond (see Table 52 at 79 FR 67801). The current PQRS cross-cutting
measure set is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2015_PQRS_CrosscuttingMeasures_12172014.pdf. In Table 22, we propose
the following measures to be added to the current PQRS cross-cutting
measure set. Please note that our rationale for proposing each of these
measures is found below the measure description.

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c. Proposed New PQRS Measures Available for Reporting for 2016 and
Beyond and Proposed Changes to Existing PQRS Measures
Table 23 contains additional measures we propose to include in the
PQRS measure set for CY 2016 and beyond. We have also indicated the
PQRS reporting mechanism or mechanisms through which each measure could
be submitted, as well as the MAP recommendations. Additional comments
and measure information from the MAP review can be found at http://www.qualityforum.org/WorkArea/linkit.aspx?LinkIdentifier=id&ItemID=78711.
Please note that, in some cases specified below, we propose adding
a measure to the PQRS measure set that the MAP believes requires
further development prior to inclusion or does not support a measure
for inclusion in the PQRS measure set. Please note that, while CMS
takes these recommendations into consideration, in these instances, CMS
believes the rationale provided for proposing the addition of a measure
outweighs the MAP's recommendation.

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In Table 24, we provide our proposals for a NQS domain change for
measures that are currently available for reporting under the PQRS.

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In Table 25, we propose to remove the following measures from
reporting under the PQRS.

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In Table 26, we propose to change the mechanism(s) by which an EP
or group practice may report a respective PQRS measure beginning in
2016.

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d. PQRS Measures Groups
Section 414.90(b) defines a measures group as a subset of six or
more PQRS measures that have a particular clinical condition or focus
in common. The denominator definition and coding of the measures group
identifies the condition or focus that is shared across the measures
within a particular measures group.
We propose to add the following 3 new measures groups as shown in
Tables 27, 28 and 29 that will be available for reporting in the PQRS
beginning in 2016. Please note that, in these tables, we provide the
PQRS measure numbers for the measures within these proposed measures
groups that were previously finalized in the PQRS. New measures within
these proposed measures groups that are proposed to be added, as
indicated in Table 23 above, do not have a PQRS number. Therefore, in
lieu of a PQRS number, an ``NA'' is indicated.
Multiple Chronic Conditions Measures Group: We propose to
add the Multiple Chronic Conditions Measures Group in the CY 2016
proposed rule. A large proportion of the Medicare population are
impacted by Multiple Chronic Conditions, and providers that treat this
population are often not recognized for the complexity of treatment for
a patient with multiple chronic conditions. The addition of this
measures group would specifically identify those providers that address
the exponential complexity of treating the combination of these
conditions rather than a sum of the individual conditions. This
measures group addresses the

[[Page 41873]]

complexity of care that is required for patients that may have multiple
disease processes that require clinical management and treatment.
Cardiovascular Prevention Measures Group (Millions
Hearts): We propose to add the Cardiovascular Prevention Measures Group
in the CY 2016 proposed rule. Prior to 2015, the PQRS included a
Cardiovascular Prevention Measures Group (Measures 2, 204, 226, 236,
241 and 317 in 2014 (78 FR 74741)). The measures group was removed for
2015 PQRS reporting due to clinical guideline changes that affected
many of the measures. Given the efficacy of cardiovascular prevention
on cardiovascular health, this measures group is being re-considered
with an adjustment to align with current clinical guidelines. This
measures group is also fully supported by the Million Hearts
Initiative.
Diabetic Retinopathy Measures Group: We propose to add the
Diabetic Retinopathy Measures Group in the CY 2016 proposed rule. An
increase in the frequency of Type 2 diabetes in the pediatric age group
is associated with increased childhood obesity. The implications are
significantly increased burdens of disability and complications
associated with diabetes, including diabetic retinopathy, which has a
projected prevalence of 6 million individuals with diabetic retinopathy
by the year 2020 in the United States, and a prevalence rate of 28.5%
in all adults with diabetes aged 40 and older. The addition of the
Diabetic Retinopathy Measures Group would help to address this
significant public health problem by allowing for the comprehensive
evaluation of provider performance and patient outcomes related to a
disease that threatens the eyesight of a very large population, and by
supporting improvements in quality of care and outcomes related to
diabetic retinopathy.

Table 27--Cardiovascular Prevention Measures Group for 2016 and Beyond
[Millions Hearts]
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0419/130........................... Documentation of Current Medications in the Centers for Medicare &
Medical Record: Percentage of visits for Medicaid Services/Quality
patients aged 18 years and older for which the Insights of Pennsylvania.
EP attests to documenting a list of current
medications using all immediate resources
available on the date of the encounter. This
list must include ALL known prescriptions,
over-the-counters, herbals, and vitamin/
mineral/dietary (nutritional) supplements AND
must contain the medications' name, dosage,
frequency and route of administration.
0028/226........................... Preventive Care and Screening: Tobacco use: American Medical
Screening and Cessation Intervention: Association--Physician
Percentage of patients aged 18 years and older Consortium for
who were screened for tobacco use one or more Performance Improvement.
times within 24 months AND who received
cessation counseling intervention if
identified as a tobacco user.
0068/204........................... Ischemic Vascular Disease (IVD): Use of Aspirin National Committee for
or Another Antithrombotic: Percentage of Quality Assurance.
patients 18 years of age and older who were
discharged alive for acute myocardial
infarction (AMI), coronary artery bypass graft
(CABG) or percutaneous coronary interventions
(PCI) in the 12 months prior to the
measurement period, or who had an active
diagnosis of ischemic vascular disease (IVD)
during the measurement period and who had
documentation of use of aspirin or another
antithrombotic during the measurement period.
0018/236........................... Controlling High Blood Pressure: Percentage of National Committee for
patients 18-85 years of age who had a Quality Assurance
diagnosis of hypertension and whose blood
pressure was adequately controlled (<140/90
mmHg) during the measurement period.
N/A/317............................ Preventive Care and Screening: Screening for Centers for Medicare &
High Blood Pressure and Follow-Up Documented: Medicaid Services/Quality
Percentage of patients aged 18 years and older Insights of Pennsylvania.
seen during the reporting period who were
screened for high blood pressure AND a
recommended follow-up plan is documented based
on the current blood pressure (BP) reading as
indicated.
N/A/N/A............................ Statin Therapy for the Prevention and Treatment Centers for Medicare &
of Cardiovascular Disease: Percentage of high- Medicaid Services/Quality
risk adult patients aged >=21 years who were Insights of Pennsylvania/
previously diagnosed with or currently have an Mathematica.
active diagnosis of clinical atherosclerotic
cardiovascular disease (ASCVD); OR adult
patients aged >=21 years with a fasting or
direct Low-Density Lipoprotein Cholesterol
(LDL-C) level >=190 mg/dL; OR patients aged 40-
75 years with a diagnosis of diabetes with a
fasting or direct Low-Density Lipoprotein
Cholesterol (LDL-C) level of 70-189 mg/dL who
were prescribed or are already on statin
medication therapy during the measurement
period.
This is a new measure described in Table 23
above.
----------------------------------------------------------------------------------------------------------------

Table 28--Diabetic Retinopathy Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0059/001........................... Diabetes: Hemoglobin A1c Poor Control: National Committee for
Percentage of patients 18-75 years of age with Quality Assurance.
diabetes who had hemoglobin A1c >9.0% during
the measurement period.
0088/018........................... Diabetic Retinopathy: Documentation of Presence American Medical
or Absence of Macular Edema and Level of Association-Physician
Severity of Retinopathy: Percentage of Consortium for
patients aged 18 years and older with a Performance Improvement/
diagnosis of diabetic retinopathy who had a National Committee for
dilated macular or fundus exam performed which Quality Assurance.
included documentation of the level of
severity of retinopathy and the presence or
absence of macular edema during one or more
office visits within 12 months.

[[Page 41874]]

0089/019........................... Diabetic Retinopathy: Communication with the American Medical
Physician Managing Ongoing Diabetes Care: Association-Physician
Percentage of patients aged 18 years and older Consortium for
with a diagnosis of diabetic retinopathy who Performance Improvement/
had a dilated macular or fundus exam performed National Committee for
with documented communication to the physician Quality Assurance.
who manages the ongoing care of the patient
with diabetes mellitus regarding the findings
of the macular or fundus exam at least once
within 12 months.
0055/117........................... Diabetes: Eye Exam: Percentage of patients 18 National Committee for
through 75 years of age with a diagnosis of Quality Assurance.
diabetes (type 1 and type 2) who had a retinal
or dilated eye exam by an eye care
professional in the measurement period or a
negative retinal or dilated eye exam (negative
for retinopathy) in the year prior to the
measurement period.
0419/130........................... Documentation of Current Medications in the Centers for Medicare &
Medical Record: Percentage of visits for Medicaid Services/Quality
patients aged 18 years and older for which the Insights of Pennsylvania.
EP attests to documenting a list of current
medications using all immediate resources
available on the date of the encounter. This
list must include ALL known prescriptions,
over-the-counters, herbals, and vitamin/
mineral/dietary (nutritional) supplements AND
must contain the medications' name, dosage,
frequency and route of administration.
0028/226........................... Preventive Care and Screening: Tobacco Use: American Medical
Screening and Cessation Intervention: Association-Physician
Percentage of patients 18 years and older who Consortium for
were screened for tobacco use one or more Performance Improvement.
times within 24 months AND who received
cessation counseling intervention if
identified as a tobacco user.
N/A/317............................ Preventive Care and Screening: Screening for Centers for Medicare &
High Blood Pressure and Follow-Up Documented: Medicaid Services/Quality
Percentage of patients aged 18 years and older Insights of Pennsylvania.
seen during the reporting period who were
screened for high blood pressure AND a
recommended follow-up plan is documented based
on the current blood pressure (BP) reading as
indicated.
----------------------------------------------------------------------------------------------------------------

Table 29--Multiple Chronic Conditions Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047........................... Care Plan: Percentage of patients aged 65 years National Committee for
and older who have an advance care plan or Quality Assurance/
surrogate decision maker documented in the American Medical
medical record or documentation in the medical Association-Physician
record that an advance care plan was discussed Consortium for
but the patient did not wish or was not able Performance Improvement.
to name a surrogate decision maker or provide
an advance care plan.
0041/110........................... Preventive Care and Screening: Influenza American Medical
Immunization: Percentage of patients aged 6 Association-Physician
months and older seen for a visit between Consortium for
October 1 and March 31 who received an Performance Improvement.
influenza immunization OR who reported
previous receipt of an influenza immunization.
0421/128........................... Preventive Care and Screening: Body Mass Index Centers for Medicare &
(BMI) Screening and Follow-Up Plan: Percentage Medicaid Services/Quality
of patients aged 18 years and older with a BMI Insights of Pennsylvania.
documented during the current encounter or
during the previous six months AND with a BMI
outside of normal parameters, a follow-up plan
is documented during the encounter or during
the previous six months of the current
encounter.
Normal Parameters: Age 65 years and older BMI
>=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
and <25 kg/m2.
0419/130........................... Documentation of Current Medications in the Centers for Medicare &
Medical Record: Percentage of visits for Medicaid Services/Quality
patients aged 18 years and older for which the Insights of Pennsylvania.
EP attests to documenting a list of current
medications using all immediate resources
available on the date of the encounter. This
list must include ALL known prescriptions,
over-the-counters, herbals, and vitamin/
mineral/dietary (nutritional) supplements AND
must contain the medications' name, dosage,
frequency and route of administration.
0420/131........................... Pain Assessment and Follow-Up: Percentage of Centers for Medicare &
visits for patients aged 18 years and older Medicaid Services/Quality
with documentation of a pain assessment using Insights of Pennsylvania.
a standardized tool(s) on each visit AND
documentation of a follow-up plan when pain is
present.
0418/134........................... Preventive Care and Screening: Screening for Centers for Medicare &
Clinical Depression and Follow-Up Plan: Medicaid Services/Quality
Percentage of patients aged 12 years and older Insights of Pennsylvania.
screened for clinical depression on the date
of the encounter using an age appropriate
standardized depression screening tool AND if
positive, a follow-up plan is documented on
the date of the positive screen.
0101/154........................... Falls: Risk Assessment: Percentage of patients National Committee for
aged 65 years and older with a history of Quality Assurance/
falls who had a risk assessment for falls American Medical
completed within 12 months. Association-Physician
Consortium for
Performance Improvement.

[[Page 41875]]

0101/155........................... Falls: Plan of Care: Percentage of patients National Committee for
aged 65 years and older with a history of Quality Assurance/
falls who had a plan of care for falls American Medical
documented within 12 months. Association-Physician
Consortium for
Performance Improvement.
0022/238........................... Use of High-Risk Medications in the Elderly: National Committee for
Percentage of patients 66 years of age and Quality Assurance.
older who were ordered high-risk medications.
Two rates are reported.
a. Percentage of patients who were ordered at
least one high-risk medication.
b. Percentage of patients who were ordered at
least two different high-risk medications.
----------------------------------------------------------------------------------------------------------------

We propose to amend the following previously finalized measures
groups for reporting in the PQRS beginning in 2016. Please note that,
in these tables, we provide the PQRS measure numbers for the measures
within these proposed measures groups that were previously finalized in
the PQRS. New measures within these proposed measures groups that are
proposed to be added, as indicated in Table 23 above, do not have a
PQRS number. Therefore, in lieu of a PQRS number, an ``NA'' is
indicated.

Table 29A--Coronary Artery Bypass Graft (CABG) Measures Group for 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0134/043........................... Coronary Artery Bypass Graft (CABG): Use of Society of Thoracic
Internal Mammary Artery (IMA) in Patients with Surgeons.
Isolated CABG Surgery: Percentage of patients
aged 18 years and older undergoing isolated
Coronary Artery Bypass Graft surgery who
received an Internal Mammary Artery graft.
0236/044........................... Coronary Artery Bypass Graft (CABG): Center for Medicare &
Preoperative Beta-Blocker in Patients with Medicaid Services/Quality
Isolated CABG Surgery: Percentage of isolated Insights of Pennsylvania.
Coronary Artery Bypass Graft (CABG) surgeries
for patients aged 18 years and older who
received a beta-blocker within 24 hours prior
to surgical incision.
0129/164........................... Coronary Artery Bypass Graft (CABG): Prolonged Society of Thoracic
Intubation: Percentage of patients aged 18 Surgeons.
years and older undergoing isolated Coronary
Artery Bypass Graft (CABG) surgery who require
postoperative intubation >24 hours.
0130/165........................... Coronary Artery Bypass Graft (CABG): Deep Society of Thoracic
Sternal Wound Infection Rate: Percentage of Surgeons.
patients aged 18 years and older undergoing
isolated Coronary Artery Bypass Graft surgery
who, within 30 days postoperatively, develop
deep sternal wound infection involving muscle,
bone, and/or mediastinum requiring operative
intervention.
0131/166........................... Coronary Artery Bypass Graft (CABG): Stroke: Society of Thoracic
Percentage of patients aged 18 years and older Surgeons.
undergoing isolated Coronary Artery Bypass
Graft surgery who have a postoperative stroke
(i.e., any confirmed neurological deficit of
abrupt onset caused by a disturbance in blood
supply to the brain) that did not resolve
within 24 hours.
0114/167........................... Coronary Artery Bypass Graft (CABG): Society of Thoracic
Postoperative Renal Failure: Percentage of Surgeons.
patients aged 18 years and older undergoing
isolated Coronary Artery Bypass Graft surgery
(without pre-existing renal failure) who
develop postoperative renal failure or require
dialysis.
0115/168........................... Coronary Artery Bypass Graft (CABG): Surgical Society of Thoracic
Re-Exploration: Percentage of patients aged 18 Surgeons.
years and older undergoing isolated Coronary
Artery Bypass Graft surgery who require a
return to the operating room (OR) during the
current hospitalization for mediastinal
bleeding with or without tamponade, graft
occlusion, valve dysfunction, or other cardiac
reason.
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We propose to amend the following measures groups for reporting in
the PQRS beginning in 2016.

Table 29B--Dementia Measures Group for 2016 and Beyond
[CMS proposes to add PQRS #134 preventive care and screening and delete PQRS #285 dementia: Screening for
depressive symptoms from this measures group]
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0326/047........................... Care Plan: Percentage of patients aged 65 years National Committee for
and older who have an advance care plan or Quality Assurance/
surrogate decision maker documented in the American Medical
medical record or documentation in the medical Association-Physician
record that an advance care plan was discussed Consortium for
but the patient did not wish or was not able Performance Improvement.
to name a surrogate decision maker or provide
an advance care plan.

[[Page 41876]]

0418/134........................... Preventive Care and Screening: Screening for Center for Medicare &
Clinical Depression and Follow-Up Plan: Medicaid Services/Quality
Percentage of patients aged 12 years and older Insights of Pennsylvania.
screened for clinical depression on the date
of the encounter using an age appropriate
standardized depression screening tool AND if
positive, a follow-up plan is documented on
the date of the positive screen.
N.A/280............................ Dementia: Staging of Dementia: Percentage of American Academy of
patients, regardless of age, with a diagnosis Neurology/American
of dementia whose severity of dementia was Psychological
classified as mild, moderate or severe at Association.
least once within a 12 month period.
N/A/281............................ Dementia: Cognitive Assessment: Percentage of American Medical
patients, regardless of age, with a diagnosis Association-Physician
of dementia for whom an assessment of Consortium for
cognition is performed and the results Performance Improvement.
reviewed at least once within a 12 month
period.
N/A/282............................ Dementia: Functional Status Assessment: American Academy of
Percentage of patients, regardless of age, Neurology/American
with a diagnosis of dementia for whom an Psychological
assessment of functional status is performed Association.
and the results reviewed at least once within
a 12 month period.
N/A/283............................ Dementia: Neuropsychiatric Symptom Assessment: American Academy of
Percentage of patients, regardless of age, Neurology/American
with a diagnosis of dementia and for whom an Psychological
assessment of neuropsychiatric symptoms is Association.
performed and results reviewed at least once
in a 12 month period.
N/A/284............................ Dementia: Management of Neuropsychiatric American Academy of
Symptoms: Percentage of patients, regardless Neurology/American
of age, with a diagnosis of dementia who have Psychological
one or more neuropsychiatric symptoms who Association.
received or were recommended to receive an
intervention for neuropsychiatric symptoms
within a 12 month period.
N/A/286............................ Dementia: Counseling Regarding Safety Concerns: American Academy of
Percentage of patients, regardless of age, Neurology/American
with a diagnosis of dementia or their Psychological
caregiver(s) who were counseled or referred Association.
for counseling regarding safety concerns
within a 12 month period.
N/A/287............................ Dementia: Counseling Regarding Risks of American Academy of
Driving: Percentage of patients, regardless of Neurology/American
age, with a diagnosis of dementia or their Psychological
caregiver(s) who were counseled regarding the Association.
risks of driving and the alternatives to
driving at least once within a 12 month period.
N/A/288............................ Dementia: Caregiver Education and Support: American Academy of
Percentage of patients, regardless of age, Neurology/American
with a diagnosis of dementia whose Psychological
caregiver(s) were provided with education on Association.
dementia disease management and health
behavior changes AND referred to additional
sources for support within a 12 month period.
----------------------------------------------------------------------------------------------------------------

Table 29C--Diabetes Measures Group for 2016 and Beyond
[CMS Proposes to Add PQRS #126 Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy and Delete
PQRS #163 Diabetes: Foot Exam From This Measures Group]
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0059/001........................... Diabetes: Hemoglobin A1c Poor Control: National Committee for
Percentage of patients 18-75 years of age with Quality Assurance.
diabetes who had hemoglobin A1c >9.0% during
the measurement period.
0041/110........................... Preventive Care and Screening: Influenza American Medical
Immunization: Percentage of patients aged 6 Association-Physician
months and older seen for a visit between Consortium for
October 1 and March 31 who received an Performance Improvement.
influenza immunization OR who reported
previous receipt of an influenza immunization.
0055/117........................... Diabetes: Eye Exam: Percentage of patients 18 National Committee for
through 75 years of age with a diagnosis of Quality Assurance.
diabetes (type 1 and type 2) who had a retinal
or dilated eye exam in the measurement period
or a negative retinal or dilated eye exam
(negative for retinopathy) in the year prior
to the measurement period.
0062/119........................... Diabetes: Medical Attention for Neuropathy: The National Committee for
percentage of patients 18-75 years of age with Quality Assurance.
diabetes who had a nephropathy screening test
or evidence of nephropathy during the
measurement period.
0417/126........................... Diabetes Mellitus: Diabetic Foot and Ankle American Podiatric Medical
Care, Peripheral Neuropathy--Neurological Association.
Evaluation: Percentage of patients aged 18
years and older with a diagnosis of diabetes
mellitus who had a neurological examination of
their lower extremities within 12 months.
0028/226........................... Preventive Care and Screening: Tobacco Use: American Medical
Screening and Cessation Intervention: Association-Physician
Percentage of patients 18 years and older who Consortium for
were screened for tobacco use one or more Performance Improvement.
times within 24 months AND who received
cessation counseling intervention if
identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------

[[Page 41877]]

Table 29D--Preventive Care Measures Group for 2016 and Beyond
[CMS Proposes to Add NQF #2152 Preventive Care and Screening: Unhealthy Alcohol Use: Screening & Brief
Counseling and Delete PQRS #173 Preventive Care and Screening: Unhealthy Alcohol Use--Screening From This
Measures Group]
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0046/039........................... Screening or Therapy for Osteoporosis for Women National Committee for
Aged 65 Years and Older: Percentage of female Quality Assurance/
patients aged 65 years and older who have a American Medical
central dual-energy X-ray absorptiometry (DXA) Association-Physician
measurement ordered or performed at least once Consortium for
since age 60 or pharmacologic therapy Performance Improvement.
prescribed within 12 months.
N/A/048............................ Urinary Incontinence: Assessment of Presence or National Committee for
Absence of Urinary Incontinence in Women Aged Quality Assurance/
65 Years and Older: Percentage of female American Medical
patients aged 65 years and older who were Association-Physician
assessed for the presence or absence of Consortium for
urinary incontinence within 12 months. Performance Improvement.
0041/110........................... Preventive Care and Screening: Influenza American Medical
Immunization: Percentage of patients aged 6 Association-Physician
months and older seen for a visit between Consortium for
October 1 and March 31 who received an Performance Improvement.
influenza immunization OR who reported
previous receipt of an influenza immunization.
0043/111........................... Pneumonia Vaccination Status for Older Adults: National Committee for
Percentage of patients 65 years of age and Quality Assurance.
older who have ever received a pneumococcal
vaccine.
2372/112........................... Breast Cancer Screening: Percentage of women 50 National Committee for
through 74 years of age who had a mammogram to Quality Assurance.
screen for breast cancer within 27 months.
0034/113........................... Colorectal Cancer Screening: Percentage of National Committee for
patients 50 through 75 years of age who had Quality Assurance.
appropriate screening for colorectal cancer.
0421/128........................... Preventive Care and Screening: Body Mass Index Center for Medicare &
(BMI) Screening and Follow-Up Plan: Percentage Medicaid Services/Quality
of patients aged 18 years and older with a BMI Insights of Pennsylvania.
documented during the current encounter or
during the previous six months AND with a BMI
outside of normal parameters, a follow-up plan
is documented during the encounter or during
the previous six months of the encounter
Normal Parameters: Age 65 years and older BMI
>=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
and <25 kg/m2.
0418/134........................... Preventive Care and Screening: Screening for Center for Medicare &
Clinical Depression and Follow-Up Plan: Medicaid Services/Quality
Percentage of patients aged 12 years and older Insights of Pennsylvania.
screened for clinical depression on the date
of the encounter using an age appropriate
standardized depression screening tool AND if
positive, a follow-up plan is documented on
the date of the positive screen.
0028/226........................... Preventive Care and Screening: Tobacco Use: American Medical
Screening and Cessation Intervention: Association-Physician
Percentage of patients 18 years and older who Consortium for
were screened for tobacco use one or more Performance Improvement.
times within 24 months AND who received
cessation counseling intervention if
identified as a tobacco user.
2152/N/A........................... Preventive Care and Screening: Unhealthy American Medical
Alcohol Use: Screening & Brief Counseling: Association-Physician
Percentage of patients aged 18 years and older Consortium for
who were screened at least once within the Performance Improvement.
last 24 months for unhealthy alcohol use using
a systematic screening method AND who received
brief counseling if identified as an unhealthy
alcohol user. This is a new measure described
in Table 23 above.
----------------------------------------------------------------------------------------------------------------

Table 29E--Rheumatoid Arthritis Measures Group for 2016 and Beyond
[CMS Proposes to Add PQRS 337 Tuberculosis Prevention for Psoriasis, Psoriatic Arthritis and Rheumatoid
Arthritis Patients on a Biological Immune Response Modifier to This Measures Group]
----------------------------------------------------------------------------------------------------------------
NQF/PQRS Measure title and description Measure developer
----------------------------------------------------------------------------------------------------------------
0054/108........................... Rheumatoid Arthritis (RA): Disease Modifying National Committee for
Anti-Rheumatic Drug (DMARD) Therapy: Quality Assurance.
Percentage of patients aged 18 years and older
who were diagnosed with RA and were
prescribed, dispensed, or administered at
least one ambulatory prescription for a
disease-modifying anti-rheumatic drug (DMARD).
0421/128........................... Preventive Care and Screening: Body Mass Index Center for Medicare &
(BMI) Screening and Follow-Up Plan: Percentage Medicaid Services/Quality
of patients aged 18 years and older with a BMI Insights of Pennsylvania.
documented during the current encounter or
during the previous six months AND with a BMI
outside of normal parameters, a follow-up plan
is documented during the encounter or during
the previous six months of the encounter
Normal Parameters: Age 65 years and older BMI
>=23 and <30 kg/m2; Age 18-64 years BMI >=18.5
and <25 kg/m2.
0420/131........................... Pain Assessment and Follow-Up: Percentage of Center for Medicare &
visits for patients aged 18 years and older Medicaid Services/Quality
with documentation of a pain assessment using Insights of Pennsylvania.
a standardized tool(s) on each visit AND
documentation of a follow-up plan when pain is
present.
N/A/176............................ Rheumatoid Arthritis (RA): Tuberculosis American College of
Screening: Percentage of patients aged 18 Rheumatology.
years and older with a diagnosis of rheumatoid
arthritis (RA) who have documentation of a
tuberculosis (TB) screening performed and
results interpreted within 6 months prior to
receiving a first course of therapy using a
biologic disease-modifying anti-rheumatic drug
(DMARD).
N/A/177............................ Rheumatoid Arthritis (RA): Periodic Assessment American College of
of Disease Activity: Percentage of patients Rheumatology.
aged 18 years and older with a diagnosis of
rheumatoid arthritis (RA) who have an
assessment and classification of disease
activity within 12 months.

[[Page 41878]]

N/A/178............................ Rheumatoid Arthritis (RA): Functional Status American College of
Assessment: Percentage of patients aged 18 Rheumatology.
years and older with a diagnosis of rheumatoid
arthritis (RA) for whom a functional status
assessment was performed at least once within
12 months.
N/A/179............................ Rheumatoid Arthritis (RA): Assessment and American College of
Classification of Disease Prognosis: Rheumatology.
Percentage of patients aged 18 years and older
with a diagnosis of rheumatoid arthritis (RA)
who have an assessment and classification of
disease prognosis at least once within 12
months.
N/A/180............................ Rheumatoid Arthritis (RA): Glucocorticoid American College of
Management: Percentage of patients aged 18 Rheumatology.
years and older with a diagnosis of rheumatoid
arthritis (RA) who have been assessed for
glucocorticoid use and, for those on prolonged
doses of prednisone >=10 mg daily (or
equivalent) with improvement or no change in
disease activity, documentation of
glucocorticoid management plan within 12
months.
N/A/337............................ Tuberculosis Prevention for Psoriasis, American College of
Psoriatic Arthritis and Rheumatoid Arthritis Rheumatology.
Patients on a Biological Immune Response
Modifier: Percentage of patients whose
providers are ensuring active tuberculosis
prevention either through yearly negative
standard tuberculosis screening tests or are
reviewing the patient's history to determine
if they have had appropriate management for a
recent or prior positive test.
----------------------------------------------------------------------------------------------------------------

e. Measures Available for Reporting in the GPRO Web Interface
We finalized the measures that are available for reporting in the
GPRO web interface for 2015 and beyond in the CY 2015 PFS final rule
(79 FR 67893 through 67902). The current measures available for
reporting under the GPRO web interface are available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014_GPROWebInterface_MeasuresList_NarrativeSpecs_ReleaseNotes_12132013.zip. We are proposing to adopt the following measure in Table 30 for
reporting via the GPRO web interface beginning in 2016:

Table 30--Measure for Addition to the Group Practice Reporting Option Web Interface Beginning in 2016 and Beyond
----------------------------------------------------------------------------------------------------------------
Measure and title Other quality
NQF/PQRS GPRO Module description [yen] Measure steward reporting programs
----------------------------------------------------------------------------------------------------------------
Additions
----------------------------------------------------------------------------------------------------------------
N/A/N/A.............. STAT-1 (Statin)..... Statin Therapy for the Centers for MSSP.
Prevention and Treatment Medicare &
of Cardiovascular Medicaid Services/
Disease: Percentage of Quality Insights
high-risk adult patients of Pennsylvania/
aged >=21 years who were Mathematica.
previously diagnosed
with or currently have
an active diagnosis of
clinical atherosclerotic
cardiovascular disease
(ASCVD); OR adult
patients aged >=21 years
with a fasting or direct
Low-Density Lipoprotein
Cholesterol (LDL-C)
level >=190 mg/dL; OR
patients aged 40-75
years with a diagnosis
of diabetes with a
fasting or direct Low-
Density Lipoprotein
Cholesterol (LDL-C)
level of 70-189 mg/dL
who were prescribed or
are already on statin
medication therapy
during the measurement
period.
Rationale: Although this
measure is not NQF-
endorsed, we are
exercising our exception
authority under section
1848(k)(2)(C)(ii) of the
Act to propose this
measure because a
feasible and practical
measure has not been
endorsed by the NQF that
has been submitted to
the measures application
partnership. This is a
new measure that is
proposed for the GPRO
Web Interface in the
PQRS for the CY 2016 PFS
proposed rule. This
measure addresses statin
therapy, which is an
important treatment
option for patients with
cardiovascular disease,
which includes up-to-
date clinical guidelines.
----------------------------------------------------------------------------------------------------------------

[[Page 41879]]

7. Request for Input on the Provisions Included in the Medicare Access
and CHIP Reauthorization Act of 2015 (MACRA)
The primary purpose of the Medicare Access and CHIP Reauthorization
Act of 2015 (Pub. L. 114-10, enacted on April 16, 2015) (MACRA) was to
repeal the Medicare sustainable growth rate (SGR) and strengthen
Medicare access by improving physician payments and making other
improvements, as well as to reauthorize the Children's Health Insurance
Program. In this section of the proposed rule, we are seeking public
input on the following provisions of MACRA:

Section 101(b): Consolidation of Certain Current Law
Performance Programs with New Merit-based Incentive Payment System
(hereinafter MIPS)
Section 101(c): Merit-based Incentive Payment System
Section 101(e): Promoting Alternative Payment Models
a. The Merit-Based Incentive Payment System (MIPS)
Section 1848(q) of the Act, added by section 101(c) of the MACRA,
requires creation of the MIPS, applicable beginning with payments for
items and services furnished on or after January 1, 2019, under which
the Secretary shall: (1) Develop a methodology for assessing the total
performance of each MIPS eligible professional according to performance
standards for a performance period for a year; (2) using the
methodology, provide for a composite performance score for each
eligible professional for each performance period; and (3) use the
composite performance score of the MIPS eligible professional for a
performance period for a year to determine and apply a MIPS adjustment
factor (and, as applicable, an additional MIPS adjustment factor) to
the professional for the year. To aid in the planning and
implementation of the MIPS, we are seeking public input on provisions
related to the MIPS, including, but not limited to:
Low-volume threshold: Section 1848(q)(1)(C)(iv) of the Act
requires the Secretary to select a low-volume threshold to apply for
purposes of excluding certain eligible professionals (as defined in
section 1848(k)(3)(B) of the Act) from the definition of a MIPS
eligible professional. The low-volume threshold may include one or more
or a combination of the following: (1) The minimum number (as
determined by the Secretary) of individuals enrolled under Medicare
Part B who are treated by the eligible professional for the performance
period involved; (2) the minimum number (as determined by the
Secretary) of items and services furnished to individuals enrolled
under Medicare Part B by such professional for such performance period;
and (3) the minimum amount (as determined by the Secretary) of allowed
charges billed by such professional under Medicare Part B for such
performance period. We seek comment as to what would be an appropriate
low-volume threshold for purposes of excluding certain eligible
professionals (as defined in section 1848(k)(3)(B) of the Act) from the
definition of a MIPS eligible professional. We also seek comment as to
whether CMS should consider establishing a low-volume threshold using
more than one or a combination of factors or, alternatively, whether
CMS should focus on establishing a low-volume threshold based on one
factor. We invite comments on which factors to include, individually or
in combination, in determining a low-volume threshold.
Low-volume thresholds are currently used in other CMS reporting
programs. For example, as required by section 1903(t)(2) of the Act,
eligible professionals and acute care hospitals must meet certain
Medicaid patient volume thresholds (in general, 30 percent for eligible
professionals and 10 percent for acute care hospitals) to be eligble
for the Medicaid EHR Incentive Program. We would consider proposing
similar thresholds, such as to exclude eligible professionals that do
not have at least 10 percent of their patient volume derived from
Medicare Part B encounters from participating in the MIPs. We seek
comment as to whether this would be an appropriate low-volume threshold
for the MIPS. In addition, we invite comments on the applicability of
existing low-volume thresholds used in other CMS reporting programs
toward MIPs.
Clinical practice improvement activities: Section
1848(q)(2)(A)(iii) of the Act provides for clinical practice
improvement activities as one of the performance categories used in
determining the composite performance score under the MIPS. In section
1848(q)(2)(C)(v)(III) of the Act, clinical practice improvement
activities are defined as activities that relevant eligible
professional organizations and other relevant stakeholders identify as
improving clinical practice or care delivery and that the Secretary
determines, when effectively executed, are likely to result in improved
outcomes. Section 1848(q)(2)(B)(iii) of the Act provides that the
clinical practice improvement activities under subcategories specified
by the Secretary for a performance period for a year must include at
least the following subcategories:
(1) Expanded practice access, such as same day appointments for
urgent needs and after-hours access to clinician advice.
(2) Population management, such as monitoring health conditions of
individuals to provide timely health care interventions or
participation in a qualified clinical data registry.
(3) Care coordination, such as timely communication of test
results, timely exchange of clinical information to patients and other
providers, and use of remote monitoring or telehealth.
(4) Beneficiary engagement, such as the establishment of care plans
for individuals with complex care needs, beneficiary self-management
assessment and training, and using shared decision-making mechanisms.
(5) Patient safety and practice assessment, such as through use of
clinical or surgical checklists and practice assessments related to
maintaining certification.
(6) Participation in an alternative payment model (as defined in
section 1833(z)(3)(C) of the Act).
We seek comment on what activities could be classified as clinical
practice improvement activities according to this definition.
b. Alternative Payment Models
Section 101(e) of MACRA, Promoting Alternative Payment Models,
introduces a framework for promoting and developing alternative payment
models (APMs) and providing incentive payments for eligible
professionals who participate in APMs. The statutory amendments made by
this section have payment implications for eligible professionals
beginning in 2019. We are broadly seeking public comment on the topics
in this section through this proposed rule.
In preparation to implement the changes introduced by section
101(e) of MACRA, we intend to publish questions for public comment on
these amendments through a forthcoming Request for Information (RFI).
Section 101(e) of MACRA includes the following provisions: Increasing
Transparency of Physician-Focused Payment Models and Criteria and
Process for Submission and Review of Physician-focused Payment Models
(section 101(e)(1) of MACRA adds new section 1868(c) of the Act),
Incentive Payments for Participation in Eligible Alternative Payment
Models (section 101(e)(2) of MACRA adds new section 1833(z) of the
Act), Encouraging

[[Page 41880]]

Development and Testing of Certain Models (section 101(e)(4) of MACRA
amends section 1115A(b)(2) of the Act), a study on Integrating Medicare
Alternative Payment Models in the Medicare Advantage payment system
(section 101(e)(6) of MACRA), and Study and Report on Fraud Related to
Alternative Payment Models under the Medicare Program (section
101(e)(7) of MACRA).
We intend to publish specific questions in the forthcoming RFI on
topics within these provisions, including the following: The criteria
for assessing physician-focused payment models; the criteria and
process for the submission of physician-focused payment models eligible
APMS, qualifying APM participants; the Medicare payment threshold
option and the combination all-payer and Medicare payment threshold
option for qualifying and partial-qualifying APM participants; the time
period to use to calculate eligibility for qualifying and partial-
qualifying APM participants, eligible APM entities, quality measures
and EHR use requirements; and the definition of nominal financial risk
for eligible APM entities. In anticipation of the future RFI and
subsequent notice and comment rulemaking, we welcome comments on
approaches to implementing any of the topics listed in this section,
including in provisions not enumerated above, and any other related
concerns.

J. Electronic Clinical Quality Measures (eCQM) and Certification
Criteria; and Electronic Health Record (EHR) Incentive Program-
Comprehensive Primary Care (CPC) Initiative and Medicare Meaningful Use
Aligned Reporting

1. Background
The Health Information Technology for Economic and Clinical Health
(HITECH) Act (Title IV of Division B of the ARRA, together with Title
XIII of Division A of the ARRA) authorizes incentive payments under
Medicare and Medicaid for the adoption and meaningful use of certified
EHR technology (CEHRT). Section 1848(o)(2)(B)(iii) of the Act requires
that in selecting clinical quality measures (CQMs) for eligible
professionals (EPs) to report under the EHR Incentive Program, and in
establishing the form and manner of reporting, the Secretary shall seek
to avoid redundant or duplicative reporting otherwise required. As
such, we have taken steps to establish alignments among various quality
reporting and payment programs that include the submission of CQMs.
Under section 1848(o)(2)(A)(iii) of the Act and the definition of
``meaningful EHR user'' under Sec. 495.4, EPs must report on CQMs
selected by CMS using CEHRT, as part of being a meaningful EHR user
under the Medicare EHR Incentive Program. For CY 2012 and subsequent
years, Sec. 495.8(a)(2)(ii) requires an EP to successfully report the
CQMs selected by CMS to CMS or the states, as applicable, in the form
and manner specified by CMS or the states, as applicable.
In the CY 2014 PFS final rule with comment period (78 FR 74756), we
finalized our proposal to require EPs who seek to report CQMs
electronically under the Medicare EHR Incentive Program to use the most
recent version of the electronic specifications for the CQMs and have
CEHRT that is tested and certified to the most recent version of the
electronic specifications for the CQMs. We stated that we believe it is
important for EPs to electronically report the most recent versions of
the electronic specifications for the CQMs as updated measure versions
to correct minor inaccuracies found in prior measure versions. We
stated that to ensure that CEHRT products can successfully transmit CQM
data using the most recent version of the electronic specifications for
the CQMs, it is important that the product be tested and certified to
the most recent version of the electronic specifications for the CQMs.
2. Certification Requirements for Reporting Electronic Clinical Quality
Measures (eCQMs) in the EHR Incentive Program and PQRS
In the CY 2015 PFS final rule with comment period (79 FR 67906), we
finalized our proposal for the Medicare EHR Incentive Program that,
beginning in CY 2015, EPs are not required to ensure that their CEHRT
products are recertified to the most recent version of the electronic
specifications for the CQMs. Although we are not requiring
recertification, EPs must still report the most recent version of the
electronic specifications for the CQMs if they choose to report CQMs
electronically for the Medicare EHR Incentive Program.
In the FY 2016 IPPS proposed rule (80 FR 24611 through 24615), HHS'
Office of the National Coordinator for Health Information Technology
(ONC) proposed a certification criterion for ``CQMs--report'' at 45 CFR
170.315(c)(3). This proposal would require that health information
technology enable users to electronically create a data file for
transmission of clinical quality measurement data in accordance with
the Quality Reporting Document Architecture (QRDA) Category I
(individual patient-level report) and Category III (aggregate report)
standards, at a minimum. As part of the ``CQMs--report'' criterion, ONC
also proposed to offer optional certification for EHRs according to the
``form and manner'' that CMS requires for electronic submission to
participate in the EHR Incentive Programs and PQRS. These requirements
are published annually as the ``CMS QRDA Implementation Guide'' and
posted on CMS' Web site at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/eCQM_Library.html. The latest set of
requirements (2015 CMS QRDA Implementation Guide for Eligible
Professional Programs and Hospital Quality Reporting) combines the
requirements for EPs, eligible hospitals, and CAHs. For a complete
discussion of these proposals, we refer readers to 80 FR 24611 through
24615.
In the FY 2016 IPPS proposed rule (80 FR 24323 through 24629), we
stated that we anticipate proposing to require EPs, eligible hospitals,
and CAHs seeking to report CQMs electronically as part of meaningful
use under the EHR Incentive Programs for 2016 to adhere to the
additional standards and constraints on the QRDA standards for
electronic reporting as described in the CMS QRDA Implementation Guide.
We stated that we anticipate proposing to revise the definition of
``certified electronic health record technology'' at Sec. 495.4 to
require certification to the optional portion of the 2015 Edition CQM
reporting criterion (proposed at 45 CFR 170.315(c)(3)) in the CY 2016
Medicare PFS proposed rule later this year.
Accordingly, to allow providers to upgrade to 2015 Edition CEHRT
before 2018, we propose to revise the CEHRT definition for 2015 through
2017 to require that EHR technology is certified to report CQMs, in
accordance with the optional certification, in the format that CMS can
electronically accept (CMS' ``form and manner'' requirements) if
certifying to the 2015 Edition ``CQMs--report'' certification criterion
at Sec. 170.315(c)(3). Specifically, this would require technology to
be certified to Sec. 170.315(c)(3)(i) (the QRDA Category I and III
standards) and Sec. 170.315(c)(3)(ii) (the optional CMS ``form and
manner''). We note that the proposed CEHRT definition for 2015 through
2017 included in the Stage 3 proposed rule published on March 30, 2014
(80 FR 16732 through 16804) allows providers to use 2014 Edition or
2015 Edition certified EHR technology. These

[[Page 41881]]

proposed revisions would apply for EPs, eligible hospitals, and CAHs.
We also propose to revise the CEHRT definition for 2018 and
subsequent years to require that EHR technology is certified to report
CQMs, in accordance with the optional certification, in the format that
CMS can electronically accept. Specifically, this would require
technology to be certified to Sec. 170.315(c)(3)(i) (the QRDA Category
I and III standards) and Sec. 170.315(c)(3)(ii) (the optional CMS
``form and manner''). These proposed revisions would apply for EPs,
eligible hospitals, and CAHs.
We are proposing these amendments at Sec. 495.4 to ensure that
providers participating in PQRS and the EHR Incentive Programs under
the 2015 Edition possess EHRs that have been certified to report CQMs
according to the format that CMS requires for submission. We invite
comment on our proposals.
3. Electronic Health Record (EHR) Incentive Program-Comprehensive
Primary Care (CPC) Initiative Aligned Reporting
The Comprehensive Primary Care (CPC) initiative, under the
authority of section 3021 of the Affordable Care Act, is a multi-payer
initiative fostering collaboration between public and private health
care payers to strengthen primary care. Under this initiative, we pay
participating primary care practices a care management fee to support
enhanced, coordinated services. Simultaneously, participating
commercial, state, and other federal insurance plans are also offering
enhanced support to primary care practices that provide high-quality
primary care. There are approximately 480 CPC practice sites across
seven health care markets in the U.S.
Under the CPC initiative, CPC practice sites are required to report
to CMS a subset of the CQMs that were selected in the EHR Incentive
Program Stage 2 final rule for EPs to report under the EHR Incentive
Program beginning in CY 2014 (for a list of CQMs that were selected in
the EHR Incentive Program Stage 2 final rule for EPs to report under
the EHR Incentive Program beginning in CY 2014, see 77 FR 54069 through
54075).
In the CY 2015 PFS final rule with comment period (79 FR 67906
through 67907), we finalized a group reporting option for CQMs for the
Medicare EHR Incentive Program under which EPs who are part of a CPC
practice site that successfully reports at least nine electronically
specified CQMs across two domains for the relevant reporting period in
accordance with the requirements established for the CPC Initiative and
using CEHRT would satisfy the CQM reporting component of meaningful use
for the Medicare EHR Incentive Program. If a CPC practice site is not
successful in reporting, EPs who are part of the site would still have
the opportunity to report CQMs in accordance with the requirements
established for the Medicare EHR Incentive Program in the Stage 2 final
rule. Additionally, only those EPs who are beyond their first year of
demonstrating meaningful use may use this CPC group reporting option.
The CPC practice sites must submit the CQM data in the form and manner
required by the CPC Initiative. Therefore, whether CPC required
electronic submission or attestation of CQMs, the CPC practice site
must submit the CQM data in the form and manner required by the CPC
Initiative.
We propose to retain the group reporting option for CPC practice
sites as finalized in the CY 2015 PFS final rule, but for CY 2016, to
require CPC practice sites to submit at least 9 CPC CQMs that cover 3
domains. In CY 2015, the CPC CQM subset was increased from a total of
11 to 13 measures, of which 8 measures fall in the clinical process/
effectiveness domain, 3 in the population health domain, and 2 in the
safety domain. Additionally, the CPC practice sites have had ample time
to obtain measures from the CPC eCQM subset of meaningful use measures.
Given the increased number of measures in the CPC eCQM set the addition
of one measure to the safety domain, and the sufficient time that CPC
practice sites have had to upgrade their EHR systems, it is reasonable
to expect that CPC practice sites would have enough measures to report
across the three domains as required for the Medicare EHR Incentive
Program CQM reporting requirement. If a CPC practice site is not
successful in reporting, EPs who are part of the site would still have
the opportunity to report CQMs in accordance with the current
requirements established for the Medicare EHR Incentive Program. As
proposed in the Medicare and Medicaid Programs; Electronic Health
Record Incentive Program-Modifications to Meaningful Use in 2015
through 2017 proposed rule (80 FR 20375), EPs in any year of
participation may electronically report clinical quality measures for a
reporting period in 2016. Therefore, we are proposing that for CY 2016,
EPs who are part of CPC practice site and are in their first year of
demonstrating meaningful use may also use this CPC group reporting
option to report their CQMs electronically instead of reporting CQMs by
attestation through the EHR Incentive Program's Registration and
Attestation System. However, we note that EPs who choose this CPC group
reporting option must use a reporting period for CQMs of one full year
(not 90 days), and that the data must be submitted during the
submission period from January 1, 2017 through February 28, 2017. This
means that EPs who elect to electronically report through the CPC
practice site cannot successfully attest to meaningful use prior to
October 1, 2016 (the deadline established for EPs who are first-time
meaningful users in CY 2016) and therefore will receive reduced
payments under the PFS in CY 2017 for failing to demonstrate meaningful
use, if they have not applied and been approved for a significant
hardship exception under the EHR Incentive Program. We invite public
comment on these proposals.

K. Potential Expansion of the Comprehensive Primary Care (CPC)
Initiative

1. Background
As we discussed in the CY 2013 PFS final rule (77 FR 68978) and the
CY 2014 PFS proposed rule (78 FR 43337), we are committed to supporting
advanced primary care, including the recognition of care management as
one of the critical components of primary care that contributes to
better health for individuals and reduced expenditure growth. In
January 2015, the Secretary announced the vision of ``Better Care;
Smarter Spending; Healthier People,'' with emphases on incentives
(``promote value based payment systems; bring proven models to
scale''); care delivery (``encourage the integration and coordination
of clinical care services; improve population health; promote patient
engagement through shared decision making''); and information (``create
transparency on cost and quality information; bring electronic health
information to the point of care for meaningful use''). More
information on the Secretary's January 2015 announcement is available
at http://www.hhs.gov/news/press/2015pres/01/20150126a.html.
Accordingly, we are continuing to prioritize the development and
implementation of initiatives designed to improve payment for, and
encourage long-term investment in, primary care and care management
services. These initiatives include the following payment policies,
programs, and demonstrations:
The Comprehensive Primary Care (CPC) initiative (described
in this section of this proposed rule).

[[Page 41882]]

Separate payment under the Medicare PFS beginning January
1, 2015, for new CPT code 99490. Under this CPT code, the fee-for-
service program now pays separately for non-face-to-face care
coordination services furnished to Medicare beneficiaries with multiple
chronic conditions, as provided in the CY 2014 and 2015 PFS final rules
with comment period (78 FR 74414-74427, and 79 FR 67715-67730 and 80 FR
14853, respectively).
Medicare participation in multi-payer reform initiatives
conducted by states in the Multi-payer Advanced Primary Care Practice
(MAPCP) Demonstration (described on CMS' Center for Medicare and
Medicaid Innovation's (Innovation Center's) Web site at http://innovation.cms.gov/initiatives/Multi-Payer-Advanced-Primary-Care-Practice/).
The Medicare Shared Savings Program (described in the
``Medicare Program; Medicare Shared Savings Program; Accountable Care
Organizations; Final Rule'' that appeared in the November 2, 2011
Federal Register (76 FR 67802) and the subsequent final rule that
addressed changes to the program, that appeared in the June 9, 2015
Federal Register (80 FR 32692).
The testing of the Pioneer ACO Model, designed for
experienced health care organizations (described on the Innovation
Center's Web site at http://innovation.cms.gov/initiatives/Pioneer-ACO-Model/).
The testing of the ACO Investment Model, designed to
support organizations participating in the Medicare Shared Savings
Program (described on the Innovation Center's Web site at http://innovation.cms.gov/initiatives/ACO-Investment-Model/).
The CPC initiative is a multi-payer initiative fostering
collaboration between public and private health care payers to
strengthen primary care. It is being conducted under the authority of
section 1115A of the Act (added by section 3021 of the Affordable Care
Act) (42 U.S.C. 1315a). The Act authorizes the Innovation Center to
test innovative health care payment and service delivery models that
have the potential to reduce Medicare, Medicaid, and Children's Health
Insurance Program (CHIP) expenditures while preserving or enhancing the
quality of patient care. The CPC initiative began on October 1, 2012,
and is scheduled to end on December 31, 2016. The initiative is being
implemented in seven U.S. regions: statewide in Arkansas, Colorado, New
Jersey, and Oregon; and regionally in Capital District-Hudson Valley,
New York; Cincinnati-Dayton Region, Ohio/Kentucky; and Greater Tulsa,
Oklahoma. There are approximately 480 participating practices spread
across the regions, and 38 participating payers.
In the CPC initiative, we are collaborating with commercial payers
and state Medicaid offices to test a payment model consisting of non-
visit based per beneficiary per month care management payments and
shared savings opportunities. Practices receive a monthly non-visit
based care management fee for each Medicare FFS beneficiary and, in
cases where the state Medicaid agency is participating, for each
Medicaid FFS beneficiary. The monthly payment for each Medicare
beneficiary averaged $20 per beneficiary per month during years 1 and 2
of the initiative (CY 2013-14), and averages $15 per beneficiary per
month in years 3 and 4 (CY 2015 and CY 2016). The per beneficiary per
month care management fee is in addition to the usual FFS payments that
practitioners at the practice receive for furnishing services to their
Medicare patients. Practices also receive non-visit based care
management payments from other participating CPC payers and are
expected to combine CPC revenues across payers to support a whole-
practice care delivery transformation strategy. Additionally, we are
offering each CPC practice the opportunity to share net savings
generated from improved care to Medicare beneficiaries attributable to
the practice. For each of three separate performance periods (that is,
CY 2014, CY 2015, and CY 2016), we will calculate savings to the
Medicare program generated by all CPC practices within each region,
taken as a group. A portion of any savings accomplished at the level of
each region will be distributed to practices in that region according
to each practice's performance on quality metrics (patient experience
measures, claims-based measures and electronic CQMs). Practices have
similar shared savings opportunities with other CPC payers in their
region.
The payment model is designed to support the provision by practices
of the following five comprehensive primary care functions:
(1) Risk Stratified Care Management: The provision of intensive
care management of appropriate intensity for high-risk, high-need,
high-cost patients.
(2) Access and Continuity: 24/7 access to the care team; use of
asynchronous communication; designation of a provider or care team for
patients to build continuity of care.
(3) Planned Care for Chronic Conditions and Preventive Care:
Proactive, appropriate care based on systematic assessment of patients'
needs and personalized care plans.
(4) Patient and Caregiver Engagement: Active support of patients in
managing their health care to meet their personal health goals;
establishment of systems of care that include engagement of patients
and caregivers in goal-setting and decision making, creating
opportunities for patient and caregiver engagement throughout the care
delivery process.
(5) Coordination of Care across the Medical Neighborhood:
Management by the primary care practice of communication and
information flow in support of referrals, transitions of care, and when
care is received in other settings.
The CPC initiative is testing whether provision of these five
comprehensive primary care functions by each practice site--supported
by multi-payer payment reform, the continuous use of data to guide
improvement, and meaningful use of health information technology--can
achieve improved care, better health for populations, and lower costs,
and can inform Medicare and Medicaid policy. Participating practices
must demonstrate progress towards the provision of the five
comprehensive primary care functions by meeting nine annual Milestones.
These Milestones are: (1) Budget; (2) care management for high risk
patients; (3) access and continuity; (4) patient experience; (5)
quality improvement; (6) care coordination across the medical
neighborhood; (7) shared decision making; (8) participate in learning
collaborative; (9) health information technology. Full requirements of
each Milestone are available at http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf.
Practices must also report at least 9 of 13 specified electronic
clinical quality measures (eCQMs) at the level of the practice site
population as a method of measuring the quality of care delivered to
all patients served by the practice, regardless of payer. We have aimed
to align CPC clinical quality measures and reporting with other CMS
programs to reduce burden on providers from having to report the same
measures to multiple CMS programs through various reporting mechanisms.
Under the CPC initiative, EPs participating in the CPC initiative who
would otherwise need to report PQRS measures individually, or who are
part of TINs that are participating as a whole in CPC, are able to
satisfy their PQRS reporting requirements by successfully reporting
data in accordance with the requirements for the CPC initiative. The
decision to elect this waiver must be

[[Page 41883]]

made at the level of the CPC practice site (that is, all EPs at the
site must elect the waiver). Additionally, completion of eCQM reporting
in accordance with CPC requirements allows practices to satisfy the CQM
reporting component of meaningful use for the Medicare EHR Incentive
Program. This alignment between CPC and the Medicare EHR Incentive
Program is described in section III.L. of this proposed rule.
We provide resources to help practices address the five
comprehensive primary care functions through the CPC learning system,
which includes regular webinars (regional and national), two in-person
regional learning collaborative meetings per year, opportunities for
moderated online collaboration with CPC practices across the country on
specific issues, and access to providers of technical assistance
(Regional Learning Faculty) in each region. Additionally, we support
regular, professionally moderated collaborative meetings in each region
between participating payers, practices and other interested parties
(for example, hospital systems), to monitor the progress of the
initiative at the regional level and ensure regional support to help
participating practices succeed in the CPC initiative.
The first independent evaluation report of the CPC initiative was
released on January 23, 2015, and covered impacts in the first four
payment quarters of the initiative. The evaluator's report concluded
that in these first four payment quarters, the initiative appears to
have reduced total monthly Medicare Parts A and B expenditures per
beneficiary (compared to what they would have been absent the CPC
initiative) by $14, or 2 percent (not including care management fees
paid). Results from this first year suggest that CPC has generated
nearly enough savings in Medicare health care expenditures to offset
care management fees paid by CMS. There were also statistically
significant declines in hospitalizations and emergency department
utilization. However, the report found that expenditure and service use
impact estimates differed significantly across regions. No
statistically significant impacts were seen in early measurements of
quality. Further information about the CPC initiative, including the
first independent evaluation report, is available on the Innovation
Center's Web site at http://innovation.cms.gov/initiatives/comprehensive-primary-care-initiative/.
2. Interaction With the Chronic Care Management Code
The CPC initiative includes per beneficiary per month payments for
care management services that closely overlap with the scope of service
for the new chronic care management (CCM) services code under the PFS.
To avoid duplicative payment for substantially the same services,
practitioners participating in the CPC initiative may not bill Medicare
for CCM services furnished to patients attributed to the practice for
purposes of the practice's participation in the CPC initiative, as the
payment for CCM services would be a duplicative payment for
substantially the same services for which payment is made through the
per beneficiary per month payment under CPC. Practitioners may bill
Medicare for CCM services furnished to eligible beneficiaries who are
not attributed to the practice for the purpose of the practice's
participation as part of the CPC initiative.
3. Considerations for Potential Model Expansion
Section 1115A(c) of the Act provides the Secretary with the
authority to expand (including implementation on a nationwide basis)
through rulemaking the duration and scope of a model that is being
tested under section 1115A(b) of the Act if the following findings are
made, taking into account the evaluation of the model under section
1115A(b)(4): (1) The Secretary determines that the expansion is
expected to either reduce Medicare spending without reducing quality of
care or improve the quality of patient care without increasing
spending; (2) the CMS Chief Actuary certifies that the expansion would
reduce (or would not result in any increase in) net Medicare program
spending; and (3) the Secretary determines that the expansion would not
deny or limit the coverage or provision of Medicare benefits. We are
not proposing to expand the CPC initiative at this time. The decision
of whether or not to expand the CPC initiative will be made by the
Secretary in coordination with CMS and the Office of the Chief Actuary
based on whether findings about the initiative meet the statutory
criteria for expansion under section 1115A(c) of the Act. The primary
goal for this solicitation of public comments is to receive information
about issues surrounding a potential expansion of the CPC initiative.
Furthermore, consistent with our ongoing commitment to developing new
models and refining existing models based on additional information and
experience, CMS may modify existing models or test additional models
under its testing authority under section 1115A of the Act. We may
possibly do so, taking into consideration stakeholder input, including
feedback received through public comments submitted in response to the
discussion in this section.
The following list is not an exhaustive list of issues on which we
are requesting public comments, and the inclusion of the list of issues
is not, in any way, meant to imply that all of these issues would be
addressed in any expanded model. The solicitation of public comments is
for planning purposes, and we would use additional rulemaking if we
decide to expand the initiative. We are soliciting input from the
public on the following considerations for any potential expansion of
the CPC initiative:
Practice readiness: CPC practices currently are asked to
reorganize their work flows to accomplish the five comprehensive
primary care functions. Practices must use the most recent edition of
Office of the National Coordinator Certified Electronic Health Records
Technology (CEHRT), to perform and deliver comprehensive primary care
and to monitor and report practice level electronic clinical quality
measures (eCQMs) (full details of these requirements are available at
http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf).
We are interested in understanding the proportion of primary care
practices ready for these transformation expectations and whether
readiness varies systematically for differently structured practices
(for example, small primary care practices, multi-specialty practices,
and employed primary care practices within integrated health systems).
Practice standards and reporting: We seek input on the
value and operational burden of the current CPC Milestones approach,
including the current system of quarterly reporting via a web portal
(full details of these requirements are available at http://innovation.cms.gov/Files/x/CPCI-Implementation-GuidePY2015.pdf).
Practice groupings: We seek input as to whether any
potential expansion should be limited to existing CPC regions, or
include new geographic regions. We are also interested in whether
multi-site group practices would be willing to involve all their
primary care sites in a potential expansion of the CPC initiative
(practice sites currently participating in the CPC initiative were
selected for the model individually), and how practices could

[[Page 41884]]

best be grouped for the purposes of calculating shared savings.
Interaction with state primary care transformation
initiatives: Though many primary care transformation efforts predated
the start of the CPC initiative, the number of such efforts has grown
significantly during the existence of this initiative. Various states
are leading their own efforts to transform primary care practices.
Although these efforts may have processes and goals that are similar to
those in the CPC initiative, requirements and outcomes can differ in
important ways. We are interested in whether a potential expansion of
the CPC initiative could and should exist in parallel in a state with a
separate state-led primary care transformation effort, especially if
Medicare is participating in that effort.
Learning activities: The CPC initiative currently offers a
range of live, telephone, and online support through national and
regional ``learning communities.'' In the first 2 years of the model
these efforts have been focused on building practices' capability to
deliver comprehensive primary care through fulfilment of the CPC
Milestones. In the remaining period of the model, these learning
activities are aimed at adapting and optimizing clinical services
within the five CPC comprehensive primary care functions to achieve the
aims of the CPC initiative. We are interested in what support practices
would require to provide the five comprehensive primary care CPC
functions in a potential expansion of the CPC initiative, and the
readiness of the private sector to respond to the need for this
support. We are also interested in the willingness and ability of
existing state and regional primary care or patient centered medical
home learning collaboratives to support practices in an a potential
expansion of the CPC initiative.
Payer and self-insured employer readiness: We seek input
on the readiness of currently participating payers in the CPC
initiative to expand their current investment in CPC; and the readiness
of new payers, including self-insured employers, to enter the
initiative under a potential expansion. We are interested in thresholds
for payer participation, for example, whether there should be a minimum
threshold of payer participation for a region, or at the level of an
individual practice, in order for a payer to be eligible for
participation in a potential expansion of the CPC initiative. We also
seek input about the best methods for payers to engage with one
another, participating practices, and CMS under a potential expansion.
Medicaid: The CPC initiative is a multi-payer initiative
that seeks to include as many payers as possible to provide practices
with sufficient resources for a practice-level transformation that
benefits their entire patient population. A number of state Medicaid
agencies currently participate as payers in the CPC initiative for
their fee-for-service enrollees. We are interested in whether state
Medicaid agencies would be willing to participate in a potential
expanded CPC initiative for their fee-for-service enrollees. We are
also interested in whether Medicaid managed care plans would be willing
to participate in a potential expanded CPC initiative.
Quality reporting: We are interested in comment on
practice readiness to report eCQMs, and payer interest in using
practice site level data rather than their own enrollees' information
for performance based payments, including shared savings, in a
potential expansion of the CPC initiative.
Interaction with the CCM fee: The CY 2015 PFS final rule
with comment period (79 FR 67729) discussed the policy for the billing
of CCM services when a practitioner is participating in the CPC
initiative, as described earlier in this proposed rule. We seek input
on how payment for CCM services might interact with a potential
expansion of the CPC initiative and affect practice interest in
participation.
Provision of data feedback to practices: We currently send
quarterly feedback reports to practices including cost and utilization
information for the Medicare FFS attributed population of that
practice. We seek comment about how we can best provide actionable data
to support quality improvement and promote attention to total cost of
care under a potential expansion.

L. Medicare Shared Savings Program

Under section 1899 of the Act, we established the Medicare Shared
Savings Program (Shared Savings Program) to facilitate coordination and
cooperation among providers to improve the quality of care for Medicare
Fee-For-Service (FFS) beneficiaries and reduce the rate of growth in
health care costs. Eligible groups of providers and suppliers,
including physicians, hospitals, and other health care providers, may
participate in the Shared Savings Program by forming or participating
in an Accountable Care Organization (ACO). The final rule establishing
the Shared Savings Program appeared in the November 2, 2011 Federal
Register (Medicare Shared Savings Program: Accountable Care
Organizations Final Rule (76 FR 67802)).
We identified the following policies under the Shared Savings
Program that we are addressing in this proposed rule.
1. Quality Measures and Performance Standard
Section 1899(b)(3)(A) of the Act requires the Secretary to
determine appropriate measures to assess the quality of care furnished
by ACOs, such as measures of clinical processes and outcomes; patient,
and, wherever practicable, caregiver experience of care; and
utilization such as rates of hospital admission for ambulatory
sensitive conditions. Section 1899(b)(3)(B) of the Act requires ACOs to
submit data in a form and manner specified by the Secretary on measures
that the Secretary determines necessary for ACOs to report to evaluate
the quality of care furnished by ACOs. Section 1899(b)(3)(C) of the Act
requires the Secretary to establish quality performance standards to
assess the quality of care furnished by ACOs, and to seek to improve
the quality of care furnished by ACOs over time by specifying higher
standards, new measures, or both for the purposes of assessing the
quality of care. Additionally, section 1899(b)(3)(D) of the Act gives
the Secretary authority to incorporate reporting requirements and
incentive payments related to the PQRS, EHR Incentive Program and other
similar initiatives under section 1848 of the Act. Finally, section
1899(d)(1)(A) of the Act states that an ACO is eligible to receive
payment for shared savings, if they are generated, only after meeting
the quality performance standards established by the Secretary.
In the November 2011 final rule establishing the Shared Savings
Program and recent CY PFS final rules with comment period (77 FR 69301
through 69304; 78 FR 74757 through 74764; and 79 FR 67907 through
67931), we established the quality performance standards that ACOs must
meet to be eligible to share in savings that are generated. In the CY
2015 PFS final rule with comment period, we made a number of updates to
the quality requirements within the program, such as updates to the
quality measure set, the addition of a quality improvement reward, and
the establishment of benchmarks that will apply for 2 years. Through
these previous rulemakings, we worked to improve the alignment of
quality performance measures, submission methods, and incentives under
the Shared Savings Program and PQRS. Currently, eligible professionals
participating in an ACO may qualify for the PQRS incentive payment
under the

[[Page 41885]]

Shared Savings Program or avoid the downward PQRS payment adjustment
when the ACO satisfactorily reports the ACO GPRO measures on their
behalf using the GPRO web interface.
We identified a few policies related to the quality measures and
quality performance standard that we are proposing in this rule.
Specifically, we are proposing to add a new quality measure to be
reported through the CMS web interface and to adopt a policy for
addressing quality measures that no longer align with updated clinical
guidelines or where the application of the measure may result in
patient harm.
a. Existing Quality Measures and Performance Standard
Section 1899(b)(3)(C) of the Act states that the Secretary shall
establish quality performance standards to assess the quality of care
furnished by ACOs and ``seek to improve the quality of care furnished
by ACOs over time by specifying higher standards, new measures, or both
. . . .'' In the November 2011 Shared Savings Program Final Rule, we
established a quality performance standard consisting of 33 measures
across four domains, including patient experience of care, care
coordination/patient safety, preventive health, and at-risk population.
In the CY 2015 PFS final rule with comment period, we made a number of
updates to the quality performance standard, including adding new
measures that ACOs must report, retiring measures that no longer
aligned with updated clinical guidelines, reducing the sample size for
measures reported through the CMS web interface, establishing a
schedule for the phase in of new quality measures, and establishing an
additional reward for quality improvement. In the CY 2015 PFS final
rule with comment period, we finalized an updated measure set of 33
measures.
Quality measures are submitted by the ACO through the GPRO web
interface, calculated by CMS from administrative and claims data, and
collected via a patient experience of care survey based on the
Clinician and Group Consumer Assessment of Healthcare Providers and
Systems (CG-CAHPS) survey. The CAHPS for ACOs patient experience of
care survey used for the Shared Savings Program includes the core CG-
CAHPS modules, as well as some additional modules. The measures
collected through the GPRO web interface are also used to determine
whether eligible professionals participating in an ACO avoid the PQRS
and automatic Value Modifier payment adjustments for 2015 and
subsequent years. Eligible professionals in an ACO may avoid the
downward PQRS payment adjustment when the ACO satisfactorily reports
all of the ACO GPRO measures on their behalf using the GPRO web
interface. Beginning with the 2017 Value Modifier, performance on the
ACO GPRO web interface measures and all cause readmission measure will
be used in calculating the quality component of the Value Modifier for
eligible professionals participating within an ACO (79 FR 67941 through
67947).
As we previously stated (76 FR 67872), our principal goal in
selecting quality measures for ACOs has been to identify measures of
success in the delivery of high-quality health care at the individual
and population levels with a focus on outcomes. We believe endorsed
measures have been tested, validated, and clinically accepted, and
therefore, when selecting the original 33 measures, we had a preference
for NQF-endorsed measures. However, the statute does not limit us to
using endorsed measures in the Shared Savings Program. As a result, we
also exercised our discretion to include certain measures that we
believe to be high impact but that are not currently endorsed,
including for example, ACO#11, Percent of PCPs Who Successfully Qualify
for an EHR Incentive Program Payment.
In selecting the 33 measure set, we balanced a wide variety of
important considerations. Our measure selection emphasized prevention
and management of chronic diseases that have a high impact on Medicare
FFS beneficiaries, such as heart disease, diabetes mellitus, and
chronic obstructive pulmonary disease. We believed that the quality
measures used in the Shared Savings Program should be tested, evidence-
based, target conditions of high cost and high prevalence in the
Medicare FFS population, reflect priorities of the National Quality
Strategy, address the continuum of care to reflect the requirement that
ACOs accept accountability for their patient populations, and align
with existing quality programs and value-based purchasing initiatives.
In selecting the set of 33 measures finalized in the CY 2015 PFS
final rule with comment period, we sought to include both process and
outcome measures, including patient experience of care (79 FR 67907
through 67931). We believe it is important to retain a combination of
both process and outcomes measures, because ACOs are charged with
improving and coordinating care and delivering high quality care, but
also need time to form, acquire infrastructure and develop clinical
care processes. We noted, however, that as other CMS quality reporting
programs, such as PQRS, move to more outcomes-based measures and fewer
process measures over time, we might also revise the quality
performance standard for the Shared Savings Program to incorporate more
outcomes-based measures and fewer process measures over time.
In the CY 2015 PFS final rule with comment period, we finalized a
number of changes to the quality measures used in establishing the
quality performance standard to better align with PQRS, retire measures
that no longer align with updated clinical practice, and add new
outcome measures that support the CMS Quality Strategy and National
Quality Strategy goals. We are continuing to work with the measures
community to ensure that the specifications for the measures used under
the Shared Savings Program are up-to-date. We believe that it is
important to balance the timing of the release of specifications so
they are as up-to-date as possible, while also giving ACOs sufficient
time to review specifications. Our intention is to issue the
specifications annually, prior to the start of the reporting period for
which they will apply.
b. Proposed New Measure To Be Used in Establishing Quality Standards
That ACOs Must Meet To Be Eligible for Shared Savings
Since the November 2011 Shared Savings Program final rule, we have
continued to review the quality measures used for the Shared Savings
Program to ensure that they are up to date with current clinical
practice and are aligned with the GPRO web interface reporting for
PQRS. Based on these reviews, in the CY 2015 PFS final rule with
comment period, we retired several measures that no longer aligned with
updated clinical guidelines regarding cholesterol targets. As a result
of retiring measures that did not align with updated clinical practice,
we identified a gap in the Shared Savings Program measure set for
measures that address treatment for patients at high risk of
cardiovascular disease due to high cholesterol. Cardiovascular disease
affects a high volume of Medicare beneficiaries and the prevention of
cardiovascular disease as well as its treatment is important. Following
further analysis and coordination with agencies such as the Centers for
Disease Control and Prevention and the Agency for Healthcare Research &
Quality, we are proposing to add a new statin therapy measure for the
Shared Savings

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Program that has been developed to align with the updated clinical
guidelines and PQRS reporting. We are proposing to add one new measure
to the Preventive Health domain, which would increase our current total
number of measures from 33 to 34 measures. Data collection for the new
measure would occur through the CMS web interface. Table 31 lists the
Shared Savings Program quality measure set, including the one measure
we are proposing to add, that would be used to assess ACO quality
starting in 2016.

Statin Therapy for the Prevention and Treatment of
Cardiovascular Disease

We propose to add the Statin Therapy for the Prevention and
Treatment of Cardiovascular Disease to the Preventive Health domain.
The measure was developed by CMS in collaboration with other federal
agencies and the Million Hearts^[reg] Initiative and is
intended to support the prevention and treatment of cardiovascular
disease by measuring the use of statin therapies according to the
updated clinical guidelines for patients with high cholesterol. The
measure reports the percentage of beneficiaries who were prescribed or
were already on statin medication therapy during the measurement year
and who fall into any of the following three categories:
1. High-risk adult patients aged greater than or equal to 21 years
who were previously diagnosed with or currently have an active
diagnosis of clinical atherosclerotic cardiovascular disease (ASCVD);
2. Adult patients aged greater than or equal to 21 years with any
fasting or direct Low-Density Lipoprotein Cholesterol (LDL-C) level
that is greater than or equal to 190 mg/dL; or
3. Patients aged 40 to 75 years with a diagnosis of diabetes with a
fasting or direct LDL-C level of 70 to 189 mg/dL who were prescribed or
were already on statin medication therapy during the measurement year.
The measure contains multiple denominators to align with the
updated clinical guidelines for cholesterol targets and would replace
the low-density lipid control measures previously retired from the
measure set. We are proposing this measure to continue Shared Savings
Program alignment with the PQRS program (Table 30) and Million Hearts
Initiative. We propose that the multiple denominators will be equally
weighted when calculating the performance rate. The measure was
reviewed by the NQF Measure Applications Partnership (MAP) and the MAP
encouraged further development (Measures Under Consideration (MUC) ID:
X3729).
As a result, we are seeking public comment on the implementation of
the measure for the Shared Savings Program. We are seeking comment on
whether the measure should be considered a single measure with weighted
denominators or three measures given the multiple denominators were
developed to adhere to the updated clinical guidelines. In addition,
the use of multiple denominators raises questions on how the measure
should be benchmarked for the Shared Savings Program. Therefore, we are
seeking public feedback on the benchmarking approach for the measure,
such as whether the measure should be benchmarked as a single measure
or three measures. The measure specifications that were submitted to
the NQF MAP include multiple denominators, which may require larger
sample sizes to accommodate exclusions when identifying relevant
beneficiaries for each of the denominators used for CMS web interface
reporting. Due to the multiple denominators, there may be a large
number of beneficiaries who may not meet each denominator for reporting
and would result in a low number of beneficiaries meeting the measure
denominators. Hence, we are proposing to increase the size of the
oversample for this measure from the normal 616 beneficiaries for CMS
web interface reporting to an oversample of 750 or more beneficiaries.
We are proposing such an oversample size for this measure to account
for reporting on the multiple denominators and to ensure a sufficient
number of beneficiaries meet the measure denominators for reporting.
The consecutive reporting requirement for measures reported through the
CMS web interface would remain at 248 beneficiaries. We are proposing
that the measure will be pay for reporting for 2 years and then phase
into pay for performance in the third year of the agreement period, as
seen in Table 31. Previously, we finalized that new measures will have
a 2-year transition period before being phased in as pay for
performance (79 FR 67910). However, we are also seeking comment on
whether stakeholders believe the measure should be pay for reporting
for the entire agreement period due to the application of multiple
denominators for a single measure. In summary, we seek comment on our
proposal to include this measure in the Preventive Health domain,
whether it should be treated as a single or multiple measures for
reporting and benchmarking, the transition of the measure into pay for
performance or if they measure should remain pay for reporting for the
entire agreement period, and the size of the oversample to ensure
sufficient identification of beneficiaries for reporting.

Table 31--Measures for Use in Establishing Quality Performance Standards That ACOS Must Meet for Shared Savings
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pay for performance phase-in R--
ACO Measure New NQF #/measure Method of data Reporting P--Performance
Domain No. Measure title measure steward submission --------------------------------
PY1 PY2 PY3
--------------------------------------------------------------------------------------------------------------------------------------------------------
AIM: Better Care for Individuals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Patient/....................... ACO-1....... CAHPS: Getting Timely .......... NQF #0005, AHRQ.. Survey........... R P P
Caregiver...................... Care, Appointments,
Experience..................... and Information.
ACO-2....... CAHPS: How Well Your .......... NQF #0005, AHRQ.. Survey........... R P P
Doctors Communicate.
ACO-3....... CAHPS: Patients' .......... NQF #0005, AHRQ.. Survey........... R P P
Rating of Doctor.
ACO-4....... CAHPS: Access to .......... NQF #N/A, CMS/ Survey........... R P P
Specialists. AHRQ.
ACO-5....... CAHPS: Health .......... NQF #N/A, CMS/ Survey........... R P P
Promotion and AHRQ.
Education.

[[Page 41887]]

ACO-6....... CAHPS: Shared Decision .......... NQF #N/A, CMS/ Survey........... R P P
Making. AHRQ.
ACO-7....... CAHPS: Health Status/ .......... NQF #N/A, CMS/ Survey........... R R R
Functional Status. AHRQ.
ACO-34...... CAHPS: Stewardship of .......... NQF #N/A, CMS/ Survey........... R P P
Patient Resources. AHRQ.
Care Coordination/Safety....... ACO-8....... Risk-Standardized, All .......... Adapted NQF Claims........... R R P
Condition Readmission. #1789, CMS.
ACO-35...... Skilled Nursing .......... NQF #TBD, CMS.... Claims........... R R P
Facility 30-Day All-
Cause Readmission
Measure (SNFRM).
ACO-36...... All-Cause Unplanned .......... NQF#TBD, CMS..... Claims........... R R P
Admissions for
Patients with
Diabetes.
ACO-37...... All-Cause Unplanned .......... NQF#TBD, CMS..... Claims........... R R P
Admissions for
Patients with Heart
Failure.
ACO-38...... All-Cause Unplanned .......... NQF#TBD, CMS..... Claims........... R R P
Admissions for
Patients with
Multiple Chronic
Conditions.
ACO-9....... Ambulatory Sensitive .......... Adapted NQF Claims........... R P P
Conditions #0275, AHRQ.
Admissions: Chronic
Obstructive Pulmonary
Disease or Asthma in
Older Adults (AHRQ
Prevention Quality
Indicator (PQI) #5).
ACO-10...... Ambulatory Sensitive .......... Adapted NQF Claims........... R P P
Conditions #0277, AHRQ.
Admissions: Heart
Failure (AHRQ
Prevention Quality
Indicator (PQI) #8 ).
ACO-11...... Percent of PCPs who .......... NQF #N/A, CMS.... EHR Incentive R P P
Successfully Meet Program
Meaningful Use Reporting.
Requirements.
ACO-39...... Documentation of .......... NQF #0419, CMS... CMS Web Interface R P P
Current Medications
in the Medical Record.
ACO-13...... Falls: Screening for .......... NQF #0101, NCQA.. CMS Web Interface R P P
Future Fall Risk.
--------------------------------------------------------------------------------------------------------------------------------------------------------
AIM: Better Health for Populations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Preventive Health.............. ACO-14...... Preventive Care and .......... NQF #0041, AMA- CMS Web Interface R P P
Screening: Influenza PCPI.
Immunization.
ACO-15...... Pneumonia Vaccination .......... NQF #0043, NCQA.. CMS Web Interface R P P
Status for Older
Adults.
ACO-16...... Preventive Care and .......... NQF #0421, CMS... CMS Web Interface R P P
Screening: Body Mass
Index (BMI) Screening
and Follow Up.
ACO-17...... Preventive Care and .......... NQF #0028, AMA- CMS Web Interface R P P
Screening: Tobacco PCPI.
Use: Screening and
Cessation
Intervention.
ACO-18...... Preventive Care and .......... NQF #0418, CMS... CMS Web Interface R P P
Screening: Screening
for Clinical
Depression and Follow-
up Plan.
ACO-19...... Colorectal Cancer .......... NQF #0034, NCQA.. CMS Web Interface R R P
Screening.
ACO-20...... Breast Cancer .......... NQF #NA, NCQA.... CMS Web Interface R R P
Screening.
ACO-21...... Preventive Care and .......... CMS.............. CMS Web Interface R R P
Screening: Screening
for High Blood
Pressure and Follow-
up Documented.
ACO-42...... Statin Therapy for the X NQF #TBD, MUC ID: CMS Web Interface R R P
Prevention and X3729, CMS.
Treatment of
Cardiovascular
Disease.

[[Page 41888]]

Clinical Care for At Risk ACO-40...... Depression Remission .......... NQF #0710, MNCM.. CMS Web Interface R R R
Population--Depression. at Twelve Months.
Clinical Care for At Risk ACO-27...... Diabetes Composite .......... NQF #0059, NCQA CMS Web Interface R P P
Population--Diabetes. (All or Nothing (individual
Scoring): ACO-27: component).
Diabetes Mellitus:
Hemoglobin A1c Poor
Control.
ACO-41...... ACO-41: Diabetes: Eye .......... NQF #0055, NCQA CMS Web Interface R P P
Exam. (individual
component).
Clinical Care for At Risk ACO-28...... Hypertension (HTN): .......... NQF #0018, NCQA.. CMS Web Interface R P P
Population--Hypertension. Controlling High
Blood Pressure.
Clinical Care for At Risk ACO-30...... Ischemic Vascular .......... NQF #0068, NCQA.. CMS Web Interface R P P
Population--Ischemic Vascular Disease (IVD): Use of
Disease. Aspirin or Another
Antithrombotic.
Clinical Care for At Risk ACO-31...... Heart Failure (HF): .......... NQF #0083, AMA- CMS Web Interface R R P
Population --Heart Failure. Beta-Blocker Therapy PCPI.
for Left Ventricular
Systolic Dysfunction
(LVSD).
Clinical Care for At Risk ACO-33...... Angiotensin-Converting .......... NQF # 0066, ACC.. CMS Web Interface R R P
Population--Coronary Artery Enzyme (ACE)
Disease. Inhibitor or
Angiotensin Receptor
Blocker (ARB)
Therapy--for patients
with CAD and Diabetes
or Left Ventricular
Systolic Dysfunction
(LVEF<40%).
--------------------------------------------------------------------------------------------------------------------------------------------------------

The quality scoring methodology is explained in the regulations at
Sec. 425.502 and in the preamble to the November 2011 final rule with
comment period (76 FR 67895 through 67900). As a result of this
proposed addition, each of the four domains will include the following
number of quality measures (See Table 32 for details.):

Patient/Caregiver Experience of Care--8 measures
Care Coordination/Patient Safety--10 measures
Preventive Health--9 measures
At Risk Population--7 measures (including 6 individual
measures and a 2-component diabetes composite measure)
Table 32 provides a summary of the number of measures by domain and
the total points and domain weights that will be used for scoring
purposes with the proposed additional measure in the At-Risk Population
domain. The total possible points for the Preventive Health domain
would increase from 16 points to 18 points. Otherwise, the current
methodology for calculating an ACO's overall quality performance score
would continue to apply. We are also seeking comment on whether the
proposed Statin Therapy measure, with multiple denominators, should be
scored at more than 2 points if commenters believe this measure should
be treated as multiple measures within the Preventive Health domain
instead of a single measure. For instance, the measure could be scored
as 3 points, 1 point for each of the three denominators, due to the
clinical importance of prevention and treatment of cardiovascular
disease and the complexity of the measure. The EHR measure is currently
the only measure scored more than 2 points in the current measure set,
but given the multiple denominators that exist within the Statin
Therapy measure, it could be scored greater than 2 points as well.

Table 32--Number of Measures and Total Points for Each Domain Within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
Number of Total Domain
Domain individual Total measures for scoring possible weight
measures purposes points (%)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience................ 8 8 individual survey module 16 25
measures.
Care Coordination/Patient Safety............ 10 10 measures. Note that the EHR 22 25
measure is double-weighted (4
points).
Preventive Health........................... 9 9 measures.................... 18 25

[[Page 41889]]

At-Risk Population.......................... 7 6 individual measures, plus a 12 25
2-component diabetes
composite measure, scored as
one.
-------------------------------------------------------------------
Total in all Domains.................... 34 33............................ 68 100
----------------------------------------------------------------------------------------------------------------

We believe that the proposed addition of the Statin Therapy quality
measure to the quality measure set for the Shared Savings Program would
further enhance the quality of care patients receive from ACO
participants and ACO providers/suppliers, better reflect clinical
practice guidelines and high quality care, enhance alignment with PQRS
and the Million Hearts [supreg] Initiative, and focus on important
preventive care and effective treatments for high prevalence
conditions.
c. Proposed Policy for Measures No Longer Aligning With Clinical
Guidelines, High Quality Care or Outdated Measure May Cause Patient
Harm
We have encountered circumstances where changes in clinical
guidelines result in quality measures within the Shared Savings Program
quality measure set no longer aligning with best clinical practice. For
instance, in the CY 2015 PFS final rule with comment period we retired
measures that were no longer consistent with updated clinical
guidelines for cholesterol targets, but we were unable to finalize
retirement of the measures for the 2014 reporting year due to the
timing of the guideline updates and rulemaking cycle. We issued an
update in the 2014 Shared Savings Program benchmark guidance document
that maintained these measures as pay-for-reporting for the 2014
reporting year due to the measures not aligning with updated clinical
evidence.
However, given the frequency of changes that occur in scientific
evidence and clinical practice, we are proposing to adopt a general
policy under which we will maintain measures as pay-for-reporting, or
revert pay-for-performance measures to pay-for-reporting measures, if
the measure owner determines the measure no longer meets best clinical
practices due to clinical guideline updates or when clinical evidence
suggests that continued measure compliance and collection of the data
may result in harm to patients. This flexibility will enable us to
respond more quickly to clinical guideline updates that affect measures
without waiting until a future rulemaking cycle to retire a measure or
revert to pay for reporting. We expect that we will continue to retire
measures through the annual PFS final rule with comment period as
clinical guidelines change; however, the timing of clinical guideline
updates may not always correspond with the rulemaking cycle. Under this
proposal, if a guideline update is published during a reporting year
and the measure owner determines the measure specifications do not
align with the updated clinical practice, we would have the authority
to maintain a measure as pay for reporting or revert a pay-for-
performance measure to pay for reporting and finalize changes in the
subsequent PFS final rule with comment period. Therefore, we are
proposing to add a new provision at Sec. 425.502(a)(5) to reserve the
right to maintain a measure as pay for reporting, or revert a pay-for-
performance measure to pay for reporting, if a measure owner determines
the measure no longer meets best clinical practices due to clinical
guideline updates or clinical evidence suggests that continued
application of the measure may result in harm to patients. The measure
owner will inform CMS if a measure's specification does not align with
updated guidelines or if continued application of the measure may
result in patient harm. We would then implement any necessary change to
the measure in the next PFS rulemaking cycle by either retiring the
measure or maintaining it as pay for reporting. We seek comment on this
proposal and whether there may be additional criteria we should
consider in deciding when it may be appropriate to maintain a measure
as pay-for-reporting or revert from pay-for-performance back to pay-
for-reporting.
d. Request for Comment Related to Use of Health Information Technology
In the November 2011 final rule, we included a measure related to
the use of health information technology under the Care Coordination/
Patient Safety domain: the percent of PCPs within an ACO who
successfully qualify for an EHR Incentive Program incentive (76 FR
67878). In finalizing this measure, we included eligible professionals
that qualified for payments to adopt, implement, or upgrade EHR
technology, in addition to those receiving a payment for meeting
Meaningful use Requirements. We selected this measure as opposed to
other proposed measures in order to focus on EHR adoption among the
primary care physicians within an ACO. Finally, we chose to focus on
this measure because it represented a structural measure of EHR program
participation that is not duplicative of measures within the EHR
Incentive program for which providers may already qualify for incentive
payments or face penalties. Although this was the only measure we
finalized related to use of health information technology, we chose to
double weight this measure for scoring purposes in order to signal the
importance of health information technology for ACOs (76 FR 67895).
In the CY 2015 PFS final rule with comment period, we finalized a
proposal to change the name and specification of this measure to
``Percent of PCPs who Successfully Meet Meaningful Use Requirements''
in order to reflect the transition from incentive payments to downward
payment adjustments in 2015 (79 FR 67912). We believe this name will
more accurately depict successful use and adoption of EHR technology.
We continue to believe that measures which encourage the effective
adoption and use of health information technology among participants in
accountable care initiatives are an important way to signal the
importance of technology infrastructure in supporting successful ACOs,
especially as they mature and assume additional risk. Since the initial
EHR quality measure was finalized in 2011, the EHR Incentive Program
and Meaningful Use requirements have shifted from an initial focus on
technology adoption and data capture to interoperable exchange of data
across systems and the use of more advanced health IT functions to
support care coordination and quality

[[Page 41890]]

improvement. A notice of proposed rulemaking for ``Stage 3'' of the EHR
Incentive program, was released in March 2015 (80 FR 16731), along with
a related proposed 2015 Edition of ONC certification criteria (80 FR
16804), which aim to support providers' ability to exchange a common
clinical dataset across the continuum of care. In addition, ONC has
released a document entitled ``Connecting Health and Care for the
Nation: A Shared Nationwide Interoperability Roadmap (available at
http://www.healthit.gov/sites/default/files/nationwide-interoperability-roadmap-draft-version-1.0.pdf) which focuses on
actions that will enable a majority of individuals and providers across
the care continuum to send, receive, find and use a common set of
electronic clinical information at the nationwide level by the end of
2017.
We believe that the widespread inclusion of these capabilities
within health IT systems, and their adoption and effective use by
providers, will greatly enhance ACOs' ability to coordinate care for
beneficiaries with practitioners both within and outside their ACO and
more effectively manage the total cost of care for attributed patients.
While we are not proposing any changes to the current measure ``Percent
of PCPs who Successfully Meet Meaningful Use Requirements'' (ACO-11) at
this time, we are seeking comment on how this measure might evolve in
the future to ensure we are incentivizing and rewarding providers for
continuing to adopt and use more advanced health IT functionality as
described above, and broadening the set of providers across the care
continuum that have adopted these tools. We welcome comments on the
following questions:
Although the current measure focuses only on primary care
physicians, should this measure be expanded in the future to include
all eligible professionals, including specialists?
How could the current measure be updated to reward
providers who have achieved higher levels of health IT adoption?
Should we substitute or add another measure that would
focus specifically on the use of health information technology, rather
than meeting overall Meaningful Use requirements, for instance, the
transitions of care measure required for the EHR Incentives Program?
What other measures of IT-enabled processes would be most
relevant to participants within ACOs? How could we seek to minimize the
administrative burden on providers in collecting these measures?
e. Conforming Changes To Align With PQRS
Under the Shared Savings Program rules at Sec. 425.504, ACOs, on
behalf of their ACO providers/suppliers who are eligible professionals,
must submit quality measures using a CMS web interface (currently the
CMS Group Practice Reporting Option Web Interface) to satisfactorily
report on behalf of their eligible professionals for purposes of the
PQRS payment adjustment under the Shared Savings Program. Under Sec.
425.118(a)(4), all Medicare enrolled individuals and entities that have
reassigned their right to receive Medicare payment to the TIN of the
ACO participant must be included on the ACO provider/supplier list and
must agree to participate in the ACO and comply with the requirements
of the Shared Savings Program, including the quality reporting
requirements. Thus, each eligible professional that bills under the TIN
of an ACO participant must be included on the ACO provider/supplier
list in accordance with the requirements in Sec. 425.118.
The methodology for applying the PQRS adjustment to group practices
takes into account the services billed by all eligible professionals
through the TIN of the group practice, however, the references to ``ACO
providers/suppliers who are eligible professionals'' in Sec. 425.504
indicate that the ACO provider/supplier list should be used to
determine the eligible professionals. Our intent and current practice
is to treat the ACO and its ACO participants the same as any other
physician group electing to report for purposes of PQRS through the
GPRO Web Interface. We therefore have determined that it is necessary
to modify the language in Sec. 425.504 for clarity and to bring it
into alignment with the methodology used to determine the applicability
of the payment adjustment under the PQRS GPRO methodology so that it is
consistently applied to eligible professionals billing through an ACO
participant TIN. We propose to revise Sec. 425.504(a) to replace the
phrase ``ACO providers/suppliers who are eligible professionals'' and
``ACO providers/suppliers that are eligible professionals'' with the
phrase ``eligible professionals who bill under the TIN of an ACO
participant'' along with conforming changes anywhere the term ACO
providers/suppliers appears in Sec. 425.504. We believe these changes
are necessary to clarify that the requirement that the ACO report on
behalf of these eligible professionals applies in a way that is
consistent with the PQRS GPRO policies and also addresses mid-year
updates to and deletions from the ACO provider/supplier list. For
example, this change clarifies that an ACO must still report quality
data for services billed under the TIN of an ACO participant by an
eligible professional that was an ACO provider/supplier for a portion
of the performance year, but was removed from the ACO provider/supplier
list mid-year when he or she started a new job and ceased billing under
the TIN of the ACO participant.
2. Assignment of Beneficiaries to ACOs
Section 1899(c) of the Act requires the Secretary to ``determine an
appropriate method to assign Medicare fee-for-service beneficiaries to
an ACO based on their utilization of primary care services provided
under this title by an ACO professional described in paragraph
(h)(1)(A).'' As we have explained in detail elsewhere (79 FR 72792), we
established the current list of codes that constitute primary care
services under the Shared Savings Program at Sec. 425.20 because we
believed the listed codes represented a reasonable approximation of the
kinds of services that are described by the statutory language which
refers to assignment of ``Medicare fee for service beneficiaries to an
ACO based on their utilization of primary care services'' furnished by
physicians. We propose the following revisions to the assignment of
beneficiaries to ACOs under the Shared Savings Program.
a. Assignment of Beneficiaries Based on Certain Evaluation and
Management Services in SNFs
As discussed in detail in the November 2014 proposed rule for the
Shared Savings Program (79 FR 72792 through 72793), we welcomed comment
from stakeholders on the implications of retaining certain evaluation
and management codes used for physician services furnished in SNFs and
other nursing facility settings (CPT codes 99304 through 99318) in the
definition of primary care services. As we noted in the proposed rule,
in some cases, hospitalists that perform evaluation and management
services in SNFs have requested that these codes be excluded from the
definition of primary care services so that their ACO participant TIN
need not be exclusive to only one ACO based on the exclusivity policy
established in the November 2011 final rule (76 FR 67810 through
67811). The requirement under Sec. 425.306(b) that an ACO participant
TIN be exclusive to a single ACO applies when the ACO

[[Page 41891]]

participant TIN submits claims for primary care services that are
considered in the assignment process. However, ACO participant TINs
upon which beneficiary assignment is not dependent (that is, ACO
participant TINs that do not submit claims for primary care services
that are considered in the assignment process) are not required to be
exclusive to a single ACO.
In response to the discussion in the Shared Savings Program
proposed rule of our policy of including the codes for SNF visits, CPT
codes 99304 through 99318, in the definition of primary care services,
some commenters objected to inclusion of SNF visit codes, believing a
SNF is more of an extension of the inpatient setting rather than a
component of the community based primary care setting. As a result,
these commenters believe that ACOs are often inappropriately assigned
patients who have had long SNF stays but would not otherwise be aligned
to the ACO and with whom the ACO has no clinical contact after their
SNF stay. Some commenters draw a distinction between such services
provided in two different places of service, POS 31 (SNF) and POS 32
(NF). Although the same CPT visit codes are used to describe these
services in SNFs (POS 31) and NFs (POS 32), the patient population is
arguably quite different. These commenters suggest excluding SNF visit
codes furnished in POS 31 to potentially relieve hospitalists from the
requirement that these ACO professionals must be exclusive to a single
ACO if their services are considered in assignment. Patients in SNFs
(POS 31) are shorter stay patients who are receiving continued acute
medical care and rehabilitative services. While their care may be
coordinated during their time in the SNF, they are then transitioned
back in the community. Patients in a SNF (POS 31) require more frequent
practitioner visits--often from 1 to 3 times a week. In contrast,
patients in NFs (POS 32) are almost always permanent residents and
generally receive their primary care services in the facility for the
duration of their life. Patients in the NF (POS 32) are usually seen
every 30 to 60 days unless medical necessity dictates otherwise.
We agree that it would be feasible to use POS 31 to identify claims
for services furnished in a SNF. Therefore, we are proposing to amend
our definition of primary care services at Sec. 425.20, for purposes
of the Shared Savings Program, to exclude services billed under CPT
codes 99304 through 99318 when the claim includes the POS 31 modifier.
We recognize that SNF patients are shorter stay patients who are
generally receiving continued acute medical care and rehabilitative
services. While their care may be coordinated during their time in the
SNF, they are then transitioned back in the community to the primary
care professionals who are typically responsible for providing care to
meet their true primary needs. If we finalize this proposal, we
anticipate applying this revised definition of primary care services
for purposes of determining ACO eligibility during the application
cycle for the 2017 performance year, which occurs during 2016, and the
revision would be then be applicable for all ACOs starting with the
2017 performance year. This would align the assignment algorithms for
both new ACOs entering the program and existing ACOs ensuring that
beneficiaries are being assigned to the most appropriate ACO and that
assigned beneficiary populations are determined using consistent
assignment algorithms for all ACOs, as well as aligning our program
operations with the application cycle. We propose to make a conforming
change to the definition of primary care services in paragraph (2) by
indicating that the current definition will be in use for the 2016
performance year and to add a new definition of primary care services
in paragraph (4), which excludes SNFs from the definition of primary
care services effective starting with the 2017 performance year. We
believe that excluding services furnished in SNFs from the definition
of primary care services will complement our goal to assign
beneficiaries to an ACO based on their utilization of primary care
services. Further, based on preliminary analysis, we do not expect
removal of these claims from the assignment process would result in a
significant reduction in the number of beneficiaries assigned to ACOs,
although we recognize that assignment to some ACOs may be more affected
than others, depending on the practice patterns of their ACO
professionals. We invite comments on these issues.
b. Assignment of Beneficiaries to ACOs That Include ETA Hospitals
We have developed special operational instructions and processes
(79 FR 72801 through 72802) that enable us to include primary care
services performed by physicians at ETA hospitals in the assignment of
beneficiaries to ACOs under Sec. 425.402. ETA hospitals are hospitals
that, under section 1861(b)(7) of the Act and Sec. 415.160, have
voluntarily elected to receive payment on a reasonable cost basis for
the direct medical and surgical services of their physicians in lieu of
Medicare PFS payments that might otherwise be made for these services.
We use institutional claims submitted by ETA hospitals in the
assignment process under the Shared Savings Program because ETA
hospitals are paid for physician professional services on a reasonable
cost basis through their cost reports and no other claim is submitted
for such services. However, ETA hospitals bill us for their separate
facility services when physicians and other practitioners provide
services in the ETA hospital and the institutional claims submitted by
ETA hospitals include the HCPCS code for the services provided. To
determine the rendering physician for ETA institutional claims, we use
the NPI listed in the ``other provider'' NPI field on the institutional
claim. Then we use PECOS to obtain the CMS specialty for the NPI listed
on the ETA institutional claim.
These institutional claims do not include allowed charges, which
are necessary to determine where a beneficiary received the plurality
of primary care services as part of the assignment process.
Accordingly, we use the amount that would otherwise be payable under
the PFS for the applicable HCPCS code, in the applicable geographic
area as a proxy for the allowed charges for the service.
The definition of primary care services at Sec. 425.20 includes
CPT codes in the range 99201 through 99205 and 99211 through 99215, and
certain other codes. For services furnished prior to January 1, 2014,
we use the HCPCS code included on this institutional claim to identify
whether the primary care service was rendered to a beneficiary in the
same way as for any other claim. However, we implemented a change in
coding policy under the Outpatient Hospital Prospective Payment System
(OPPS) that inadvertently affects the assignment of beneficiaries to an
ACO when the beneficiary receives care at an ETA hospital. Effective
for services furnished on or after January 1, 2014, outpatient
hospitals, including ETA hospitals, were instructed to use the single
HCPCS code G0463 and to no longer use CPT codes in the ranges of 99201
through 99205 and 99211 through 99215. (For example, see our Web site
at http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/MM8572.pdf, page 3). In other words,
for ETA hospitals, G0463 is a replacement code for CPT codes in the
ranges of 99201 through 99205 and 99211 through 99215.

[[Page 41892]]

We continue to believe that it is appropriate to use ETA
institutional claims for purposes of identifying primary care services
furnished by physicians in ETA hospitals and to allow these services to
be included in the stepwise methodology for assigning beneficiaries to
ACOs. We believe including these claims increases the accuracy of the
assignment process by helping ensure that beneficiaries are assigned to
the ACO or other entity that is actually managing the beneficiary's
care. ETA hospitals are often located in underserved areas and serve as
providers of primary care for the beneficiaries they serve. Therefore,
we are proposing to consider HCPCS code G0463 when submitted by ETA
hospitals as a code designated by us as a primary care service for
purposes of the Shared Savings Program. We recently updated our
existing operational guidance on this issue so that we can continue to
consider services furnished in ETA hospitals for beneficiary assignment
purposes using the new G code until we codify a change to our
definition of primary care services. This approach will allow us to
continue to accurately assign Medicare FFS beneficiaries based on their
utilization of primary care services furnished by ACO professionals,
including those ACOs that may include ETA hospitals.
We would note that in order to promote flexibility for the Shared
Savings Program and to allow the definition of primary care services
used in the Shared Savings Program to respond more quickly to HCPCS/CPT
coding changes made in the annual PFS rulemaking process, we recently
adopted a policy of making revisions to the definition of primary care
service codes for the Shared Savings Program through the annual PFS
rulemaking process, and we amended the definition of primary care
services at Sec. 425.20 to include additional codes designated by CMS
as primary care services for purposes of the Shared Savings Program,
including new HCPCS/CPT codes or revenue codes and any subsequently
modified or replacement codes. Therefore, we propose to amend the
definition of primary care services at Sec. 425.20 by adding HCPCS
code G0463 for services furnished in an ETA hospital to the definition
of primary care services that will be applicable for performance year
2016 and subsequent performance years.
We also propose to revise Sec. 425.402 by adding a new paragraph
(d) to provide that when considering services furnished by physicians
in ETA hospitals in the assignment methodology, we would use an
estimated amount based on the amounts payable under the PFS for similar
services in the geographic location in which the ETA hospital is
located as a proxy for the amount of the allowed charges for the
service. In this case, because G0463 is not payable under the PFS, we
are proposing to use the weighted mean amount payable under the PFS for
CPT codes in the range 99201 through 99205 and 99211 through 99215 as a
proxy for the amount of the allowed charges for HCPCS code G0463 when
submitted by ETA hospitals. The weights needed to impute the weighted
mean PFS payment rate for HCPCS code G0463 would be derived from the
relative number of services furnished at the national level for CPT
codes 99201 through 99205 and 99211 through 99215. This is consistent
with our current practice and guidance and would continue to allow for
beneficiaries to be attributed to the ACO responsible for their care.
Additional details regarding computation of the proxy amount for G0463
would be provided through sub-regulatory guidance.
In addition, because we are able to consider claims submitted by
ETA hospitals as part of the assignment process, we also propose to
amend Sec. 425.102(a) to add ETA hospitals to the list of ACO
participants that are eligible to form an ACO that may apply to
participate in the Shared Savings Program.

M. Value-Based Payment Modifier and Physician Feedback Program

1. Overview
Section 1848(p) of the Act requires that we establish a value-based
payment modifier (VM) and apply it to specific physicians and groups of
physicians the Secretary determines appropriate starting January 1,
2015, and to all physicians and groups of physicians by January 1,
2017. On or after January 1, 2017, section 1848(p)(7) of the Act
provides the Secretary discretion to apply the VM to eligible
professionals (EPs) as defined in section 1848(k)(3)(B) of the Act.
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral.
The VM program continues CMS's initiative to increase the transparency
of health care quality information and to assist providers and
beneficiaries in improving medical decision-making and health care
delivery.\9\
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\9\ Kate Goodrich, et al. ``A History and a Vision for CMS
Quality Measurement Programs''. Joint Comm'n J. Quality & Patient
Safety. 2012. 38,465, available at http://www.ingentaconnect.com/content/jcaho/jcjqs/2012/00000038/00000010/art00006.
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2. Governing Principles for VM Implementation.
In the CY 2013 PFS final rule with comment period, we discussed the
goals of the VM and also established that specific principles should
govern the implementation of the VM (77 FR 69307). We refer readers to
that rule for a detailed discussion and list those principles here for
reference.
A focus on measurement and alignment. Measures for the VM
should consistently reflect differences in performance among groups or
solo practitioners, reflect the diversity of services furnished, and
should be consistent with the National and CMS Quality Strategies and
other CMS quality initiatives, including PQRS, the Medicare Shared
Savings Program (Shared Savings Program), and the Medicare EHR
Incentive Program.
A focus on physician and eligible professional choice.
Physicians and other nonphysician EPs should be able to choose the
level (individual or group) at which their quality performance will be
assessed, reflecting EPs' choice over their practice configurations.
The choice of level should align with the requirements of other
physician quality reporting programs.
A focus on shared accountability. The VM can facilitate
shared accountability by assessing performance at the group level and
by focusing on the total costs of care, not just the costs of care
furnished by an individual professional.
A focus on actionable information. The Quality and
Resource Use Reports (QRURs) should provide meaningful and actionable
information to help groups and solo practitioners identify clinical,
efficiency and effectiveness areas where they are doing well, as well
as areas in which performance could be improved by providing groups and
solo practitioners with QRURs on the quality and cost of care they
furnish to their patients.
A focus on a gradual implementation. The VM should focus
initially on identifying high and low performing groups and solo
practitioners. As we gain more experience with physician measurement
tools and methodologies, we can broaden the scope of measures assessed,
refine physician peer groups, create finer payment distinctions, and
provide greater payment incentives for high performance.

[[Page 41893]]

3. Overview of Existing Policies for the Physician VM.
In the CY 2013 PFS final rule with comment period (77 FR 69310), we
finalized policies to phase-in the VM by applying it beginning January
1, 2015, to Medicare PFS payments to physicians in groups of 100 or
more EPs. A summary of the existing policies that we finalized for the
CY 2015 VM can be found in the CY 2014 PFS proposed rule (78 FR 43486
through 43488). Subsequently, in the CY 2014 PFS final rule with
comment period (78 FR 74765 through 74787), we finalized policies to
continue the phase-in of the VM by applying it starting January 1,
2016, to payments under the Medicare PFS for physicians in groups of 10
or more EPs. Then, in the CY 2015 PFS final rule with comment period
(79 FR 67931 through 67966), we finalized policies to complete the
phase-in of the VM by applying it starting January 1, 2017, to payments
under the Medicare PFS for physicians in groups of 2 or more EPs and to
physician solo practitioners. We also finalized that beginning in
January 1, 2018, the VM will apply to nonphysician EPs in groups with 2
or more EPs and to nonphysician EPs who are solo practitioners.
4. Provisions of This Proposed Rule
As a general summary, we are proposing the following VM policies:
Beginning with the CY 2016 payment adjustment period, a
TIN's size would be determined based on the lower of the number of EPs
indicated by the Medicare Provider Enrollment, Chain, and Ownership
System (PECOS)-generated list or our analysis of the claims data for
purposes of determining the payment adjustment amount under the VM.
For the CY 2018 payment adjustment period, to apply the VM
to nonphysician EPs who are physician assistants (PAs), nurse
practitioners (NPs), clinical nurse specialists (CNSs), and certified
registered nurse anesthetists (CRNAs) in groups and those who are solo
practitioners, and not to other types of professionals who are
nonphysician EPs.
For the CY 2018 payment adjustment period, to identify
TINs as those that consist of nonphysician EPs if either the PECOS-
generated list or our analysis of the claims data shows that the TIN
consists of nonphysician EPs and no physicians.
For the CY 2018 payment adjustment period, to not apply
the VM to groups and solo practitioners if either the PECOS-generated
list or claims analysis shows that the groups and solo practitioners
consist only of nonphysician EPs who are not PAs, NPs, CNSs, and CRNAs.
To continue apply a two-category approach for the CY 2018
VM based on participation in the PQRS by groups and solo practitioners.
For the CY 2018 payment adjustment period, to apply the
quality-tiering methodology to all groups and solo practitioners in
Category 1. Groups and solo practitioners would be subject to upward,
neutral, or downward adjustments derived under the quality-tiering
methodology, with the exception finalized in the CY 2015 PFS final rule
with comments period (79 FR 67937), that groups consisting only of
nonphysician EPs and solo practitioners who are nonphysician EPs will
be held harmless from downward adjustments under the quality-tiering
methodology in CY 2018.
Beginning with the CY 2017 payment adjustment period, to
apply the VM adjustment percentage for groups and solo practitioners
that participate in two or more ACOs during the applicable performance
period based on the performance of the ACO with the highest quality
composite score.
For the CY 2018 payment adjustment period, to apply the VM
for groups and solo practitioners that participate in an ACO under the
Shared Savings Program during the applicable performance period as
described under Sec. 414.1210(b)(2), regardless of whether any EPs in
the group or the solo practitioner also participated in an Innovation
Center model during the performance period.
For the CY 2018 payment adjustment period, if the ACO does
not successfully report quality data as required by the Shared Savings
Program, all groups and solo practitioners participating in the ACO
will fall in Category 2 for the VM and will be subject to a downward
payment adjustment.
Beginning in the CY 2017 payment adjustment period, to
apply an additional upward payment adjustment of +1.0x to Shared
Savings ACO Program participant TINs that are classified as ``high
quality'' under the quality-tiering methodology, if the ACOs in which
the TINs participated during the performance period have an attributed
patient population that has an average beneficiary risk score that is
in the top 25 percent of all beneficiary risk scores nationwide as
determined under the VM methodology.
Beginning with the CY 2017 payment adjustment period, to
waive application of the VM for groups and solo practitioners, as
identified by TIN, if at least one EP who billed for PFS items and
services under the TIN during the applicable performance period for the
VM participated in the Pioneer ACO Model, CPC Initiative, or other
similar Innovation Center models during the performance period.
To set the maximum upward adjustment under the quality-
tiering methdology for the CY 2018 VM to +4.0 times an upward payment
adjustment factor (to be determined after the performance period has
ended) for groups with 10 or more EPs; +2.0 times an adjustment factor
for groups with between 2 to 9 EPs and physician solo practitioners;
and +2.0 times an adjustment factor for groups and solo practitioners
that consist of nonphysician EPs who are PAs, NPs, CNSs, and CRNAs.
To set the amount of payment at risk under the CY 2018 VM
to 4.0 percent for groups with 10 or more EPs, 2 percent for groups
with between 2 to 9 EPs and physician solo practitioners, and 2 percent
for groups and solo practitioners that consist of nonphysician EPs who
are PAs, NPs, CNSs, and CRNAs.
To not recalculate the VM upward payment adjustment factor
after it is made public unless there was a significant error made in
the calculation of the adjustment factor.
To use CY 2016 as the performance period for the CY 2018
VM.
To align the quality measures and quality reporting
mechanisms for the CY 2018 VM with those available to groups and
individuals under the PQRS during the CY 2016 performance period.
To separately benchmark the PQRS electronic clinical
quality measures (eCQMs) beginning with the CY 2018 VM.
To include Consumer Assessment of Healthcare Providers and
Systems (CAHPS) Surveys in the VM for Shared Savings Program ACOs
beginning with the CY 2018 VM.
To apply the VM to groups for which the PQRS program
removes individual EPs from that program's unsuccessful participants
list beginning with the 2016 VM.
Beginning with the CY 2017 payment adjustment period, to
increase the minimum number of episodes for inclusion of the MSPB
measure in the cost composite to 100 episodes.
Beginning with the 2018 VM, to include hospitalizations at
Maryland hospitals as an index admission for the MSPB measure for the
purposes of the VM program.
Beginning in the CY 2016 payment adjustment period, a
group or solo

[[Page 41894]]

practitioner subject to the VM would receive a quality composite score
that is classified as average under the quality-tiering methodology if
the group or solo practitioner does not have at least one quality
measure that meets the minimum number of cases required for the measure
to be included in the calculation of the quality composite.
To make technical changes to Sec. 414.1255 and Sec.
414.1235.
We also seek comment on, but make no proposals regarding
stratifying cost measure benchmarks by beneficiary risk score.
a. Group Size
The policies to identify groups and solo practitioners that are
subject to the VM during a specific payment adjustment period are
described in Sec. 414.1210(c). Beginning with the CY 2016 payment
adjustment period, the list of groups and solo practitioners subject to
the VM is based on a query of the PECOS that occurs within 10 days of
the close of the PQRS group registration process during the applicable
performance period described at Sec. 414.1215. Groups are removed from
the PECOS-generated list if, based on our analysis of claims, the group
did not have the required number of EPs that submitted claims during
the performance period for the applicable calendar year payment
adjustment period. Solo practitioners are removed from the PECOS-
generated list if, based on a claims analysis, the solo practitioner
did not submit claims during the performance period for the applicable
CY payment adjustment period. In the CY 2013 PFS final rule with
comment period, we stated that for the CY 2015 payment adjustment
period, we will not add groups to the PECOS-generated list based on the
analysis of claims (77 FR 69309 through 69310). In the CY 2014 PFS
final rule with comment period, we finalized that we will continue to
follow this procedure for the CY 2016 payment adjustment period and
subsequent adjustment period (78 FR 74767).
In the CY 2014 PFS final rule with comment period (78 FR 74767 to
74771), we established different payment adjustment amounts under the
2016 VM for (1) groups with between 10 to 99 EPs, and (2) groups with
100 or more EPs. Similarly, in the CY 2015 PFS final rule with comment
period (79 FR 67938 to 67941 and 67951 to 67954), we established
different payment adjustment amounts under the 2017 VM for: (1) Groups
with between 2 to 9 EPs and physician solo practitioners; and (2)
groups with 10 or more EPs. However, we have not addressed how we would
handle scenarios where the size of a TIN as indicated on the PECOS-
generated list is not consistent with the size of the TIN based on our
analysis of the claims data. Therefore, we propose that, beginning with
the CY 2016 payment adjustment period, the TIN's size would be
determined based on the lower of the number of EPs indicated by the
PECOS-generated list or by our analysis of the claims data for purposes
of determining the payment adjustment amount under the VM. In the event
that our analysis of the claims data indicates that a TIN had fewer EPs
during the performance period than indicated by the PECOS-generated
list, and the TIN is still subject to the VM based on its size, then we
would apply the payment adjustment amount under the VM that is
applicable to the size of the TIN as indicated by our analysis of the
claims data. In the event that our analysis of the claims data
indicates that a TIN had more EPs during the performance period than
indicated by the PECOS-generated list, then we would apply the payment
adjustment amount under the VM that is applicable to the size of the
TIN as indicated by the PECOS-generated list.
For example, for the CY 2016 payment adjustment period, if the
PECOS list indicates that a TIN had 100 EPs in the CY 2014 performance
period, but our analysis of claims shows that the TIN had 90 EPs based
in CY 2014, then we would apply the payment policies to the TIN that
are applicable to groups with between 10 to 99 EPs, instead of the
policies applicable to groups with 100 or more EPs. Alternatively, if
the PECOS list indicates that a TIN had 90 EPs in the CY 2014
performance period, but our analysis of claims shows that the TIN had
100 EPs based in CY 2014, then we would apply the payment policies to
the TIN that are applicable to groups with between 10 to 99 EPs,
instead of the policies applicable to groups with 100 or more EPs. We
propose to update Sec. 414.1210(c) accordingly.
In section III.M.4.b. of this proposed rule, we propose to apply
the VM in the CY 2018 payment adjustment period to nonphysician EPs who
are PAs, NPs, CNSs, and CRNAs in groups with two or more EPs and to
those who are solo practitioners. In section III.M.4.f. of this
proposed rule, we propose to apply different payment adjustment amounts
under the CY 2018 VM based on the composition of a group. Specifically,
in that section we propose that the PAs, NPs, CNSs, and CRNAs in groups
that consist of nonphysician EPs (in other words, groups that do not
include any physicians) and those who are solo practitioners would be
subject to different payment adjustment amounts under the CY 2018 VM
than would groups composed of physicians and nonphysician EPs and
physician solo practitioners. We propose to identify TINs that consist
of nonphysician EPs as those TINs for which either the PECOS-generated
list or our analysis of the claims data shows that the TIN consists of
nonphysician EPs and no physicians. We note that under our proposal the
VM would only apply to the PAs, NPs, CNSs, and CRNAs who bill under
these TINs, and not to the other types of nonphysician EPs who may also
bill under these TINs. We propose that the VM would not apply to a TIN
if either the PECOS-generated list or our analysis of the claims data
shows that the TIN consists of only nonphysician EPs who are not PAs,
NPs, CNSs, and CRNAs. The following examples illustrate these
proposals. If the PECOS-generated list shows that a TIN consists of
physicians and NPs and the claims data show that only NPs billed under
the TIN, then we would apply the payment adjustments proposed in
section III.M.4.f. of this proposed rule that are applicable to PAs,
NPs, CNSs, and CRNAs in TINs that consist of nonphysician EPs. If the
PECOS-generated list shows that a TIN consists of PAs, NPs, CNSs, or
CRNAs, and no physicians, and the claims data show that the TIN also
consists of physicians, then we would apply the payment adjustments
applicable to PAs, NPs, CNSs, and CRNAs in TINs that consist of
nonphysician EPs. This would be consistent with our policy to apply the
payment adjustments applicable to the lower group size when there is a
discrepancy in the group size between PECOS and claims analysis, in
that it would result in the group being subject to the lower amount at
risk and lower possible upward payment adjustment, when there is a
difference between the PECOS and claims analyses.
If the PECOS-generated list shows that a TIN consists of physicians
and the claims data shows, for example, that PAs and physicians billed
under the TIN, then we would apply the payment adjustments proposed in
section III.M.4.f. of this proposed rule for TINs with physicians and
nonphysician EPs depending on the size of the TIN. If the PECOS-
generated list shows, for example, that a TIN consists of PAs and the
claims data shows that only physical therapists billed under the group,
then the TIN would not be subject to the VM in CY 2018. Conversely, if
the PECOS-generated list shows, for example, that a TIN consists of
physical therapists and the claims data shows that only PAs

[[Page 41895]]

billed under the group, then the TIN would not be subject to the VM in
CY 2018. We welcome public comment on these proposals. We propose to
revise Sec. 414.1210(c) accordingly.
b. Application of the VM to Nonphysician EPs Who Are PAs, NPs, CNSs,
and CRNAs
Section 1848(p)(7) of the Act provides the Secretary discretion to
apply the VM on or after January 1, 2017 to EPs as defined in section
1848(k)(3)(B) of the Act. In the CY 2015 PFS final rule with comment
period (79 FR 67937), we finalized that we will apply the VM beginning
in the CY 2018 payment adjustment period to nonphysician EPs in groups
with two or more EPs and to nonphysician EPs who are solo
practitioners. We added Sec. 414.1210(a)(4) to reflect this policy.
Under this policy, we will apply the VM beginning in CY 2018 to the
items and services billed under the PFS by all of the physicians and
nonphysician EPs who bill under a group's TIN. Beginning in CY 2018,
the VM will apply to all of the EPs, as specified in section
1848(k)(3)(B) of the Act, that bill under a group's TIN based on the
TIN's performance during the applicable performance period. During the
payment adjustment period, all of the nonphysician EPs who bill under a
group's TIN will be subject to the same VM that will apply to the
physicians who bill under that TIN. We finalized the modification to
the definition of ``group of physicians'' under Sec. 414.1205 to also
include the term ``group'' to reflect these policies. Additionally, we
finalized that beginning in CY 2018, physicians and nonphysician EPs
will be subject to the same VM policies established in earlier
rulemakings and under subpart N. For example, nonphysician EPs will be
subject to the same amount of payment at risk and quality-tiering
policies as physicians. We finalized modifications to the regulations
under subpart N accordingly.
Under section 1848(p)(4)(B)(iii) of the Act, as amended by section
101(b)(3) of MACRA, the VM shall not be applied to payments for items
and services furnished on or after January 1, 2019. Section 1848(q) of
the Act, as added by section 101(c) of MACRA, establishes the Merit-
based Incentive Payment System (MIPS) that shall apply to payments for
items and services furnished on or after January 1, 2019. Under section
1848(q)(1)(C)(i)(I) of the Act, with regard to payments for items and
services furnished in 2019 and 2020, the MIPS will only apply to:
A physician (as defined in section 1861(r) of the Act);
A PA, NP, and CNS (as defined in section 1861(aa)(5) of
the Act);
A CRNA (as defined in section 1861(bb)(2) of the Act); and
A group that includes such professionals.
Then, under section 1848(q)(1)(C)(i)(II) of the Act, beginning with
payments for items and services furnished in 2021, the MIPS will apply
to such other EPs as defined in section 1848(k)(3)(B) of the Act as
specified by the Secretary. As noted above, section 1848(p)(7) of the
Act provides the Secretary discretion to apply the VM on or after
January 1, 2017 to EPs as defined in section 1848(k)(3)(B) of the Act.
In the CY 2015 PFS final rule with comment period (79 FR 67937), we
finalized that we will apply the VM beginning in the CY 2018 payment
adjustment period to all nonphysician EPs in groups with two or more
EPs and to nonphysician EPs who are solo practitioners. However, after
the enactment of MACRA in April 2015, we believe it would not be
appropriate to apply the VM in CY 2018 to any nonphysician EP who is
not a PA, NP, CNS, or CRNA since payment adjustments under the MIPS
would not apply to them until 2021. Therefore, we propose to apply the
VM in the CY 2018 payment adjustment period to nonphysician EPs who are
PAs, NPs, CNSs, and CRNAs in groups with two or more EPs and to PAs,
NPs, CNSs, and CRNAs who are solo practitioners. We propose to revise
Sec. 414.1210(a)(4) to reflect this proposed policy. We propose to
define PAs, NPs, and CNSs as defined in section 1861(aa)(5) of the Act
and to define CRNAs as defined in section 1861(bb)(2) of the Act. We
propose to add these definitions under Sec. 414.1205.
Under our proposal, we would apply the VM in CY 2018 to the items
and services billed under the PFS by all of the PAs, NPs, CNSs, and
CRNAs who bill under a group's TIN based on the TIN's performance
during the applicable performance period. We note that the VM would not
apply to other types of nonphysician EPs (that is, nonphysician EPs who
are not PAs, NPs, CNSs, or CRNAs) who may also bill under the TIN.
As noted above, we finalized in the CY 2015 PFS final rule with
comment period (79 FR 67937) that beginning in CY 2018, all of the
nonphysician EPs who bill under a group's TIN will be subject to the
same VM that will apply to the physicians who bill under that TIN, and
physicians and nonphysician EPs will be subject to the same VM policies
established in earlier rulemakings and under subpart N. For example,
nonphysician EPs who are in groups containing one or more physicians
will be subject to the same amount of payment at risk and quality-
tiering policies as physicians. We are not proposing to revise these
policies; however, we note that if a group is composed of physicians
and nonphysician EPs, only the physicians and the nonphysician EPs who
are PAs, NPs, CNSs, and CRNAs would be subject to the VM in CY 2018.
In the CY 2015 PFS final rule with comment period (79 FR 67937), we
also finalized that we will apply the VM beginning in CY 2018 to groups
that consist only of nonphysician EPs (for example, groups with only
NPs or PAs) and to nonphysician EPs who are solo practitioners.
However, since CY 2018 will be the first year that groups that consist
only of nonphysician EPs and solo practitioners who are nonphysician
EPs will be subject to the VM, we finalized a policy to hold these
groups and solo practitioners harmless from downward adjustments under
the quality-tiering methodology in CY 2018. We stated that we will add
regulation text under Sec. 414.1270 to reflect this policy when we
establish the policies for the VM for the CY 2018 payment adjustment
period in future rulemaking. Accordingly, we propose to add Sec.
414.1270(d) to codify that PAs, NPs, CNSs, and CRNAs in groups that
consist of nonphysician EPs and PAs, NPs, CNSs, and CRNAs who are solo
practitioners will be held harmless from downward adjustments under the
quality-tiering methodology in CY 2018. In section III.M.4.f. of this
proposed rule, we discuss the proposed CY 2018 payment adjustment
amounts for groups that consist of nonphysician EPs and solo
practitioners who are nonphysician EPs that fall in Category 1 and
Category 2 for the CY 2018 VM. As discussed above, we are proposing to
apply the VM in CY 2018 only to nonphysician EPs who are PAs, NPs,
CNSs, and CRNAs.
c. Approach to Setting the VM Adjustment Based on PQRS Participation
Section 1848(p)(4)(B)(iii)(II) of the Act requires the Secretary to
apply the VM to items and services furnished under the PFS beginning
not later than January 1, 2017, for all physicians and groups of
physicians. Therefore, in the CY 2015 PFS final rule with comment
period (79 FR 67936), we established that, beginning with the CY 2017
payment adjustment period, the VM will apply to physicians in groups
with two or more EPs and to physicians who are solo practitioners based
on the applicable performance period. In the CY 2015 PFS

[[Page 41896]]

final rule with comment period (79 FR 67938 to 67939), we adopted a
two-category approach for the CY 2017 VM based on participation in the
PQRS by groups and solo practitioners. For purposes of the CY 2017 VM,
we finalized that Category 1 includes those groups that meet the
criteria for satisfactory reporting of data on PQRS quality measures
via the GPRO (through use of the web-interface, EHR, or registry
reporting mechanism) for the CY 2017 PQRS payment adjustment. We
finalized that Category 1 also includes groups that do not register to
participate in the PQRS as a group practice participating in the PQRS
GPRO in CY 2015 and that have at least 50 percent of the group's EPs
meet the criteria for satisfactory reporting of data on PQRS quality
measures as individuals (through the use of claims, EHR, or registry
reporting mechanism) for the CY 2017 PQRS payment adjustment, or in
lieu of satisfactory reporting, satisfactorily participate in a PQRS-
qualified clinical data registry (QCDR) for the CY 2017 PQRS payment
adjustment. Lastly, we finalized that Category 1 includes those solo
practitioners that meet the criteria for satisfactory reporting of data
on PQRS quality measures as individuals (through the use of claims,
registry, or EHR reporting mechanism) for the CY 2017 PQRS payment
adjustment, or in lieu of satisfactory reporting, satisfactorily
participate in a PQRS QCDR for the CY 2017 PQRS payment adjustment. We
finalized that Category 2 includes those groups and solo practitioners
that are subject to the CY 2017 VM and do not fall within Category 1.
The CY 2017 VM payment adjustment amount for groups and solo
practitioners in Category 2 is -4.0 percent for groups with 10 or more
EPs and -2.0 percent for groups with between 2 to 9 EPs and solo
practitioners.
We propose to use a similar two-category approach for the CY 2018
VM based on participation in the PQRS by groups and solo practitioners.
However, we note that during the 2014 PQRS submission period, we
received feedback from groups who experienced difficulty reporting
through the reporting mechanism they had chosen at the time of 2014
PQRS GPRO registration. For example, some groups registered for the
group EHR reporting mechanism and were subsequently informed that their
EHR vendor could not support submission of group data for the group EHR
reporting mechanism. To address these concerns and continue to
accommodate the various ways in which EPs and groups can participate in
the PQRS, for purposes of the CY 2018 VM, we propose that Category 1
would include those groups that meet the criteria to avoid the PQRS
payment adjustment for CY 2018 as a group practice participating in the
PQRS GPRO, as proposed in table 21 of this proposed rule. We also
propose to include in Category 1 groups that have at least 50 percent
of the group's EPs meet the criteria to avoid the PQRS payment
adjustment for CY 2018 as individuals, as proposed in table 20 of this
proposed rule. We propose to add corresponding regulation text to Sec.
414.1270(d)(1).
We note that the proposed criteria for groups to be included in
Category 1 for the CY 2018 VM differ from the criteria we finalized for
the CY 2017 VM in the CY 2015 PFS final rule with comment period. Under
the policy for the CY 2017 VM, we would only consider whether at least
50 percent of a group's EPs met the criteria to avoid the PQRS payment
adjustment as individuals if the group did not register to participate
in a PQRS GPRO. In contrast, under our proposal for the CY 2018 VM, in
determining whether a group would be included in Category 1, we would
consider whether the 50 percent threshold has been met regardless of
whether the group registers for a PQRS GPRO. We believe this proposal
would allow groups that register for a PQRS GPRO but fail as a group to
meet the criteria to avoid the PQRS payment adjustment an additional
opportunity for the quality data reported by individual EPs in the
group to be taken into account for purposes of applying the CY 2018 VM.
We also propose to revise the criteria for groups to be included in
Category 1 for the CY 2017 VM, if it is operationally feasible for our
systems to utilize data reported through a mechanism other than the one
through which a group registered to report under PQRS GPRO. At this
time, it is unclear whether CMS systems can support this type of
assessment as soon as the CY 2017 VM, and thus our proposal is
contingent upon operational feasibility. For the CY 2017 VM, we propose
that Category 1 would include those groups that meet the criteria to
avoid the PQRS payment adjustment for CY 2017 as a group practice
participating in the PQRS GPRO in CY 2015. We also propose to include
in Category 1 groups that have at least 50 percent of the group's EPs
meet the criteria to avoid the PQRS payment adjustment for CY 2017 as
individuals. We propose that if operationally feasible, we would apply
these criteria to identify which groups would fall in Category 1 for
the CY 2017 VM regardless of whether or how the group registered to
participate in the PQRS as a group practice in CY 2015. If our systems
are not able to accomplish this, then we will apply our existing policy
for the CY 2017 VM, as finalized in the CY 2015 PFS final rule with
comment period (79 FR 67938 through 67939), to consider whether at
least 50 percent of a group's EPs meet the criteria to avoid the PQRS
payment adjustment for CY 2017 as individuals only in the event that
the group did not register to report as a group under the PQRS GPRO. We
seek comments on these proposals.
Lastly, we propose to include in Category 1 for the CY 2018 VM
those solo practitioners that meet the criteria to avoid the CY 2018
PQRS payment adjustment as individuals, as proposed in table 20 of this
proposed rule.
Category 2 would include those groups and solo practitioners that
are subject to the CY 2018 VM and do not fall within Category 1. As
discussed in section III.M.4.f. of this proposed rule, we are proposing
to apply the following VM adjustment to payments for groups and solo
practitioners that fall in Category 2 for the CY 2018 VM: A -4.0
percent VM to physicians, PAs, NPs, CNSs, and CRNAs in groups with 10
or more EPs; a -2.0 percent VM to physicians, PAs, NPs, CNSs, and CRNAs
in groups with between 2 to 9 EPs and to physician solo practitioners;
and a -2.0 percent VM to PAs, NPs, CNSs, and CRNAs in groups that
consist of nonphysician EPs and solo practitioners who are PAs, NPs,
CNSs, and CRNAs. As discussed in section III.M.4.b. of this proposed
rule, we propose to apply the VM in CY 2018 to the nonphysician EPs who
are PAs, NPs, CNSs, and CRNAs. We seek comment on these proposals.
For a group or solo practitioner that would be subject to the CY
2018 VM to be included in Category 1, the criteria for satisfactory
reporting (or the criteria for satisfactory participation, in the case
of solo practitioners and the 50 percent option described above for
groups) would need to be met during the reporting periods occurring in
CY 2016 for the CY 2018 PQRS payment adjustment. In section III.M.4.h.
of this proposed rule, we propose to use CY 2016 as the performance
period for the VM adjustments that will apply during CY 2018. In the
event that the criteria that are finalized for the CY 2018 PQRS payment
adjustment differ from what is proposed for the PQRS in this proposed
rule, our intention is to align the criteria for inclusion in Category
1 to the extent possible with the criteria that are

[[Page 41897]]

ultimately established for the CY 2018 PQRS payment adjustment.
In the CY 2015 PFS final rule with comment period (79 FR 67939 to
67941), we finalized that the quality-tiering methodology will apply to
all groups and solo practitioners in Category 1 for the VM for CY 2017,
except that groups with between 2 to 9 EPs and solo practitioners would
be subject only to upward or neutral adjustments derived under the
quality-tiering methodology, while groups with 10 or more EPs would be
subject to upward, neutral, or downward adjustments derived under the
quality-tiering methodology. In other words, groups with between 2 to 9
EPs and solo practitioners in Category 1 would be held harmless from
any downward adjustments derived from the quality-tiering methodology
for the CY 2017 VM.
As stated earlier in this proposed rule, in CY 2018, the same VM
would apply to all of the physicians, PAs, NPs, CNSs, and CRNAs who
bill under a TIN. The VM would not apply to other types of nonphysician
EPs who may also bill under the TIN. For the CY 2018 VM, we propose to
continue to apply the quality-tiering methodology to all groups and
solo practitioners in Category 1. We propose that groups and solo
practitioners would be subject to upward, neutral, or downward
adjustments derived under the quality-tiering methodology, with the
exception finalized in the CY 2015 PFS final rule with comments period
(79 FR 67937), that groups consisting only of nonphysician EPs and solo
practitioners who are nonphysician EPs will be held harmless from
downward adjustments under the quality-tiering methodology in CY 2018.
Based on our proposal to apply the CY 2018 VM only to certain types of
nonphysician EPs, only the PAs, NPs, CNSs, and CRNAs in groups
consisting of nonphysician EPs and those who are solo practitioners
will be held harmless from downward adjustments under the quality-
tiering methodology in CY 2018. We propose to revise Sec. 414.1270 to
reflect these proposals. We seek comments on these proposals. In
section III.M.4.f. of this proposed rule, we discuss the proposed CY
2018 payment adjustment amounts for groups and solo practitioners that
fall in Category 1 and Category 2 for the CY 2018 VM.
For groups with between 2 to 9 EPs and physician solo
practitioners, we believe it is appropriate to begin both the upward
and downward payment adjustments under the quality-tiering methodology
for the CY 2018 VM. As stated in the CY 2015 PFS final rule with
comment period (79 FR 67935), in September 2014, we made available
QRURs based on CY 2013 data to all groups of physicians and physicians
who are solo practitioners. These QRURs contain performance information
on the quality and cost measures used to calculate the quality and cost
composites of the VM and show how all TINs fare under the policies
established for the VM for the CY 2015 payment adjustment period. As
discussed in section III.M.5.a. of this proposed rule, in April 2015,
we made available 2014 Mid-Year QRURs to groups of physicians and
physician solo practitioners nationwide. The Mid-Year QRURs provide
interim information about performance on the claims-based quality
outcome measures and cost measures that are a subset of the measures
that will be used to calculate the CY 2016 VM and are based on
performance from July 1, 2013 through June 30, 2014. Then, during the
Fall of 2015, we intend to disseminate QRURs based on CY 2014 data to
all groups and solo practitioners, and the reports would show all TINs
their performance during CY 2014 on all of the quality and cost
measures that will be used to calculate the CY 2016 VM. Thus, we
believe groups with between 2 to 9 EPs and physician solo practitioners
will have adequate data to improve performance on the quality and cost
measures that will be used to calculate the VM in CY 2018. We note that
the quality and cost measures in the QRURs that these groups will
receive are similar to the measures that will be used to calculate the
CY 2018 VM. In addition, we believe that these groups and solo
practitioners have had sufficient time to understand how the VM works
and how to participate in the PQRS. As a result, we believe it is
appropriate to apply both upward and downward adjustments under the
quality-tiering methodology to groups with between 2 to 9 EPs and
physician solo practitioners in CY 2018.
We will continue to monitor the VM program and continue to examine
in the VM Experience Report the characteristics of those groups and
solo practitioners that would be subject to an upward or downward
payment adjustment under our quality-tiering methodology to determine
whether our policies create anomalous effects in ways that do not
reflect consistent differences in performance among physicians and
physician groups.
d. Application of the VM to Physicians and Nonphysician EPs Who
Participate in ACOs Under the Shared Savings Program
In the CY 2015 PFS final rule with comment period, we finalized a
policy to apply the VM, beginning with the CY 2017 payment adjustment
period, to physicians in groups with two or more EPs and physicians who
are solo practitioners that participate in an ACO under the Shared
Savings Program, and beginning with the CY 2018 payment adjustment
period, to nonphysician EPs in groups with two or more EPs and
nonphysician EPs who are solo practitioners that participate in an ACO
under the Shared Savings Program. We finalized that the determination
of whether a group or solo practitioner is considered to be in an ACO
under the Shared Savings Program would be based on whether that group
or solo practitioner, as identified by TIN, was an ACO participant in
the performance period for the applicable payment adjustment period for
the VM. For groups and solo practitioners determined to be ACO
participants, we finalized a policy that we would classify the group or
solo practitioner's cost composite as ``average'' and calculate its
quality composite based on the quality-tiering methodology using
quality data submitted by the Shared Savings Program ACO for the
performance period and apply the same quality composite to all of the
groups and solo practitioners, as identified by TIN, under that ACO.
For further explanation of the final policies for applying the VM to
ACO participants in Shared Savings Program ACOs, we refer readers to 79
FR 67941 through 67947 and 67956 through 67957.
(1) Application of the VM to Groups and Solo Practitioners Who
Participate in Multiple Shared Savings Program ACOs
Under the Shared Savings Program regulations (Sec. 425.306(b)), an
ACO participant TIN upon which beneficiary assignment is dependent may
only participate in one Shared Savings Program ACO. ACO participant
TINs that do not bill for primary care services, however, are not
required to be exclusive to one Shared Savings Program ACO. As a
result, there are a small number of TINs that are ACO participants in
multiple Shared Savings Program ACOs. We did not previously address how
the VM will be applied to these TINs.
Beginning with the CY 2017 payment adjustment period, we propose
that TINs that participate in multiple Shared Savings Program ACOs in
the applicable

[[Page 41898]]

performance period would receive the quality composite score of the ACO
that has the highest numerical quality composite score. For this
determination, we will only consider the quality data of an ACO that
completes quality reporting under the Shared Savings Program. We
propose to apply this policy in situations where the VM is determined
based on quality-tiering or the ACO's failure to successfully report
quality data as required by the Shared Savings Program. Below are
several examples to illustrate the proposal:

Example A: TIN A participates in ACO 1 and ACO 2 in the 2015
performance period. ACO 1 fails to complete quality reporting under
the Shared Savings Program as required under Sec. 425.504(a)(1),
and therefore, the ACO 1 participants would be classified as
Category 2 and subject to the automatic downward adjustment under
the VM. ACO 2 completes quality reporting as required under Sec.
425.504(a)(1), and applying the quality-tiering methodology as
described at Sec. 414.1210(b)(2)(i)(B) using ACO 2's quality data,
the TIN would be classified as average quality. Under our proposal,
TIN A would receive a neutral (0 percent) VM in 2017 based on a
quality composite determined using ACO 2's quality reporting and a
cost composite of average.
Example B: TIN B participates in ACO 2 and ACO 3 in the 2015
performance period. ACO 2 and ACO 3 complete quality reporting under
the Shared Savings Program, and ACO 3 has a higher numerical quality
composite score than ACO 2. Under our proposal, TIN B would receive
a VM in 2017 based on a quality composite determined using ACO 3's
quality reporting and a cost composite of average.
Example C: TIN C participates in ACO 1 and ACO 4 in the 2015
performance period. Both ACO 1 and ACO 4 fail to complete quality
reporting under the Shared Savings Program. TIN C would still be
classified as Category 2 and would receive an automatic downward
adjustment because both ACOs failed to report. This scenario is not
affected by our proposal.

Under the VM, any TIN's quality composite score must be at least
one standard deviation away from and statistically significantly
different from the mean, for it to be classified as other than average
quality (77 FR 69325). Because of this requirement, it is possible for
any TIN's quality composite to be categorized as ``average,'' due to
its being either within one standard deviation of the mean or not
statistically significant from it. Similarly, it is possible that
including performance data for the ACO with the higher quality
composite score in a given TIN's VM calculation would not result in a
higher VM adjustment percentage than would inclusion of data from
another ACO with a lower quality composite score that is also at least
1 standard deviation away from the mean. Given the requirement that a
Shared Savings Program ACO must have at least 5,000 assigned
beneficiaries, we do not expect that this situation is likely to occur,
though it is possible. The following example illustrates how this
situation could occur:

Example D: TIN B participates in ACO 2 and ACO 3 in the 2015
performance period. ACO 2 completes quality reporting and the
quality composite score using ACO 2's quality data is two standard
deviations below the mean but is not statistically below the mean,
in the sense of being both below the mean and statistically
significantly different from the mean. Under Sec. 414.1275(b)(1),
the quality composite score would be classified as average because
it is not statistically below the mean. ACO 3 completes quality
reporting and the quality composite score using ACO 3's quality data
is one and a half standard deviations below the mean and, is
statistically significantly below the mean. Under Sec.
414.1275(b)(1), the quality composite score would be classified as
low. The quality composite score that is one and a half standard
deviations below the mean is numerically higher than the quality
composite score that is two standard deviations below the mean, so
under our proposal, TIN B would receive a negative VM in 2017 based
on a quality composite determined using ACO 3's quality reporting
and a cost composite of average.

We believe our proposed approach is appropriate because it is
straightforward for TINs participating in multiple Shared Savings
Program ACOs to understand. The proposed policy is transparent and
would allow Shared Savings Program ACO participant TINs the ability to
compare the performance of the highest-performing ACO in which they
participate to national benchmarks. Given that we did not make
proposals for applying the VM to these TINs prior to the start of the
2015 performance period for the 2017 VM, we do not believe it would be
fair to give ACO participants in multiple Shared Savings Program ACOs
the lower of the quality composite scores for which they may have been
eligible. We propose to make corresponding changes to Sec.
414.1210(b)(2). We are seeking comment on this proposal.
In developing this proposed policy, we considered several
alternative options. We considered proposing that the above policy
would apply as long as all ACOs in which the TIN participates complete
reporting under the Shared Savings Program. If one of the ACOs failed
to report, the TIN would be categorized as Category 2 even though it
participated in another ACO that successfully reported. We believe this
would create unnecessary complexity and would not be fair to TINs that
were not made aware of this policy prior to the start of the CY 2015
performance period for the 2017 payment adjustment period. We also
considered proposing a policy under which the TIN would be required to
indicate which ACO it wanted to be associated with for purposes of the
VM. We did not make this proposal because we believed it created
additional operational complexity for the TINs and us, and would put
the TIN in a position of having to predict which ACO would perform
better under the VM, which we do not believe would be appropriate. We
welcome feedback on these alternatives we considered.
(2) Application of VM to Participant TINs in Shared Savings Program
ACOs That Also Include EPs Who Participate in Innovation Center Models
Under the Shared Savings Program statute and regulations, ACO
participants may not participate in another Medicare initiative that
involves shared savings payments (Sec. 425.114(b)). However, there are
Medicare initiatives, including models authorized by the Innovation
Center, that do not involve shared savings payments, and in some cases
a TIN that is a Shared Savings Program participant may also include EPs
who participate in an Innovation Center model. Because the Shared
Savings Program identifies participants by a TIN and many Innovation
Center models allow some EPs under a TIN to participate in the model
while other EPs under that TIN do not, we believe it is more
appropriate to apply the VM policies finalized for Shared Savings
Program participants to these TINs than to apply the policies for
Innovation Center models proposed in section III.M.4.e. of this
proposed rule. We are proposing that, beginning with the 2017 payment
adjustment period for the VM, we would determine the VM for groups and
solo practitioners (as identified by TIN) who participated in a Shared
Savings Program ACO in the performance period in accordance with the VM
policies for Shared Savings Program participants under Sec.
414.1210(b)(2), regardless of whether any EPs under the TIN also
participated in an Innovation Center model during the performance
period. We propose to make corresponding changes to Sec.
414.1210(b)(2)(i)(E). We are seeking comment on this proposal.
(3) Application of VM to Participant TINs in Shared Savings Program
ACOs That Do Not Complete Quality Reporting
In the CY 2015 PFS proposed rule, we did not specifically address
the scenario in which a Shared Savings Program ACO does not
successfully report on

[[Page 41899]]

quality as required under the Shared Savings Program during the
performance period for the VM. We clarified in the CY 2015 PFS final
rule with comment period that we intended to adopt for groups and solo
practitioners that participate in a Shared Savings Program ACO the same
policy that is generally applicable to groups and solo practitioners
that fail to satisfactorily report or participate under PQRS and thus
fall in Category 2 and are subject to an automatic downward adjustment
under the VM in CY 2017 (79 FR 67946). We stated that, consistent with
the application of the VM to other groups and solo practitioners that
report under PQRS, if the ACO does not successfully report quality data
as required by the Shared Savings Program under Sec. 425.504, all
groups and solo practitioners participating in the ACO will fall in
Category 2 for the VM, and therefore, will be subject to a downward
payment adjustment. We finalized this policy for the 2017 payment
adjustment period for the VM at Sec. 414.1210(b)(2)(i)(C). We propose
to continue this policy in the CY 2018 payment adjustment period for
all groups and solo practitioners subject to the VM, including groups
composed of nonphysician EPs and solo practitioners who are
nonphysician EPs. We propose corresponding revisions to Sec.
414.1210(b)(2)(i)(D). This policy is consistent with our policy for
groups and solo practitioners who are subject to the VM and do not
participate in the Shared Savings Program, and we believe it would
further encourage quality reporting. We are seeking comment on this
proposal.
(4) Application of an Additional Upward Payment Adjustment to High
Quality Participant TINs in Shared Savings Program ACOs for Treating
High-Risk Beneficiaries
In the CY 2015 PFS final rule with comment period, we finalized in
the regulation text at Sec. 414.1275(d)(2) that groups and solo
practitioners that are classified as high quality/low cost, high
quality/average cost, or average quality/low cost under the quality-
tiering methodology for the CY 2017 payment adjustment period would
receive an additional upward payment adjustment of +1.0x, if their
attributed patient population has an average beneficiary risk score
that is in the top 25 percent of all beneficiary risk scores
nationwide. We are proposing a similar policy for the CY 2018 payment
adjustment period as discussed in section III.M.4.f. of this proposed
rule.
Beginning in the CY 2017 payment adjustment period, we propose to
apply a similar additional upward adjustment to groups and solo
practitioners that participated in high performing Shared Savings
Program ACOs that cared for high-risk beneficiaries (as evidenced by
the average HCC risk score of the ACO's attributed beneficiary
population as determined under the VM methodology) during the
performance period. We finalized in the CY 2015 PFS final rule with
comment period that the quality composite score for TINs that
participated in Shared Savings Program ACOs during the performance
period will be calculated using the quality data reported by the ACO
through the ACO GPRO Web Interface and the ACO all-cause hospital
readmission measure, and the cost composite will be classified as
``average'' (79 FR 67941 through 67947). We believe this policy would
be appropriate because attribution on the quality measures used in the
VM calculation for Shared Savings Program ACO TINs is done at the ACO
level. Further, under the Shared Savings Program ACO participants are
responsible for coordinating the care of beneficiaries assigned to the
ACO, so it is appropriate to determine whether those beneficiaries are
in the highest risk category, at the ACO level. Therefore, beginning in
the CY 2017 payment adjustment period, we propose to apply an
additional upward payment adjustment of +1.0x to Shared Savings Program
ACO participant TINs that are classified as ``high quality'' under the
quality-tiering methodology, if the attributed patient population of
the ACO in which the TINs participated during the performance period
has an average beneficiary risk score that is in the top 25 percent of
all beneficiary risk scores nationwide as determined under the VM
methodology. We propose corresponding revisions to the regulation text
at Sec. 414.1210(b)(2). We are seeking comment on this proposal.
In the CY 2015 PFS proposed rule (79 FR 40500), we proposed that
groups and solo practitioners participating in ACOs under the Shared
Savings Program would be eligible for the additional upward payment
adjustment +1.0x for caring for high-risk beneficiaries; however, the
proposal was not finalized in the CY 2015 PFS final rule with comment
period. We note that our proposal above is based on using the ACO's
assigned beneficiary population; whereas, our proposal in the CY 2015
PFS Proposed Rule was based on using the group or solo practitioner's
attributed beneficiary population.
e. Application of the VM to Physicians and Nonphysician EPs That
Participate in the Pioneer ACO Model, the CPC Initiative, or Other
Similar Innovation Center Models or CMS Initiatives
We established a policy in the CY 2013 PFS final rule with comment
period (77 FR 69313) to not apply the VM in the CY 2015 and CY 2016
payment adjustment periods to groups of physicians that participate in
Shared Savings Program ACOs, the Pioneer ACO Model, the Comprehensive
Primary Care (CPC) initiative, or other similar Innovation Center
models or CMS initiatives. We stated in the CY 2014 PFS final rule with
comment period (78 FR 74766) that from an operational perspective, we
will apply this policy to any group of physicians that otherwise would
be subject to the VM, if one or more physician(s) in the group
participate(s) in one of these programs or initiatives during the
relevant performance period (CY 2013 for the CY 2015 payment adjustment
period, and CY 2014 for the CY 2016 payment adjustment period). In the
CY 2015 PFS final rule with comment period (79 FR 67949), we finalized
a policy that for solo practitioners and groups subject to the VM with
at least one EP participating in the Pioneer ACO Model or CPC
Initiative during the performance period, we will classify the cost
composite as ``average cost'' and the quality composite as ``average
quality'' for the CY 2017 payment adjustment period. We did not
finalize a policy for any payment adjustment period after CY 2017. We
believed this policy was appropriate because it would enable groups and
solo practitioners participating in these Innovation Center models to
focus on the goals of the models and would minimize the risk of
potentially creating conflicting incentives with regard to the
evaluation of the quality and cost of care furnished for the VM and
evaluation of cost and quality under these models. In addition, given
that these models include groups in which some EPs participate in the
model and others do not participate, it is challenging to meaningfully
evaluate the quality of care furnished by these groups.
(1) Application of the VM to Solo Practitioners and Groups With EPs Who
Participate in the Pioneer ACO Model and CPC Initiative
We received many comments on the proposals made in the CY 2015 PFS
proposed rule indicating that we should exempt Pioneer ACO Model and
CPC Initiative participants from the VM. As we noted in response to
comments in

[[Page 41900]]

the CY 2015 final rule with comment period (79 FR 67947), a few
commenters also suggested that the application of the VM to Innovation
Center initiatives should be waived under section 1115A of the Act. In
considering potential policy options to include in this proposed rule,
we agree with the commenters that it would be appropriate to use the
waiver authority with regard to the Pioneer ACO Model and CPC
Initiative. Accordingly, under section 1115A(d)(1) of the Act, we are
proposing to waive application of the VM as required by section 1848(p)
of the Act for groups and solo practitioners, as identified by TIN, if
at least one EP who billed for PFS items and services under the TIN
during the applicable performance period for the VM participated in the
Pioneer ACO Model or CPC Initiative during the performance period. This
policy, as well as the use of the waiver authority under section
1115A(d)(1) for this purpose, will no longer apply in CY 2019 when the
Value Modifier program is incorporated into the new Merit-based
Incentive Payment System. We believe a waiver is necessary to test
these models because their effectiveness would be impossible to isolate
from the confounding variables of quality and cost metrics and
contrasting payment incentives utilized under the VM.
CPC Initiative: CPC practice sites are assessed on and
have the opportunity to receive shared savings based on their quality
and cost performance. CPC practice sites are assessed on quality
measures at the practice site level and, for utilization measures, at
the regional level (all practice sites within a CPC region), rather
than at the TIN level as for the VM. The cost evaluation methodology
used by the CPC Initiative is significantly different from the cost
measures and benchmarks used to calculate the cost composite for the
VM. In addition, it is difficult to evaluate the quality of care
furnished by groups that participate in the CPC Initiative in order to
calculate a quality composite for the VM because the CPC Initiative
includes ``split TINs'' (groups where some eligible professionals in
the group participate in the model while others do not participate),
whereas the VM is applied to an entire TIN. As we noted in the CY 2015
PFS proposed rule (79 FR 40501), we do not believe that we can
reasonably use the quality data submitted under the CPC Initiative for
purposes of calculating a quality composite score under the VM. For
these reasons, we believe it is necessary to waive the VM for purposes
of testing the CPC Initiative. We believe a waiver would allow CPC
model participants to focus on the aims of and measures assessed in the
model, diminish the potential for methodological differences between
the model and the VM, and would avoid the potential for inequitable
comparisons of cost and quality that could arise as a result of
differences between VM and CPC.
Pioneer ACO Model: The Pioneer ACO Model combines two-
sided financial risk with quality outcomes. Participants in the Pioneer
ACO Model are required to report quality, and their savings or loss
determination is affected by their quality score. Similar to the CPC
Initiative, the Pioneer ACO Model includes split TINs, and we do not
believe that we can reasonably use the quality data reported under the
Pioneer ACO Model for purposes of calculating a quality composite score
for the VM. The Pioneer ACO Model's methodology for evaluating costs is
also significantly different from the VM methodology, which could
create conflicting incentives for model participants. We believe a
waiver of the VM is necessary to test the Pioneer ACO Model for these
reasons. We also note that Pioneer ACOs are in their final performance
years of the Model. Changing the quality component of the Model at this
stage would confound multiple variables of quality and cost metrics
within the model.
We believe we could have waived application of the VM for these
models with regard to the CY 2017 payment adjustment period, and we are
proposing the waiver would apply beginning with the CY 2017 payment
adjustment period. We note that in practice, this proposal would not
affect a TIN's payments differently as compared with the current policy
for the CY 2017 payment adjustment period. A TIN that is classified as
``average cost'' and ``average quality'' would receive a neutral (0
percent) adjustment, and thus its payments during the CY would not
increase or decrease as a result of the application of the VM. We also
note that we have established a policy to apply the VM at the TIN level
(77 FR 69308-69310), and as a result, this proposed waiver would affect
the payments for items and services billed under the PFS for the CY
2017 and 2018 payment adjustment periods for the EPs who participate in
the Pioneer ACO Model and the CPC Initiative during the performance
period, as well as the EPs who do not participate in one of these
models but bill under the same TIN as the EPs who do participate. We
are proposing to revise Sec. 414.1210(b)(3) to reflect these
proposals. We are seeking comment on these proposals. We continue to
explore how to address practices that only have some physicians
participating in a model and plan to seek stakeholder input on these
'split TIN' practices and related issues in an upcoming Request for
Information.
(2) Application of the VM to Solo Practitioners and Groups With EPs Who
Participate in Similar Innovation Center Models
In the CY 2015 PFS final rule with comment period (79 FR 67949-
67950), we finalized criteria that we will use to determine if future
Innovation Center models or CMS initiatives are ``similar'' to the
Pioneer ACO Model and CPC Initiative. We finalized that we will apply
the same VM policies adopted for participants in the Pioneer ACO Model
and CPC Initiative to groups and solo practitioners who participate in
similar Innovation Center models and CMS initiatives. The criteria are:
(1) The model or initiative evaluates the quality of care and/or
requires reporting on quality measures; (2) the model or initiative
evaluates the cost of care and/or requires reporting on cost measures;
(3) participants in the model or initiative receive payment based at
least in part on their performance on quality measures and/or cost
measures; (4) potential for conflict between the methodologies used for
the VM and the methodologies used for the model or initiative; or (5)
other relevant factors specific to a model or initiative. We noted that
a model or initiative would not have to satisfy or address all of these
criteria to be considered a similar model or initiative.
We are proposing that in the event we finalize our proposal to
waive application of the VM under section 1115A(d)(1) of the Act for
the Pioneer ACO Model and CPC Initiative as discussed in the preceding
section, we would also waive application of the VM for Innovation
Center models that we determine are similar models based on the
criteria above and for which we determine such a waiver is necessary
for purposes of testing the model in accordance with section
1115A(d)(1) of the Act. For models that we determine are similar and
require a waiver, we would waive application of the VM as required by
section 1848(p) of the Act for groups and solo practitioners, as
identified by TIN, if at least one EP who billed for PFS items and
services under the TIN during the applicable performance period for the
VM participated in the model during the performance period. We again
note that this policy and use of the waiver

[[Page 41901]]

authority under section 1115A(d)(1) would sunset prior to CY 2019 when
the VM is replaced by MIPS. We would publish a notice of the waiver in
the Federal Register and also provide notice to participants in the
model through the methods of communication that are typically used for
the model. We are proposing to revise Sec. 414.1210(b)(4) to reflect
this proposal. We are seeking comment on this proposal.
(a) Application of the VM to Solo Practitioners and Groups With EPs Who
Participate in the Comprehensive ESRD Care Initiative, Oncology Care
Model, and the Next Generation ACO Model
There are several new Innovation Center models starting in 2015 or
2016, including the Comprehensive ESRD Care Initiative, Oncology Care
Model, and the Next Generation ACO Model. We have evaluated these
models based on the criteria for ``similar'' models and initiatives
described in the preceding section and determined that they are similar
to the Pioneer ACO Model and CPC Initiative. We believe a waiver of the
VM under section 1115A(d)(1) of the Act is necessary to test these
models. These new models may include groups in which some EPs
participate in the model and others do not, which will make it
challenging to meaningfully calculate the quality and cost composite
for these TINs needed for the application of the VM. The following
bullets describe these models, including ways in which these models are
similar to the Pioneer ACO Model and the CPC Initiative, and provide a
brief explanation of our belief that a waiver is necessary to test the
models:
The Next Generation ACO Model: The Next Generation ACO
Model builds upon CMS ACO initiatives with ACOs taking on even greater
financial risk than they have in the Pioneer ACO Model. Next Generation
ACOs may receive waivers related to coverage for telehealth services,
post-discharge home visits, and skilled nursing without prior
hospitalization. The first performance period for this model is 2016,
and we want to minimize conflicting incentives with regard to the
evaluation of the quality and cost of care furnished for the VM and
evaluation of cost and quality under this model.
The Oncology Care Model: The Oncology Care Model (OCM) is
an episode-based model that provides an incentive for participating
practices to reduce the total cost of care for 6-month episodes
triggered by either an initial chemotherapy administration claim or
initial Part D chemotherapy claim. The first performance period of this
model will start in 2016. OCM will use a set of measures that are
specific to oncology and may not be included in existing federal
quality reporting programs, such as the PQRS. Additionally, OCM will
use a quarterly reporting period that is different than the calendar
year performance period for the VM. Due to the specialty-specific
measure set and alternative reporting period, we believe that waiving
the VM would minimize conflicting incentives between programs with
regard to the evaluation of quality of cost and care.
The Comprehensive ESRD Care Initiative: The Comprehensive
ESRD Care (CEC) Initiative is planning to start an 18-month performance
period in August 2015 and is seeking to use the authority under section
1899(b)(3)(D) of the Act to utilize alternative measures, namely the
CEC Initiative quality measure set, to serve as satisfactory reporting
for the PQRS program beginning in CY 2016. The use of the alternative
CEC measure set would result in insufficient PQRS quality data to
reliably calculate a quality composite score for the VM. While the CEC
Initiative may have TINs that include non-participants that choose to
report separately to the PQRS program, their PQRS data may not be
representative of the TIN, and therefore we believe it would be
inappropriate for calculating the VM. As with other CMMI models, we
believe waiving the application of the VM would minimize conflicting
incentives with regard to the evaluation of the quality and cost of
care.
We are proposing that in the event we finalize our proposal to
waive application of the VM as required by section 1848(p) of the Act
under section 1115A(d)(1) of the Act for the Pioneer ACO Model and CPC
Initiative, we would also waive application of the VM for the Next
Generation ACO Model, the Oncology Care Model, and the Comprehensive
ESRD Care Initiative as similar models. Specifically, we would waive
application of the VM for the CY 2018 payment adjustment period for
groups and solo practitioners, as identified by TIN, if at least one EP
who billed for PFS items and services under the TIN during the CY 2016
performance period for the VM participated in the Next Generation ACO
Model, the Oncology Care Model, or the Comprehensive ESRD Care
Initiative during the CY 2016 performance period. We are seeking
comment on this proposal.
(b) Application of VM to Similar CMS Initiatives That Are Not
Innovation Center Models
In the CY 2015 PFS final rule with comment period (79 FR 67949-
67950), we finalized criteria that we will use to determine if future
Innovation Center models or CMS initiatives are ``similar'' to the
Pioneer ACO Model and CPC Initiative. We finalized that we will apply
the same VM policies adopted for participants in the Pioneer ACO Model
and CPC Initiative to groups and solo practitioners who participate in
similar Innovation Center models and CMS initiatives. We are proposing
in section III.M.4.e.1. of this proposed rule to waive the VM for solo
practitioners and groups with at least one EP participating in the
Pioneer ACO Model or CPC Initiative under section 1115A(d)(1) of the
Act. The waiver authority under section 1115A(d)(1) of the Act does not
apply to CMS initiatives that are not Innovation Center models.
Therefore, in the event that we finalize the waiver, we propose to
remove the references to ``CMS initiatives'' from Sec. 414.1210(b)(4).
To the extent that any CMS initiatives that are not Innovation Center
models would require alternative policies for application of the VM, we
would address those policies through future rulemaking. We are seeking
comment on this proposal.
f. Payment Adjustment Amount
Section 1848(p) of the Act does not specify the amount of payment
that should be subject to the adjustment for the VM; however, section
1848(p)(4)(C) of the Act requires the VM be implemented in a budget
neutral manner. Budget neutrality means that payments will increase for
some groups and solo practitioners based on high performance and
decrease for others based on low performance, but the aggregate
expected amount of Medicare spending in any given year for physician
and nonphysician EP services paid under the Medicare PFS will not
change as a result of application of the VM.
In the CY 2015 PFS final rule with comment period (79 FR 67952 to
67954), we finalized that we will apply a -2.0 percent VM to groups
with between 2 to 9 EPs and physician solo practitioners that fall in
Category 2 for the CY 2017 VM. We also finalized that the maximum
upward adjustment under the quality-tiering methodology in CY 2017 for
groups with between 2 to 9 EPs and physician solo practitioners that
fall in Category 1 will be +2.0x if a group or solo practitioner is
classified as high quality/low cost and +1.0x if a group or solo
practitioner is classified as either average quality/low cost or high
quality/average cost. These groups and solo practitioners will be held
harmless from any downward adjustments under the quality-tiering
methodology in CY 2017,

[[Page 41902]]

if classified as low quality/high cost, low quality/average cost, or
average quality/high cost.
For groups with 10 or more EPs, we finalized for CY 2017 that we
will apply a -4.0 percent VM to a group that falls in Category 2. In
addition, we finalized that we will set the maximum downward adjustment
under the quality-tiering methodology in CY 2017 to -4.0 percent for
groups with 10 or more EPs classified as low quality/high cost and set
the adjustment to -2.0 percent for groups classified as either low
quality/average cost or average quality/high cost. We finalized that we
will also set the maximum upward adjustment under the quality-tiering
methodology in CY 2017 to +4.0x for groups with 10 or more EPs
classified as high quality/low cost and set the adjustment to +2.0x for
groups classified as either average quality/low cost or high quality/
average cost. We also finalized that we will continue to provide an
additional upward payment adjustment of +1.0x to groups with two or
more EPs and solo practitioners that care for high-risk beneficiaries
(as evidenced by the average HCC risk score of the attributed
beneficiary population).
As noted in section III.M.4.b. of this proposed rule, under section
1848(p)(4)(B)(iii) of the Act, as amended by section 101(b)(3) of
MACRA, the VM shall not be applied to payments for items and services
furnished on or after January 1, 2019. Section 1848(q) of the Act, as
added by section 101(c) of MACRA, establishes the Merit-based Incentive
Payment System (MIPS) that shall apply to payments for items and
services furnished on or after January 1, 2019. To maintain stability
in the payment adjustment amounts applicable under the VM as we
transition to the MIPS in 2019, we propose to maintain the payment
adjustment amounts in CY 2018 that we finalized for the CY 2017 VM in
the CY 2015 PFS final rule with comment period for groups with 2 or
more EPs and physician solo practitioners, with the exception discussed
in section III.M.4.c. of this proposed rule that in CY 2018 we propose
to apply both the upward and downward adjustments under the quality-
tiering methodology to groups with 2 to 9 EPs and physician solo
practitioners that are in Category 1.
For CY 2018, we propose to apply a -4.0 percent VM to physicians,
PAs, NPs, CNSs, and CRNAs in groups with 10 or more EPs that fall in
Category 2. In addition, we propose to set the maximum downward
adjustment under the quality-tiering methodology in CY 2018 to -4.0
percent for physicians, PAs, NPs, CNSs, and CRNAs in groups with 10 or
more EPs classified as low quality/high cost and to set the adjustment
to -2.0 percent for groups classified as either low quality/average
cost or average quality/high cost. We also propose to set the maximum
upward adjustment under the quality-tiering methodology in CY 2018 to
+4.0x for physicians, PAs, NPs, CNSs, and CRNAs in groups with 10 or
more EPs classified as high quality/low cost and to set the adjustment
to +2.0x for groups classified as either average quality/low cost or
high quality/average cost. Table 33 shows the proposed quality-tiering
payment adjustment amounts for CY 2018 for physicians, PAs, NPs, CNSs,
and CRNAs in groups with 10 or more EPs. These proposed payment amounts
would be applicable to all of the physicians, NPs, PAs, CNSs, and CRNAs
who bill under a group's TIN in CY 2018.
For CY 2018, we propose to apply a -2.0 percent VM to physicians,
PAs, NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and
physician solo practitioners that fall in Category 2. In addition, we
propose to set the maximum downward adjustment under the quality-
tiering methodology in CY 2018 to -2.0 percent for physicians, PAs,
NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and physician
solo practitioners classified as low quality/high cost and to set the
adjustment to -1.0 percent for groups and physciain solo practitioners
classified as either low quality/average cost or average quality/high
cost. We also propose to set the maximum upward adjustment under the
quality-tiering methodology in CY 2018 to +2.0x for physicians, PAs,
NPs, CNSs, and CRNAs in groups with between 2 to 9 EPs and physician
solo practitioners classified as high quality/low cost and to set the
adjustment to +1.0x for groups and physician solo practitioners
classified as either average quality/low cost or high quality/average
cost. Table 34 shows the proposed quality-tiering payment adjustment
amounts for CY 2018 for physicians, PAs, NPs, CNSs, and CRNAs in groups
with between 2 to 9 EPs and physician solo practitioners. These
proposed payment adjustment amounts would be applicable to all of the
physicians, NPs, PAs, CNSs, and CRNAs who bill under a group's TIN and
to physician solo practitioners in CY 2018.
For CY 2018, we propose to apply a -2.0 percent VM to PAs, NPs,
CNSs, and CRNAs in groups that consist of nonphysician EPs and solo
practitioners who are PAs, NPs, CNSs, and CRNAs that fall in Category 2
for the CY 2018 VM. As proposed in section III.M.4.b. of this proposed
rule, the nonphysician EPs to which the CY 2018 VM payment adjustments
would apply are PAs, NPs, CNSs, and CRNAs. We also propose that the
maximum upward adjustment under the quality-tiering methodology in CY
2018 for PAs, NPs, CNSs, and CRNAs in groups that consist of
nonphysician EPs and solo practitioners who are PAs, NPs, CNSs, and
CRNAs that fall in Category 1 would be +2.0x if a group or solo
practitioner is classified as high quality/low cost and +1.0x if a
group or solo practitioner is classified as either average quality/low
cost or high quality/average cost. As established in the CY 2015 PFS
final rule with comment period (79 FR 67937), these groups and solo
practitioners will be held harmless from any downward adjustments under
the quality-tiering methodology in CY 2018, if classified as low
quality/high cost, low quality/average cost, or average quality/high
cost. Table 35 shows the proposed quality-tiering payment adjustment
amounts for CY 2018 for PAs, NPs, CNSs, and CRNAs in groups that
consist of nonphysician EPs and PAs, NPs, CNSs, and CRNAs who are solo
practitioners. These groups and solo practitioners will have had less
time to become familiar with the QRURs since they will receive QRURs
for the first time in the Fall of 2015; whereas, groups consisting of
both physicians and nonphysician EPs and physician solo practitioners
received QRURs in the Fall of 2014 or in previous years, which enable
them to understand and improve performance on the measures used in the
VM. We believe our proposed approach would reward groups and solo
practitioners that provide high-quality/low-cost care. In addition, a
smaller increase in the maximum amount of payment at risk would be
consistent with our stated focus on gradual implementation of the VM.
We also propose to continue to provide an additional upward payment
adjustment of +1.0x to groups and solo practitioners that are eligible
for upward adjustments under the quality-tiering methodology and have
average beneficiary risk score that is in the top 25 percent of all
beneficiary risk scores. Lastly, we propose to revise Sec. 414.1270,
and Sec. 414.1275(c)(4) and (d)(3) to reflect the proposed changes to
the payment adjustments under the VM for the CY 2018 payment adjustment
period. We seek comments on all of these proposals.

[[Page 41903]]

Table 33--CY 2018 VM Amounts for the Quality-Tiering Approach for
Physicians, PAs, NPs, CNSs, and CRNAs in Groups With Ten or More EPS
------------------------------------------------------------------------
Low Average High
Cost/quality quality quality quality
------------------------------------------------------------------------
Low cost.................................. +0.0% * +2.0x * +4.0x
Average cost.............................. -2.0% +0.0% * +2.0x
High cost................................. -4.0% -2.0% +0.0%
------------------------------------------------------------------------
* Groups eligible for an additional +1.0x if reporting PQRS quality
measures and average beneficiary risk score is in the top 25 percent
of all beneficiary risk scores, where `x' represents the upward
payment adjustment factor.

TABLE 34--CY 2018 VM Amounts for the Quality-Tiering Approach for
Physicians, PAs, NPs, CNSs, and CRNAs in Groups With 2 to 9 EPs and
Physician Solo Practitioners
------------------------------------------------------------------------
Low Average High
Cost/quality quality quality quality
------------------------------------------------------------------------
Low cost.................................. +0.0% * +1.0x * +2.0x
Average cost.............................. -1.0% +0.0% * +1.0x
High cost................................. -2.0% -1.0% +0.0%
------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if
reporting PQRS quality measures and average beneficiary risk score is
in the top 25 percent of all beneficiary risk scores, where `x'
represents the upward payment adjustment factor.

Table 35--CY 2018 VM Amounts for the Quality-Tiering Approach for PAs,
NPS, CNSs, and CRNAs in Groups Consisting of Nonphysician EPs and PAs,
NPs, CNSs, and CRNAs Who Are Solo Practitioners
------------------------------------------------------------------------
Low Average High
Cost/quality quality quality quality
------------------------------------------------------------------------
Low cost.................................. +0.0% *+1.0x *+2.0x
Average cost.............................. +0.0% +0.0% *+1.0x
High cost................................. +0.0% +0.0% +0.0%
------------------------------------------------------------------------
* Groups and solo practitioners are eligible for an additional +1.0x if
reporting PQRS quality measures and average beneficiary risk score is
in the top 25 percent of all beneficiary risk scores, where `x'
represents the upward payment adjustment factor.

Consistent with the policy adopted in the CY 2013 PFS final rule
with comment period (77 FR 69324 through 69325), we note that the
estimated funds derived from the application of the downward
adjustments to groups and solo practitioners in Category 1 and Category
2 would be available to all groups and solo practitioners eligible for
upward adjustments under the VM. Consequently, the upward payment
adjustment factor (``x'' in Tables 33, 34, and 34) would be determined
after the performance period has ended based on the aggregate amount of
downward payment adjustments.
g. Finality of the VM Upward Payment Adjustment Factor
Beginning with the CY 2015 VM (77 FR 69324 through 69325), we
established that the upward payment adjustment factor (``x'') would be
determined after the performance period has ended based on the
aggregate amount of downward payment adjustments. We are also proposing
a similar policy for the CY 2018 VM as discussed in section III.M.4.h.
of this proposed rule. In the interest of providing EPs that are
eligible for an upward payment adjustment under the VM with finality,
and to minimize the cost of reprocessing claims, we propose that we
would not recalculate the upward payment adjustment factor for an
applicable payment adjustment period after the adjustment factor is
made public, unless CMS determines that a significant error was made in
the calculation of the adjustment factor. We seek public comment on
this proposal.
h. Performance Period
In the CY 2014 PFS final rule with comment period (78 FR 74772), we
adopted a policy that we will use performance on quality and cost
measures during CY 2015 to calculate the VM that would apply to items
and services for which payment is made under the PFS during CY 2017.
Likewise, we propose to use CY 2016 as the performance period for the
VM adjustments that will apply during CY 2018. Accordingly, we propose
to add Sec. 414.1215(d) to indicate that the performance period is CY
2016 for VM adjustments made in the CY 2018 payment adjustment period.
We seek comment on this proposal.
i. Quality Measures
In the CY 2015 PFS final rule with comment period (79 FR 67956), we
aligned our policies for the VM for CY 2017 with the PQRS group
reporting mechanisms available to groups in CY 2015 and the PQRS
reporting mechanisms available to individual EPs in CY 2015, such that
data that groups submit for quality reporting purposes through any of
the PQRS group reporting mechanisms in CY 2015 and the data that
individual EPs submit through any of the individual PQRS reporting
mechanisms in CY 2015 will be used for calculating the quality
composite under the quality-tiering approach for the VM for CY 2017.
Moreover, we finalized the use of all of the quality measures that are
available to be reported under these various PQRS reporting mechanisms
to calculate a group or solo practitioner's VM in CY 2017, to the
extent that a group (or individual EPs in the group, in the case of the
``50 percent option'') or solo practitioner submits data on these
measures (79 FR 67956). We also noted that, groups with two or more EPs
can elect to include the patient experience of care measures collected
through the PQRS CAHPS survey for CY 2015 in their VM for CY 2017. We
finalized our policy to continue to include the three outcome measures
in Sec. 414.1230 in the quality measures used for the VM in CY 2017.
These measures are: (1) a composite of rates of potentially preventable
hospital admissions for heart failure, chronic obstructive pulmonary
disease, and diabetes; (2) a composite rate of potentially preventable
hospital admissions for dehydration, urinary tract infections, and
bacterial pneumonia; and (3) rates of an all-cause hospital
readmissions measure (77 FR 69315).
In Sec. 414.1270(c)(4), we finalized that for groups that are
assessed under the ``50 percent option'' for the CY 2017 VM, where all
of the EPs in the group who report as individuals under PQRS do so by
satisfactorily participating in a PQRS QCDR in CY 2015, and we are
unable to receive quality performance data for those EPs, then we will
classify the group's quality composite score as ``average'' under the
quality-tiering methodology. Because this is the same policy as for the
CY 2016 payment adjustment period, we also made a conforming revision
to Sec. 414.1270(b)(4) (79 FR 67956). Moreover, we finalized a policy
that, for groups that are assessed under the ``50 percent option''
where some EPs in the group report data using a QCDR and we are unable
to obtain the data, but other EPs in the group report data using the
other PQRS reporting mechanisms for individuals, then we will calculate
the group's score based on the reported performance data that we obtain
through those other PQRS reporting mechanisms. We finalized a policy
that, beginning with the CY 2014 performance period, measures reported
through a PQRS QCDR that are new to PQRS will not be included in the
quality composite for the VM until such time as we have historical data
to calculate benchmarks for them. Once we have historical data from
measures submitted via QCDRs, the benchmark for quality of care
measures will be the national mean for the measure's performance rate
during the year prior

[[Page 41904]]

to the performance period (79 FR 67956). We finalized a policy,
beginning with the CY 2017 payment adjustment period, to increase the
case minimum from 20 cases to 200 cases for the all-cause hospital
readmissions measure as described in Sec. 414.1230(c) to be included
in the quality composite for the VM. We finalized that we will exclude
the measure from the VM calculation for a group or solo practitioner if
the group or solo practitioner has fewer than 200 cases for the measure
during the relevant performance period, and all remaining measures in
the domain will be given equal weight. We codified this change in the
case minimum at Sec. 414.1265.
(1) PQRS Reporting Mechanisms
It is important to continue to align the VM for CY 2018 with the
requirements of the PQRS, because quality reporting is a necessary
component of quality improvement. We also seek to avoid placing an
undue burden on EPs to report such data. Accordingly, for purposes of
the VM for CY 2018, we propose to continue to include in the VM all of
the PQRS GPRO reporting mechanisms available to groups for the PQRS
reporting periods in CY 2016 and all of the PQRS reporting mechanisms
available to individual EPs for the PQRS reporting periods in CY 2016.
These reporting mechanisms are described in Tables 20 and 21 of this
proposed rule.
(2) PQRS Quality Measures
We propose to continue to use all of the quality measures that are
available to be reported under these various PQRS reporting mechanisms
to calculate a group or solo practitioner's VM in CY 2018 to the extent
that a group (or individual EPs in the group, in the case of the ``50
percent option'') or solo practitioner submits data on these measures.
These PQRS quality measures are described in Tables 22 through 30 of
this proposed rule.
(3) Benchmarks for eCQMs
Currently, the VM program utilizes quality of care measure
benchmarks for a given performance year that are calculated as the
case-weighted mean of the prior year's performance rates, inclusive of
all available PQRS reporting mechanisms for that measure (claims,
registries, Electronic Health Record (EHR), or Web Interface (WI)). We
finalized this policy in CY 2013 and stated we would consider the
effects of our policy as we implemented the VM and that we may consider
changes and refinements in the future (77 FR 69322).
From experience in utilizing PQRS measures in the VM, we have
become aware that a given measure may be calculated differently when it
is collected through an EHR, and are making a proposal to address this
issue. We refer to quality measures collected through EHRs as
``eCQMs.'' We note several variances with eCQMs compared to equivalent
measures reported via a different reporting mechanism. First, the
inclusion of all-payer data for the eCQMs differentiates them
sufficiently from their equivalent measures reported via the other PQRS
reporting mechanisms, which utilize Medicare FFS data. The inclusion of
all-payer data may increase the cohort size and incorporate a pool of
beneficiaries with different characteristics than those captured with
Medicare FFS data. As our goal is to focus on how groups of EPs or
individual EPs' performance differs from the benchmark on a measure-by-
measure basis, we recognize the need to utilize separate eCQM
benchmarks that allow us to compare eCQM measure performance rates to a
benchmark that better reflects the measures' specifications. Second,
eCQMs follow a different annual update cycle than do other versions of
measures, and consequently, they are not always consistent with the
current version of a measure as it is reported via claims, registries,
or Web Interface. For example, during a given performance period, an
eCQM's specifications might require data collection on a different age
range than the specifications of the same measure reported via other
reporting mechanisms. This means that the eCQM version of a measure may
differ from the specifications of the all-mechanism benchmark, to which
it is currently compared. Because of these differences, we propose to
change our benchmark policy to indicate that eCQMs, as identified by
their CMS eMeasure IDs, which are distinct from the CMS/PQRS measure
numbers for other reporting mechanisms, will be recognized as distinct
measures under the VM. As such, we would exclude eCQM measures from the
overall benchmark for a given measure and create separate eCQM
benchmarks, based on the CMS eMeasure ID. We propose to make this
change beginning with the CY 2016 performance period, for which the
eCQM benchmarks would be calculated based on CY 2015 performance data.
We seek comment on this proposal.
(4) CAHPS Reporting
In our efforts to maintain alignment with the PQRS quality
reporting requirements, we note that the criteria for administration of
the CAHPS for PQRS survey for the CY 2016 performance period will
contain 6 months of data as proposed in Section III.I.5.a of this
proposed rule. We believe that the CAHPS for PQRS data administered
during this 6-month period would be sufficiently reliable so that we
could meaningfully include it in a group's quality composite score
under the Value Modifier, should they elect to have CAHPS for PQRS
included in their VM calculation. In order for us to use the data to
calculate the score, we would require data for each summary survey
measure on at least 20 beneficiaries which is the reliability standard
for the value-based payment modifier (77 FR 69322-69323). We note that
we took a similar approach in the CY 2014 PFS Final Rule (78 FR 74772)
with regard to the 6-month reporting period for individual eligible
professionals reporting via qualified registries under PQRS for the CY
2014 PQRS incentive and CY 2016 payment adjustment. Additionally, in
the CY 2015 PFS Final Rule (79 FR 67956), we noted that groups with two
or more EPs could elect to include the patient experience of care
measures collected through the PQRS CAHPS survey for CY 2015 in their
VM for CY 2017. We propose to continue this policy for the CY 2016
performance period for the CY 2018 VM.
(5) Quality Measures for the Shared Savings Program
In the CY 2015 PFS final rule with comment period (79 FR 67957), we
finalized a policy to use the ACO GPRO Web Interface measures and the
Shared Savings Program ACO all-cause readmission measure to calculate a
quality composite score for groups and solo practitioners who
participate in an ACO under the Shared Savings Program. Also, we
finalized a policy to apply the benchmark for quality measures for the
VM as described under Sec. 414.1250 to determine the standardized
score for quality measures for groups and solo practitioners
participating in ACOs under the Shared Savings Program.
We believe patient surveys are important tools for assessing
beneficiary experience of care and outcomes. Accordingly, we are
proposing that starting with the CY 2018 payment adjustment period, the
ACO CAHPS survey will be required as an additional component of the VM
quality composite for TINs participating in the Shared Savings Program.
CAHPS surveys for Shared Savings Program ACOs have been collected since
2013, for the 2012 reporting period. In the 2014 reporting period, we
provided two versions of the CAHPS for ACOs survey to assess patient
experience ACO-8 and ACO-12, with Shared Savings Program ACOs

[[Page 41905]]

having the option to use either survey. We note that under the VM CAHPS
for PQRS is optional for groups that report it and these groups must
elect to have their CAHPS performance used in their VM quality
composite calculations. As both PQRS and Shared Savings Program ACOs
report on CAHPS for their Medicare FFS populations, there is an overlap
between the CAHPS survey data collected for both programs and we have
calculated 2014 performance period prior year benchmarks on 11 of the
12 ACO CAHPS summary survey measures for the VM. We believe that by the
CY 2016 performance period, we will have sufficient data and experience
with calculating these survey measures in the VM, to require the ACO
CAHPS measures in conjunction with the GPRO WI measures and the all-
cause readmission measure in the calculation of a quality composite
score for groups and solo practitioners participating in an ACO under
Shared Savings Program. We propose to include the CAHPS for ACOs survey
in the quality composite of the VM for TINs participating in ACOs in
the Shared Savings Program, beginning with the CY 2016 performance
period and the CY 2018 payment adjustment period. We propose that
whichever version of the CAHPS for ACOs survey the ACO chooses to
administer will be included in the TIN's quality composite for the VM.
We propose to make corresponding changes to Sec. 414.1210(b)(2)(i)(B).
We seek comment on this proposal.
j. Expansion of the Informal Inquiry Process To Allow Corrections for
the Value-Based Payment Modifier
Section 1848(p)(10) of the Act provides that there shall be no
administrative or judicial review under section 1869 of the Act,
section 1878 of the Act, or otherwise of the following:
The establishment of the VM.
The evaluation of the quality of care composite, including
the establishment of appropriate measures of the quality of care.
The evaluation of the cost composite, including the
establishment of appropriate measures of costs.
The dates of implementation of the VM.
The specification of the initial performance period and
any other performance period.
The application of the VM.
The determination of costs.
These statutory requirements regarding limitations of review are
reflected in Sec. 414.1280. We previously indicated in the CY 2013 PFS
final rule with comment period (77 FR 69326) that we believed an
informal review mechanism is appropriate for groups of physicians to
review and to identify any possible errors prior to application of the
VM, and we established an informal inquiry process at Sec. 414.1285.
We stated that we intend to disseminate reports containing CY 2013 data
in Fall 2014 to groups of physicians subject to the VM in 2015 and that
we will make a help desk available to address questions related to the
reports, and we have since followed through on those actions.
In the CY 2015 final rule with comment period (79 FR 67960), for
the CY 2015 payment adjustment period, we finalized: (1) A February 28,
2015, deadline for a group to request correction of a perceived error
made by CMS in the determination of its VM; and (2) finalized a policy
to classify a TIN as ``average quality'' in the event we determined
that we have made an error in the calculation of the quality composite.
Beginning with the CY 2016 payment adjustment period, (1) we finalized
a deadline of 60 days that would start after the release of the QRURs
for the applicable performance period for a group or solo practitioner
to request a correction of a perceived error related to the VM
calculation, and (2) we stated we would take steps to establish a
process for accepting requests from providers to correct certain errors
made by CMS or a third-party vendor (for example, PQRS-qualified
registry). Our intent was to design this process as a means to
recompute a TIN's quality composite and/or cost composite in the event
we determine that we initially made an erroneous calculation. We noted
that if the operational infrastructure was not available to allow this
recomputation, we would continue the approach for the CY 2015 payment
adjustment period to classify a TIN as ``average quality'' in the event
we determine that we have made an error in the calculation of the
quality composite. We finalized that we would recalculate the cost
composite in the event that an error was made in the cost composite
calculation. We noted that we would provide additional operational
details as necessary in subregulatory guidance.
Moreover, for both the CY 2015 payment adjustment period and future
adjustment periods, we finalized a policy to adjust a TIN's quality-
tier if we make a correction to a TIN's quality and/or cost composites
because of this correction process.
We further noted that there is no administrative or judicial review
of the determinations resulting from this expanded informal inquiry
process under section 1848(p)(10) of the Act. In the CY 2015 final rule
for the CY 2016 payment adjustment period we noted that if the
operational infrastructure is not available to allow the recomputation
of quality measure data we would continue the approach of the initial
corrections process to classify a TIN as ``average quality'' in the
event we determine CMS or a third-party vendor made an error in the
calculation of the quality composite. We propose to continue this
policy for the CY 2017 payment adjustment and future adjustment periods
or until such a time that the operational infrastructure is in place to
allow the recomputation of data. We seek comment on this proposal.
Our overall approach to the VM is based on participation in the
PQRS. Beginning with the CY 2016 payment adjustment period for the VM,
groups of physicians (or individual EPs in the group, in the case of
the 50 percent option) must meet the criteria to avoid the CY 2016 PQRS
payment adjustment, to be classified as Category 1 for the VM and avoid
an automatic downward adjustment under the VM. The payment adjustment
for the VM is applied at the TIN level whereas the PQRS payment
adjustment is applied at the TIN/NPI level. We believe that we need a
policy to address the circumstance in which a group is initially
determined not to have met the criteria to avoid the PQRS payment
adjustment and subsequently, through the informal review process, at
least 50 percent of its EPs are determined to have met the criteria to
avoid the PQRS payment adjustment as individuals. We note that the
informal review submission period will occur during the 60 days
following release of the QRURs for the 2016 VM and subsequent years. We
believe that this will allow us sufficient time to process the majority
of the requests before finalizing the adjustment factor. We propose to
reclassify a TIN as Category 1 when PQRS determines on informal review
that at least 50 percent of the TIN's EPs meet the criteria for
satisfactory reporting of data on PQRS quality measures as individuals
for the relevant CY PQRS payment adjustment, or in lieu of satisfactory
reporting, satisfactorily participate in a PQRS QCDR for the relevant
CY PQRS payment adjustment. Moreover, we note that if the group was
initially classified as Category 2, then we do not expect to have data
for calculating their quality composite, in which case they'd be
classified as ``average quality'', however, if the data is available in
a timely manner, then we would recalculate the quality composite. We
seek comments on this proposal.

[[Page 41906]]

k. Minimum Episode Count for the Medicare Spending Per Beneficiary
(MSPB) Measure
In the CY 2014 PFS final rule with comment period (78 FR 74780), we
finalized inclusion of the MSPB measure as proposed in the cost
composite beginning with the CY 2016 VM, with a CY 2014 performance
period. We finalized a minimum of 20 MSPB episodes for inclusion of the
MSPB measure in a TIN's cost composite. We stated that the
nonspecialty-adjusted version of the measure using 2011 data had high
reliability with a 20 episode minimum (79 FR 74779).
The reliability results presented in the CY 2014 PFS final rule
with comment period (79 FR 74779), which supported the 20 episode case
minimum, were based on the non-specialty-adjusted measure instead of
the specialty-adjusted measure. We refined the methodology to account
for the change in measure specifications and the results showed that
the specialty-adjusted measure was more reliable at higher episode case
minimums. Using a more appropriate methodology for calculating
reliability, we have found that the specialty-adjusted measure does not
have moderate or high reliability with a 20 episode minimum for many
groups. Table 36 shows the reliability of the measure for different
group sizes as the case minimum increases.

Table 36--Specialty-Adjusted MSPB Amount, Percent Above 0.4 Reliability Threshold
--------------------------------------------------------------------------------------------------------------------------------------------------------
All solo
Specialty-adjusted MSPB amount practitioners and Solo Groups with 2-9 Groups with 10- Groups with 25- Groups with 100+
groups practitioners EPs 24 EPs 99 EPs EPs
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 20+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4..................... 40.1% 18.1% 41.7% 60.9% 66.5% 89.7%
Number of groups...................... 29,190 10,639 10,505 3,664 3,229 1,153
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 50+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4..................... 80.2% 60.8% 79.0% 90.3% 91.6% 97.0%
Number of groups...................... 15,881 3,406 6,194 2,699 2,499 1,083
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 60+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4..................... 86.8% 71.9% 84.6% 93.8% 94.7% 98.3%
Number of groups...................... 13,614 2,416 5,279 2,506 2,352 1,061
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 75+ Episodes.........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4..................... 92.9% 82.4% 91.1% 96.6% 97.3% 98.8%
Number of groups...................... 11,213 1,567 4,182 2,256 2,173 1,035
--------------------------------------------------------------------------------------------------------------------------------------------------------
Groups and Solo Practitioners with 100+ Episodes........................................................................................................
--------------------------------------------------------------------------------------------------------------------------------------------------------
Percent above 0.4..................... 97.6% 93.8% 96.3% 98.6% 99.2% 99.5%
Number of groups...................... 8,543 785 2,873 1,924 1,957 1,004
--------------------------------------------------------------------------------------------------------------------------------------------------------

Given that the measure has moderate reliability (above 0.4) for
only 40.1 percent of all groups and solo practitioners and is as low as
18.1 percent for solo practitioners with an episode minimum of 20, we
propose to increase the episode minimum to 100 episodes beginning with
the CY 2017 payment adjustment period and CY 2015 performance period.
Although this reduces the number of groups and solo practitioners for
whom we would be able to include an MSPB calculation in the cost
composite (from 29,190 to 8,543 based on 2013 data), we do not believe
we should use the measure in calculating the cost composite if it is
not reliable at the 20 episode minimum. We note that this change in
policy could create a situation in which a group that would have
performed well on this measure would no longer have this measure
included in its cost composite, which could negatively impact their
cost composite, and ultimately their VM adjustment. However, we believe
that it would not be appropriate to include this measure in the cost
composite even for those groups that performed well. Rather, we believe
that it is more important to ensure that only reliable measures are
included in the VM, and we want to avoid a situation in which groups or
solo practitioners who may have performed poorly on the measure using a
20 episode minimum may receive a downward adjustment to payments under
the VM as a result of a measure that was not reliable. We propose to
add Sec. 414.1265(a)(2) to reflect a case minimum of 100 episodes for
the MSPB measure. We are seeking comment on this proposal.
We also considered increasing the episode minimum to 75 instead of
100. This would allow us to include the MSPB measure in the cost
composite for a larger number of groups but we believe that the
reliability for solo practitioners with a minimum of 100 episodes was
preferable to the reliability when using a 75 episode minimum. We
welcome comment on this alternative we considered, as well as other
potential minimum case thresholds for this measure.
We also considered revising the case minimum for the MSPB measure
beginning with the CY 2016 payment adjustment period and CY 2014
performance period, but did not propose this policy, because this PFS
rule will be finalized after the 2014 QRURs with the 2016 VM payment
adjustment information are released. We note that, using an episode
minimum of 20 for the 2016 VM, the MSPB measure has moderate
reliability for majority of the groups that will be subject to the VM
in 2016 (60.9 percent of groups with 10-24 EPs, 66.5 percent of groups
with 25-99 EPs and 89.7 percent of groups with 100 or more EPs).
l. Inclusion of Maryland Hospital Stays in Definition of Index
Admissions
In the CY 2014 PFS final rule with comment period (78 FR 74780), we
finalized inclusion of the MSPB

[[Page 41907]]

measure as proposed in the cost composite beginning with the CY 2016
VM, with a CY 2014 performance period. We indicated in the 2014
proposed rule with comment period (78 FR 43494) that we would use the
MSPB measure as specified for the Hospital Inpatient Quality Reporting
(IQR) and Hospital Value Based Purchasing (VBP) Program with the
exception of changes to the attribution methodology. The MSPB measure
used for the Hospital IQR and Hospital VBP Programs does not include
hospitalizations at Maryland hospitals as an index admission that would
trigger an episode because Maryland hospitals are not paid under the
Inpatient Prospective Payment System (IPPS) and do not participate in
the Hospital VBP Program. The result is that groups and solo
practitioners in Maryland would not have the MSPB measure included in
their cost composite under the Value Modifier. We propose that,
beginning with the 2018 VM, we change the definition of index admission
used for the MSPB used in the VM program to include inpatient
hospitalizations at Maryland hospitals. This change would allow CMS to
include this measure in the calculation of the cost composite for
groups and solo practitioners in Maryland, consistent with what is done
for providers in others states. Under this proposal, we would continue
to standardized all Medicare claims as described in the ``CMS Price
Standardization'' document, which can be found in the ``Measure
Methodology'' section at http://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996. The standardization methodology is currently used in the
calculation of the MSPB measure and is continually being reviewed and
updated to account payment policy changes and updates; any
methodological changes made across years are documented in the Appendix
of the ``CMS Price Standardization'' document. We are seeking comment
on our proposal to, beginning with the 2018 VM, include
hospitalizations at Maryland hospitals as an index admission for the
MSPB measure for the purposes of the VM program.
m. Average Quality and Average Cost Designations in Certain
Circumstances
In the CY 2015 PFS final rule with comment period (79 FR 67934), we
clarified a policy that was finalized at Sec. 414.1270, that beginning
with the CY 2016 payment adjustment period, a group or solo
practitioner subject to the VM would receive a cost composite score
that is classified as average under the quality-tiering methodology if
the group or solo practitioner does not have at least one cost measure
with at least 20 cases. We observed that groups that do not provide
primary care services are not attributed beneficiaries or are
attributed fewer than 20 beneficiaries, and thus, we are unable to
calculate reliable cost measures for those groups of physicians (77 FR
69323). We stated in the CY 2014 PFS final rule with comment period (78
FR 74780) that we believe this policy is reasonable because we would
have insufficient information on which to classify the groups' costs as
``high'' or ``low'' under the quality-tiering methodology. Moreover, we
believed that to the extent a group's quality composite is classified
as high or low, the group's VM should reflect that classification. As
discussed in section III.M.4.k. of this proposed rule, beginning with
the CY 2017 payment adjustment period, we are proposing to increase the
minimum number of episodes for inclusion of the MSPB measure in the
cost composite to 100 episodes. Therefore, we propose to revise Sec.
414.1265(b) to indicate that a group or solo practitioner subject to
the VM would receive a cost composite score that is classified as
average under the quality-tiering methodology if the group or solo
practitioner does not have at least one cost measure that meets the
minimum number of cases required for the measure to be included in the
calculation of the cost composite, as required in Sec. 414.1265. To
improve the organization of the regulation text, we also propose to
move the provisions at Sec. 414.1270(b)(5) and (c)(5) to Sec.
414.1265(b)(3).
The quality composite score calculated for each group and solo
practitioner subject to the VM is based on the PQRS measures reported
by the group or solo practitioner and three claims-based outcome
measures, as described in Sec. 414.1225 and Sec. 414.1230,
respectively. A quality measure must have 20 or more cases in order to
be included in the calculation of the quality composite; however,
beginning with the CY 2017 payment adjustment period, the all-cause
hospital readmissions measure must have 200 or more cases in order to
be included. Section 414.1265(a) describes the minimum number of cases
required for the quality and cost measures to be included in the
calculation of the quality and cost composites, respectively. We
believe it is important to have a policy to determine the designation
of the quality composite when a quality measure cannot be calculated
reliably that is similar to the one established for the cost composite.
Therefore, we propose that beginning in the CY 2016 payment adjustment
period, a group or solo practitioner subject to the VM would receive a
quality composite score that is classified as average under the
quality-tiering methodology if the group or solo practitioner does not
have at least one quality measure that meets the minimum number of
cases required for the measure to be included in the calculation of the
quality composite, as required at Sec. 414.1265. Consequently, to the
extent a group or solo practitioner's cost composite is classified as
high, average, or low, the group or solo practitioner's VM would
reflect that classification. We propose to incorporate this proposal at
Sec. 414.1265(b)(2).
Current Sec. 414.1265(b) states that in a performance period, if a
reliable quality of care composite or cost composite cannot be
calculated, payments will not be adjusted under the VM. In light of our
proposals discussed in this section of the proposed rule, we do not
believe this policy is necessary beginning with the CY 2016 payment
adjustment period. As proposed above, the cost composite for a group or
solo practitioner would be classified as average if there is not at
least one cost measure that can be calculated reliably. Furthermore, we
are proposing that the quality composite for a group or solo
practitioner would be classified as average if there is not at least
one quality measure that can be calculated reliably. Therefore, we
propose to specify in Sec. 414.1265(b)(1) that this policy was
applicable only for the CY 2015 payment adjustment period.
n. Technical Changes to the ``Benchmarks for Cost Measures'' Section of
Regulation Text
In the CY 2014 PFS final rule with comment period (78 FR 74781 to
74784), we finalized a policy to use the specialty adjustment method to
create the standardized score for each group's cost measure beginning
with the CY 2016 VM that refines the peer group methodology to account
for specialty mix. We also amended Sec. 414.1255 to include this
policy in the cost composite methodology. We propose to move Sec.
414.1255(b) and (c) (describing specialty adjustment of cost measures
and benchmarks for cost measures) to Sec. 414.1235(c)(4) and (5) (Cost
measure adjustments) and revise the regulation text to align with the
specialty adjustment methodology finalized in the CY 2014 PFS final
rule with comment period. This is a technical change to the

[[Page 41908]]

regulation text only and will not impact how the cost measures will be
specialty-adjusted beginning with the CY 2016 VM.
For the CY 2015 VM, the peer group for calculating the benchmarks
for cost measures was all groups of physician to which beneficiaries
are attributed and that are subject to the VM (for example, for CY
2015, the cost measures of groups with 100 or more EPs was compared to
the cost measures of other groups of 100 or more EPs). About the
specialty adjustment method, we stated in the CY 2014 PFS final rule
(78 FR 74783) that this methodology creates one national benchmark for
each cost measure against which all groups (regardless of size) would
be assessed in creating the group's standardized score. We did not
codify this policy in the regulation text in the CY 2014 PFS final rule
with comment period. We also note that the benchmark for a cost measure
includes the performance data for groups and solo practitioners that
meet the minimum number of cases for that measure as described under
Sec. 414.1265(a). We believe this policy ensures that only the data
for measures that are considered statistically reliable are included in
the benchmarks, in addition to being included in the calculation of the
cost composite. Therefore, we propose to codify at Sec. 414.1255(b)
that beginning with the CY 2016 payment adjustment period, the
benchmark for each cost measure is the national mean of the performance
rates calculated for all groups and solo practitioners that meet the
minimum number cases for that measure under Sec. 414.1265(a). We note
that we are not proposing any revisions to the specialty adjustment
method finalized in the CY 2014 PFS final rule with comment period (78
FR 74781 through 74784).
o. Discussion of Stratification of Cost Measure Benchmarks by
Beneficiary Risk Score
In response to our previously-finalized policies, stakeholders have
suggested that the CMS-hierarchical condition categories (HCC) Risk
Adjustment methodology used in the total per capita cost measures for
the VM does not accurately capture the additional costs associated with
treating the sickest beneficiaries. Some of these commenters stated
that groups that work exclusively in post-acute and long-term care
settings would be unable to perform well on cost measures under the
current methodology. Another commenter stated that beneficiaries who
receive care at home typically have high HCC scores and higher costs.
We appreciate the concerns raised by commenters and agree that it is
important to make adjustments for differences in beneficiary
characteristics that impact health and cost outcomes and are outside of
the control of the provider. We continue to believe that our current
methodology of using HCC scores that include adjustments for Medicare
and Medicaid eligibility status in addition to diagnoses, and replacing
the highest 1 percent of costs with the cost of the 99th percentile for
the highest cost beneficiaries, help address these concerns. To address
concerns regarding specialties that might routinely treat more complex
and consequently more costly beneficiaries, we finalized in the CY 2013
PFS final rule with comment period that we would apply a specialty
adjustment to all cost measures used in the VM (78 FR 74776). This
enables groups' costs to be compared to similarly-comprised groups,
based on specialty.
We note that high costs within the post-acute and long-term care
settings present a unique opportunity for these providers to improve
performance on cost and quality measures. Although we continue to
encourage providers to report quality measures for patients in these
settings and to use the information contained in their QRUR to improve
and achieve high levels of performance, we stated in the CY 2015 PFS
final rule with comment period (79 FR 67932) that we would continue to
monitor these groups and solo practitioners' performance under the VM
and continue to explore potential risk adjustment refinements. One
option we are considering would be to stratify the cost measure
benchmarks so that groups and solo practitioners are compared to other
groups and individual practitioners treating beneficiaries with similar
risk profiles. In this way, within a given grouping (for example, a
quartile or decile), there remains an opportunity to gain efficiencies
in care and lower costs, while beneficiary severity of illness and
practice characteristics may be more fully recognized at a smaller, and
likely less-heterogeneous, attributed beneficiary level. We are not
making any proposals on this matter at this time. We are seeking
feedback on this potential approach as well as other approaches..
5. Physician Feedback Program
a. CY 2014 Quality and Resource Use Reports (QRURs) Based on CY 2014
Data and Disseminated in CY 2015
In Fall 2015, we plan to expand the Physician Feedback Program by
making QRURs, containing data on cost and quality performance during
calendar year 2014, available to all solo practitioner EPs and groups
of EPs of all sizes, as identified by TIN, including nonphysician EP
solo practitioners and groups comprised of nonphysician EPs. We also
plan to make the 2014 QRURs available to Shared Savings Program ACO
participant TINs and groups that include one or more EPs who
participated in a Pioneer ACO or the CPC Initiative. The reports will
contain valuable information about a TIN's actual performance during CY
2014 on the quality and cost measures that will be used to calculate
the CY 2016 VM. For physicians in groups of 10 or more, the 2014 QRURs
will provide information on how a group's quality and cost performance
will affect their Medicare payments in 2016 through the application of
the VM based on performance in 2014.
The report will provide data on a group's or solo practitioner's
performance on quality measures they report under the PQRS, as well as
the three claims-based outcome measures calculated for the VM and
described at Sec. 414.1230. The 2014 QRUR will accommodate new PQRS
reporting options, including QCDRs and CAHPS for PQRS. In addition, the
reports will present data assessing a group practice's or solo
practitioner's performance on cost measures and information about the
services and procedures that contributed most to costs. The cost
measures in the 2014 QRUR are payment-standardized and risk-adjusted
and are also specialty-adjusted to reflect the mix of physician
specialties in a TIN. For the 2014 QRURs, we will provide more detailed
per capita cost of service breakdowns for all six cost measures. The
reports also will contain additional supplementary information on the
individual PQRS measures for EPs reporting PQRS measures as
individuals; enhanced drill down tables; and a dashboard with key
performance measures.
In response to stakeholder feedback to provide more timely and
actionable information on outcomes and cost measures, we provided for
the first time a mid-year report, the 2014 Mid-Year QRUR (MYQRUR) in
Spring 2015. The 2014 MYQRUR was provided to physician solo
practitioners and groups of physicians nationwide who billed for
Medicare-covered services under a single TIN over the period of July 1,
2013 through June 30, 2014. We disseminated Mid-Year QRURs in the
spring of each year to provide interim information about performance
only on those cost and quality outcomes measures that we calculate
directly from Medicare administrative claims, based

[[Page 41909]]

on the most recent 12 months of data that are available. The MYQRURs
are for informational purposes and do not estimate performance for the
calculation of the VM. Beginning in Spring 2016, we intend to expand
the distribution of MYQRURs to nonphysician EPs, solo practitioners,
and groups composed of nonphysician EPs.
We will continue to refine the QRURs based on stakeholder feedback,
and we invite comment on which aspects of the QRURs reports have been
most useful and how we can improve access to and actionability of
performance reports.
b. Episode Costs and the Supplemental QRURs
Section 1848(n)(9)(A) of the Act requires CMS to develop an episode
grouper and include episode-based costs in the QRURs. An episode of
care consists of medical and/or procedural services that address a
specific medical condition or procedure that are delivered to a patient
within a defined time period and are captured by claims data. An
episode grouper organizes administrative claims data into episodes.
In Summer 2014, we distributed the Supplemental QRUR: Episodes of
Care based on 2012 data to groups with 100 or more EPs. The 2012
Supplemental QRUR provided information on 20 episode subtypes and 6
clinical episode-based measures. In Fall 2015, we expect to provide the
2014 Supplemental QRURs to all groups and solo practitioners nationwide
who billed for Medicare-covered services under a single TIN in 2014 and
for whom we are able to calculate at least one episode measure. The
supplemental QRURs are provided in addition to the Annual and Mid-Year
QRURs. They provide information on performance on episode-based cost
measures that are not included in the VM, in order to help groups and
solo practitioners understand the cost of care they provide to
beneficiaries and work toward the provision of more efficient care. The
2014 Supplemental QRURs will likely include the 6 episode-based
measures included in the 2012 Supplemental QRURS in addition to other
episode-based payment measures. We will continue to seek stakeholder
input as we develop the episode framework.
Lastly, we would to direct readers to the Physician Compare
proposals in this rule (section III.H.), which propose the addition of
a green check mark to the profile page of the Physician Compare Web
site for providers receiving an upward adjustment under the VM starting
in CY 2018. CY 2018 is the first year the VM applies to not only all
physicians, but also all nonphysician EPs as well. More information is
available about Physician Compare on the CMS Web site at http://www.medicare.gov/physiciancompare/search.html.

N. Physician Self-Referral Updates

1. Background
a. Statutory and Regulatory History
Section 1877 of the Act, also known as the physician self-referral
law: (1) Prohibits a physician from making referrals for certain
designated health services (DHS) payable by Medicare to an entity with
which he or she (or an immediate family member) has a financial
relationship (ownership or compensation), unless an exception applies;
and (2) prohibits the entity from filing claims with Medicare (or
billing another individual, entity, or third party payer) for those
referred services. The statute establishes a number of specific
exceptions, and grants the Secretary the authority to create regulatory
exceptions for financial relationships that pose no risk of program or
patient abuse. Section 13624 of the Omnibus Budget Reconciliation Act
of 1993 (Pub. L. 103-66) (OBRA 1993), entitled ``Application of
Medicare Rules Limiting Certain Physician Referrals,'' added a new
paragraph (s) to section 1903 of the Act, to extend aspects of the
physician self-referral prohibitions to Medicaid. For additional
information about section 1903(s) of the Act, see 66 FR 857 through
858.
Several more recent statutory changes have also affected the
physician self-referral law. Section 6001 of the Affordable Care Act
amended section 1877 of the Act to impose additional requirements for
physician-owned hospitals to qualify for the rural provider and
hospital ownership exceptions. Section 6409 of the Affordable Care Act
required the Secretary, in cooperation with the Inspector General of
the Department of Health and Human Services, to establish a Medicare
self-referral disclosure protocol (SRDP) that sets forth a process to
enable providers of services and suppliers to self-disclose actual or
potential violations of the physician self-referral law.
This rulemaking follows a history of rulemakings related to the
physician self-referral law. The following discussion provides a
chronology of our more significant and comprehensive rulemakings; it is
not an exhaustive list of all rulemakings related to the physician
self-referral law. After the passage of section 1877 of the Act, we
proposed rulemakings in 1992 (related only to referrals for clinical
laboratory services) (57 FR 8588) (the 1992 proposed rule) and 1998
(addressing referrals for all DHS) (63 FR 1659) (the 1998 proposed
rule). We finalized the proposals from the 1992 proposed rule in 1995
(60 FR 41914) (the 1995 final rule), and issued final rules following
the 1998 proposed rule in three stages. The first final rulemaking
(Phase I) was published in the Federal Register on January 4, 2001 (66
FR 856) as a final rule with comment period. The second final
rulemaking (Phase II) was published in the Federal Register on March
26, 2004 (69 FR 16054) as an interim final rule with comment period.
Due to a printing error, a portion of the Phase II preamble was omitted
from the March 26, 2004 Federal Register publication. That portion of
the preamble, which addressed reporting requirements and sanctions, was
published on April 6, 2004 (69 FR 17933). The third final rulemaking
(Phase III) was published in the Federal Register on September 5, 2007
(72 FR 51012) as a final rule.
In addition to Phase I, Phase II, and Phase III, we issued final
regulations on August 19, 2008 in the ``Changes to the Hospital
Inpatient Prospective Payment Systems and Fiscal Year 2009 Rates''
final rule with comment period (72 FR 48434) (the FY 2009 IPPS final
rule). That rulemaking made various revisions to the physician self-
referral regulations, including: (1) Revisions to the ``stand in the
shoes'' provisions; (2) establishment of provisions regarding the
period of disallowance and temporary noncompliance with signature
requirements; and (3) expansion of the definition of ``entity.''
After passage of the Affordable Care Act, we issued final
regulations on November 29, 2010 in the CY 2011 PFS final rule with
comment period (75 FR 73170) that codified a disclosure requirement
established by the Affordable Care Act for the in-office ancillary
services exception. We also issued final regulations on November 24,
2010 in the CY 2011 OPPS final rule with comment period (75 FR 71800),
on November 30, 2011 in the CY 2012 OPPS final rule with comment period
(76 FR 74122), and on November 10, 2014 in the CY 2015 OPPS final rule
with comment period (79 FR 66770) that established or revised certain
regulatory provisions concerning physician-owned hospitals in order to
codify and interpret the Affordable Care Act's revisions to section
1877 of the Act.
b. Purpose of This Proposed Rule
This rule would update the physician self-referral regulations to
accommodate

[[Page 41910]]

delivery and payment system reform, to reduce burden, and to facilitate
compliance. We have learned from stakeholder inquiries, review of
relevant literature, and self-disclosures submitted to the SRDP that
additional clarification of certain provisions of the physician self-
referral law would be helpful. In addition to clarifying the
regulations, we are also interested in expanding access to needed
health care services. In keeping with these goals, the proposed rule
expands the regulations to establish two new exceptions and clarifies
certain regulatory terminology and requirements.
2. Recruitment and Retention (Sec. 411.357(e) and Sec. 411.357(t))
In this proposed rule, we are proposing to establish new policies
and revise certain existing policies regarding recruitment assistance
and retention payments. Specifically, we are proposing a new exception
for assistance to physicians to employ nonphysician practitioners. In
addition, we are proposing to clarify for federally qualified health
centers (FQHCs) and rural health clinics (RHCs) how to determine the
geographic areas that they serve for purposes of the exception at Sec.
411.357(e) and to change the language at Sec. 411.357(e)(1)(iii) to
ensure the consistency we intend for the ``volume or value'' standard
found throughout the statute and our regulations. We are also proposing
to lengthen the required record retention period at Sec.
411.357(e)(4)(iv) from 5 years to 6 years to ensure consistency with
the proposed exception at Sec. 411.357(x) and other CMS record
retention policies. For the exception for retention payments to
physicians in underserved areas, we are proposing to clarify how
parties should calculate the maximum amount for permissible retention
payments. We describe these proposals in detail below.
a. Assistance To Employ a Nonphysician Practitioner
(1) Background
Section 1877(e)(5) of the Act sets forth an exception for
remuneration provided by a hospital to a physician to induce the
physician to relocate to the geographic area served by the hospital in
order to be a member of the hospital's medical staff, subject to
certain requirements. This exception is codified at Sec. 411.357(e).
The regulatory exception permits recruitment payments by FQHCs and RHCs
on the same basis as those permitted by hospitals, but like the
statute, limits the applicability of the exception to the recruitment
of physicians. In Phase III, we responded to requests by commenters
that we expand Sec. 411.357(e) to cover the recruitment of
nonphysician practitioners into a hospital's service area, including
into an existing group practice (72 FR 51049). We declined to establish
a new exception at that time. Further, we indicated that
``[r]ecruitment payments made by a hospital directly to a nonphysician
practitioner would not implicate the physician self-referral law,
unless the nonphysician practitioner serves as a conduit for physician
referrals or is an immediate family member of a referring physician.
Payments made by a hospital to subsidize a physician practice's costs
of recruiting and employing nonphysician practitioners would create a
compensation arrangement between the hospital and the physician
practice for which no exception would apply'' (72 FR 51049).
Significant changes in our health care delivery and payment
systems, as well as alarming trends in the primary care workforce
shortage projections, have occurred since the publication of Phase III.
A primary care workforce shortage has been a concern for years. (See
Advisory Committee on Training in Primary Care Medicine and Dentistry,
``Coming Home: the Patient-Centered Medical-Dental Home in Primary Care
Training,'' 7th annual report to the Secretary of the U.S. Department
of Health and Human Services and to Congress, December 2008, http://www.hrsa.gov/advisorycommittees/bhpradvisory/actpcmd/Reports/seventhreport.pdf.) The Affordable Care Act expanded access to health
care coverage to those previously uninsured. As a result, the need for
primary care providers (including nonphysician practitioners) has
increased, particularly in remote and underserved areas. (See Ewing,
Joshua, et al., ``Meeting the Primary Care Needs of Rural America:
Examining the Role of Non-Physician Providers,'' National Conference of
State Legislatures, The Rural Health Connection, April 2013, http://www.ncsl.org/documents/health/RuralBrief313.pdf.) The projected rise in
the demand for primary care is due also to a growing and aging
population, according to the Health Resources and Services
Administration (HRSA). (See HHS, HRSA, National Center for Health
Workforce Analysis, ``Projecting the Supply and Demand for Primary Care
Practitioners Through 2020,'' November 2013, http://bhpr.hrsa.gov/healthworkforce/supplydemand/usworkforce/primarycare/.) HRSA found that
``the demand for primary care physicians will grow more rapidly than
physician supply, resulting in a projected shortage of more than 20,000
full-time equivalent physicians.'' (Id.) Similarly, a study in the
Annals of Family Medicine journal projected the country will need
52,000 more primary care physicians by 2025. (Peterson, Stephen M., et
al, ``Projecting US Primary Care Physician Workforce Needs: 2010-
2025,'' 29 10(6) Ann. Of Fam. Med. 503 (2012).) Nonphysician
practitioners, the fastest growing segment of the primary care
workforce (Schwartz, Mark D., ``Health Care Reform and the Primary Care
Workforce Bottleneck,'' 27(4) J. Gen. Intern. Med. 469, 470 (2011)),
may help to mitigate this shortage. Finally, new and evolving care
delivery models, which feature an increased role for nonphysician
practitioners (often as care coordination facilitators or in team-based
care) have been shown to improve patient outcomes while reducing costs,
both of which are important Department goals as we move further toward
quality- and value-based purchasing of health care services in the
Medicare program and the health care system as a whole.
(2) New Exception
In light of the changes in the health care delivery and payment
systems since we last considered the issue of nonphysician practitioner
recruitment assistance to physicians, using the authority granted to
the Secretary in section 1877(b)(4) of the Act, we are proposing a
limited exception for hospitals, FQHCs, and RHCs that wish to provide
remuneration to a physician to assist with the employment of a
nonphysician practitioner. We believe that this exception is timely,
will promote beneficiary access to care, and will remove barriers that
could frustrate certain goals of the Affordable Care Act. When
structured with the safeguards described below, we do not believe that
arrangements for assistance to physicians to employ nonphysician
practitioners pose a risk of program or patient abuse.
We propose to establish a new exception at Sec. 411.357(x) to
permit remuneration from a hospital, FQHC, or RHC to a physician to
assist the physician in employing a nonphysician practitioner in the
geographic area served by the hospital, FQHC, or RHC providing the
remuneration. Because the physician self-referral law applies to
financial relationships between physicians and entities furnishing DHS,
the proposed exception is not structured to apply to remuneration from
a hospital, FQHC, or RHC to a group practice or other type of physician

[[Page 41911]]

practice (both of which qualify as a ``physician organization,'' as
defined at Sec. 411.351) . However, under our regulations at Sec.
411.354(c), remuneration from an entity furnishing DHS to a physician
organization would be deemed to be a direct compensation arrangement
between each physician who stands in the shoes of the physician
organization and the entity furnishing DHS. A ``deemed'' direct
compensation arrangement must satisfy the requirements of an applicable
exception if the physician makes referrals to the DHS entity and the
DHS entity bills the Medicare program for DHS furnished as a result of
the physician's referrals. The proposed exception would be available to
protect a direct compensation arrangement between a hospital, FQHC, or
RHC providing remuneration to an individual physician, as well as
``deemed'' direct compensation arrangements between a hospital, FQHC,
or RHC and the physicians standing in the shoes of the physician
organization to which the hospital, FQHC, or RHC provided the
remuneration. Parties would also need to apply the rules regarding
indirect compensation arrangements at Sec. 411.354(c) to any chain of
financial relationships that runs between the entity furnishing DHS and
any physician who does not stand in the shoes of the physician
organization in order to determine whether an indirect compensation
arrangement exists. If an indirect compensation arrangement exists as a
result of remuneration provided by the entity furnishing DHS, it must
satisfy the requirements of the exception at Sec. 411.357(p) for
indirect compensation arrangements.
The proposed exception would apply only where the nonphysician
practitioner is a bona fide employee of the physician receiving the
remuneration from the hospital (or of the physician's practice) and the
purpose of the employment is to provide primary care services to
patients of the physician practice. We believe that employing a
nonphysician practitioner (rather than merely contracting on an
independent basis with a nonphysician practitioner) indicates a
commitment by the physician to increase the availability of patient
care services to his or her patients on an ongoing basis and, as such,
is an important safeguard against program and patient abuse. However,
we are soliciting comments regarding whether we should also permit
remuneration to physicians to assist in attracting nonphysician
practitioners to their medical practices in an independent contractor
capacity, and, if so, what requirements we should include for such
arrangements (for example, a requirement that the arrangement between
the physician and the nonphysician practitioner have a minimum term,
such as 1 year).
Because our goal in proposing the exception at Sec. 411.357(x) is
to promote the expansion of access to primary care services--which we
consider to include general family practice, general internal medicine,
pediatrics, geriatrics, and obstetrics and gynecology patient care
services--we are proposing to define ``nonphysician practitioner,'' for
purposes of this exception, to include only physician assistants, nurse
practitioners, clinical nurse specialists, and certified nurse
midwives. We believe that these are the types of nonphysician
practitioners that furnish ``primary care services.'' We note that the
exception would not protect arrangements for assistance to a physician
to employ a certified registered nurse anesthetist. We solicit comments
regarding whether there is a compelling need to expand the scope of the
proposed exception to additional types of nonphysician practitioners
who furnish primary care services.
We are also proposing at Sec. 411.357(x)(1)(vi) a requirement that
the nonphysician practitioner provide only primary care services to
patients of the physician's practice. As noted, we consider general
family practice, general internal medicine, pediatrics, geriatrics, and
obstetrics and gynecology patient care services to be ``primary care
services.'' Thus, the exception would not protect arrangements for
assistance to a physician to employ a nonphysician practitioner who
furnishes specialty care services, such as cardiology or surgical
services, to the physician practice's patients. We solicit comments
regarding whether we should consider other, more, or fewer types of
services to be ``primary care services'' for purposes of proposed Sec.
411.357(x), whether there is a compelling need to expand the scope of
the proposed exception to nonphysician practitioners who provide
services that are not considered ``primary care services'' and, if so,
safeguards that could be included in a final exception to ensure no
risk of program or patient abuse. We are proposing two alternatives for
establishing the minimum amount of primary care services furnished to
patients of the physician's practice by the nonphysician practitioner:
(1) At least 90 percent of the patient care services furnished by the
nonphysician practitioner must be primary care services; or (2)
substantially all of the patient care services furnished by the
nonphysician practitioner must be primary care services. We would
define ``substantially all'' patient care services consistent with our
regulations; that is, at least 75 percent of the nonphysician
practitioner's services to patients of the physician's practice must be
primary care services. (See Sec. 411.352(d) and Sec. 411.356(c)(1).)
We are soliciting comments regarding which of these alternatives is
most appropriate and the nature of the documentation necessary to
measure the nonphysician practitioner's services.
We do not intend to permit remuneration to physicians through
ongoing or permanent subsidies of their nonphysician practitioner
employment and other practice costs. Therefore, we are proposing a cap
on the amount of remuneration from the hospital to the physician and a
requirement that the hospital may not provide assistance for a period
longer than the first 2 consecutive years of the nonphysician
practitioner's employment by the physician. Under proposed Sec.
411.357(x)(1)(iii), the amount of remuneration from the hospital, FQHC,
or RHC would be capped at the lower of: (1) 50 percent of the actual
salary, signing bonus, and benefits paid by the physician to the
nonphysician practitioner; or (2) an amount calculated by subtracting
the receipts attributable to services furnished by the nonphysician
practitioner from the actual salary, signing bonus, and benefits paid
to the nonphysician practitioner by the physician. We propose to
interpret ``benefits'' to include only health insurance, paid leave,
and other routine non-cash benefits offered to similarly situated
employees of the physician's practice. We believe that requiring a
physician who receives assistance to employ a nonphysician practitioner
to contribute to the costs of the nonphysician practitioner's salary
and benefits would limit any windfall to the physician that could
influence the physician's decision whether to refer patients to the
hospital, FQHC, or RHC providing the assistance. Limiting the
remuneration from the hospital, FQHC, or RHC to the ``actual'' amount
paid to the nonphysician practitioner should ensure that the
nonphysician practitioner is the true beneficiary of the arrangement
between the physician the hospital, FQHC, or RHC providing the subsidy.
We recognize that there may be income tax implications for the
physician receiving the remuneration from the hospital, FQHC, or RHC.
Because the proposed exception would protect only

[[Page 41912]]

remuneration to reimburse a physician for amounts actually paid to the
nonphysician practitioner, the hospital, FQHC, or RHC providing the
remuneration could not increase it to account for any tax implications
to the physician. We seek comments regarding the cap on the amount of
remuneration in the proposed exception, including whether the offset of
receipts attributable to services furnished by the nonphysician
practitioner should include all receipts for all services furnished by
the nonphysician practitioner, regardless of payor and regardless of
whether the services were primary care services. We also seek comments
regarding whether we should structure the exception with additional or
different safeguards to ensure that the remuneration from the hospital,
FQHC, or RHC directly benefits the nonphysician practitioner and
whether it is necessary to address the issue of the tax implications
that could result from the use of the exception to provide remuneration
to a physician to assist in the employment a nonphysician practitioner.
The proposed exception is intended to permit subsidies necessary to
expand access to primary care services; however, we do not believe that
hospitals, FQHCs, and RHCs should bear the full costs of employing
nonphysician practitioners who work in private physician practices. The
2-year limit on the assistance is intended to prevent ongoing payment
to the physician that could serve as a reward for past referrals or an
inducement to continue making referrals to the hospital, FQHC, or RHC.
We solicit comments specifically addressing the time limitations set
forth in our proposal.
The proposed exception at Sec. 411.357(x) closely tracks the
structure and requirements of the exception for physician recruitment
at Sec. 411.357(e). Similar to the exception at Sec. 411.357(e), the
proposed exception for assistance to employ nonphysician practitioners
would include requirements that reference hospitals, but would apply in
the same manner to FQHCs and RHCs that wish to provide assistance to
physicians to employ nonphysician practitioners.
We are proposing requirements to safeguard against program or
patient abuse similar to the requirements found in most of our
exceptions in Sec. 411.357. Specifically, we propose that an
arrangement covered by the exception must be set out in writing and
signed by the hospital providing the remuneration, the physician
receiving the remuneration, and the nonphysician practitioner. In
addition, the arrangement may not be conditioned on the physician's or
the nonphysician practitioner's referral of patients to the hospital
providing the remuneration. Further, the proposed exception would
require that the remuneration from the hospital is not determined
(directly or indirectly) in a manner that takes into account the volume
or value of any actual or anticipated referrals by the physician or the
nonphysician practitioner (or any other physician or nonphysician
practitioner in the physician's practice) or other business generated
between the parties. We note that the definition of ``referral'' at
Sec. 411.351 relates to the request, ordering of, or certifying or
recertifying the need for DHS by a physician. For this reason, for
purposes of the requirements of the new exception, we have proposed at
Sec. 411.357(x)(3) to define the term ``referral'' as it relates to
nonphysician practitioners as a request by a nonphysician practitioner
that includes the provision of any DHS for which payment may be made
under Medicare, the establishment of any plan of care by a nonphysician
practitioner that includes the provision of such DHS, or the certifying
or recertifying of the need for such DHS, but not including any DHS
personally performed or provided by the nonphysician practitioner. The
definition of ``referral'' at proposed Sec. 411.357(x)(3) is modeled
closely on the definition of ``referral'' at Sec. 411.351. We are also
proposing that the arrangement may not violate the federal anti-
kickback statute or any federal or state law or regulation governing
billing or claims submission. Finally, we are proposing that records of
the actual amount of remuneration provided to the physician (and to the
nonphysician practitioner) be maintained for a period of at least 6
years and be made available to the Secretary upon request. We believe
that a 6-year record retention requirement is appropriate. The 6-year
period is in line with the requirements of other laws and regulations
that protect against program or patient abuse as well as other CMS
record retention requirements. We seek comment regarding whether these
``general'' safeguards are sufficient to protect against program or
patient abuse resulting from arrangements to assist with nonphysician
practitioner employment, or if additional safeguards are necessary.
We are also proposing requirements for the employment arrangement
between the physician receiving remuneration and the nonphysician
practitioner that the remuneration assists the physician to employ.
Specifically, we are proposing to require that the nonphysician
practitioner be a bona fide employee of the physician or the
physician's practice. In addition, we are proposing that the aggregate
salary, signing bonus, and benefits paid by the physician to the
nonphysician practitioner must be consistent with fair market value. We
recognize that employment arrangements may change over time, for
example, moving from full-time status to part-time status or changing a
compensation methodology from hourly payments to a pre-determined flat,
monthly salary. Because of the fair market value requirement and
because we are proposing a limit on the amount that the hospital may
provide to the physician, we do not believe that it is necessary to
require that the nonphysician practitioner's salary, signing bonus, and
benefits be set in advance. In addition, we are proposing a requirement
that the physician may not impose practice restrictions on the
nonphysician practitioner that unreasonably restrict the nonphysician
practitioner's ability to provide patient care services in the
geographic area served by the hospital, FQHC, or RHC, and we intend to
interpret this provision in the same way that we interpret the
requirement at Sec. 411.357(e)(4)(vi) with respect to physician
recruitment arrangements.
In addition, we are proposing to include requirements to prevent
gaming by ``rotating'' or ``cycling'' nonphysician practitioners
through multiple physician practices located in the geographic area
served by the hospital, FQHC, or RHC, an abuse that would effectively
shift the long-term costs of employing nonphysician practitioners to
the hospital, FQHC, or RHC. We are also concerned that parties may
misuse the exception to shift to a hospital, FQHC, or RHC the costs of
a nonphysician practitioner who is currently employed by a physician
but provides patient care services in a medical office of the physician
that is located outside of the geographic area served by the hospital,
FQHC, or RHC. To address these concerns, we are proposing that the
hospital, FQHC, or RHC may not provide assistance to a physician to
employ a nonphysician practitioner if: (1) the nonphysician
practitioner has practiced in the geographic area served by the
hospital, FQHC, or RHC within the 3 years prior to becoming employed by
the physician; or (2) the nonphysician practitioner was employed or
otherwise engaged by a physician with a medical office in the
geographic area served by the hospital,

[[Page 41913]]

FQHC, or RHC within the 3 years prior to becoming employed by the
physician, even if the nonphysician practitioner did not provide
patient care services in that office. We believe that 3 years is a
reasonable limit to protect the program and prevent abuse, but we
solicit comments regarding the appropriateness of this timeframe. For
consistency and to ease administrative burden, we propose to define
``geographic area served by the hospital'' to have the same meaning
assigned to this term in the exception at Sec. 411.357(e) for
physician recruitment, and to define the term ``geographic area
served'' by a FQHC or RHC to have the same meaning assigned to this
term in proposed Sec. 411.357(e)(6)(ii) described in this section
II.N.2.b of this proposed rule.
Finally, we are soliciting comments regarding whether additional
safeguards are necessary to protect against program or patient abuse
that might result from arrangements that would be covered by proposed
Sec. 411.357(x). We are particularly interested in comments addressing
whether we should limit the number of times a hospital, FQHC, or RHC
may assist the same physician with the employment of nonphysician
practitioners and, if so, during what time period that limitation
should apply. For example, should we limit the use of the exception to
no more than once every 3 years with respect to a particular physician
or no more than three times in the aggregate (regardless of time
period) with respect to a particular physician? Could this type of
limitation potentially undermine the goal of increased access to
primary care in the event the nonphysician practitioner(s) employed by
the physician receiving the assistance from the hospital, FQHC, or RHC
left such employment after only a short period of time or moved from
the geographic area served by the hospital, FQHC, or RHC? We are also
interested in comments addressing whether the exception should include
a requirement that there be a documented, objective need for additional
primary care services in the geographic area served by the hospital,
FQHC, or RHC. We also solicit comments specifically from FQHCs and RHCs
regarding whether this exception would be useful to such entities and
any barriers to its use that they perceive.
b. Geographic Area Served by Federally Qualified Health Centers and
Rural Health Clinics
Section 1877(e)(5) of the Act sets forth an exception for
remuneration provided by a hospital to an individual physician to
induce the physician to relocate his or her medical practice to the
geographic area served by the hospital in order to become a member of
the hospital's medical staff. This exception was codified in our
regulations at Sec. 411.357(e) in the 1995 final rule. In Phase II,
using our authority in section 1877(b)(4) of the Act, we expanded the
exception to permit FQHCs to make recruitment payments to physicians on
the same basis as hospitals (69 FR 16094 through 16095). Also in Phase
II, we revised the exception to define the geographic area served by
the hospital providing the recruitment remuneration as the lowest
number of contiguous postal zip codes from which the hospital draws at
least 75 percent of its inpatients (69 FR 16094 through 16095). In
Phase III, we made numerous amendments to the exception for physician
recruitment, including permitting RHCs to utilize the exception in the
same manner as hospitals and FQHCs (72 FR 51049). We also responded to
commenters objecting to the Phase II definition of ``geographic area
served by the hospital'' on the grounds that it ``hurts rural
hospitals, and that it is very difficult for [FQHCs] to satisfy'' by
revising the exception to permit a hospital located in a rural area to
determine the geographic area served by the hospital using an
alternative test that encompasses the lowest number of contiguous (or
in some cases, noncontiguous) zip codes from which the hospital draws
at least 90 percent of its inpatients (72 FR 51049 through 51050).
We intended for these definitions to apply to the recruitment of
physicians by FQHCs and RHCs in the same manner as they apply to
hospitals. However, the definitions of geographic area served by a
hospital and rural hospital at Sec. 411.357(e)(2)(i) and Sec.
411.357(e)(2)(iii), respectively, are contingent on the volume of the
hospital's inpatients. By definition, FQHCs and RHCs provide access to
primary care services in rural areas or underserved areas and only
treat patients as outpatients or ambulatory patients (CMS Pub. 100-02,
Chap. 13, Sec. 10.1 and 10.2 (Rev. 201, Dec. 12, 2014)). Thus, although
the regulatory exception for physician recruitment is available to
FQHCs and RHCs, it provides no guidance as to the geographic area into
which such an entity may recruit a physician, a concept critical for
compliance with the exception's requirements. Therefore, we are
proposing to revise Sec. 411.357(e)(6) to add a new definition of the
geographic area served by a FQHC or RHC. The purpose of this revision
is to ensure that the definition of the geographic area served by FQHCs
and RHCs appropriately captures the areas where their patients actually
reside and to provide certainty to FQHCs and RHCs that their physician
recruitment arrangements satisfy the requirements of the exception at
Sec. 411.357(e).
We are proposing two alternative approaches for this policy, which
aligns closely with the special optional rule for rural hospitals in
Sec. 411.357(e)(2)(iii) in recognition that rural hospitals, FQHCs,
and RHCs often serve patients who are dispersed in wider geographic
areas and may need to recruit physicians into more remote areas in
order to achieve their goals of providing needed services to the
communities that they serve. The first proposed approach would closely
mirror our current definition of a rural hospital's geographic service
area. It would indicate that the geographic area served by a FQHC or
RHC is the area composed of the lowest number of contiguous zip codes
from which the FQHC or RHC draws at least 90 percent of its patients,
as determined on an encounter basis. If the FQHC or RHC draws fewer
than 90 percent of its patients from all of the contiguous zip codes
from which it draws patients, the geographic area served by the FQHC or
RHC may include noncontiguous zip codes, beginning with the
noncontiguous zip code in which the highest percentage of its patients
reside, and continuing to add noncontiguous zip codes in decreasing
order of percentage of patients. The geographic area served by the FQHC
or RHC may include one or more zip codes from which it draws no
patients, provided that such zip codes are entirely surrounded by zip
codes in the geographic area from which it draws at least 90 percent of
its patients.
In the alternative, we propose to define the geographic area served
by a FQHC or RHC as the area composed of the lowest number of
contiguous or noncontiguous zip codes from which the FQHC or RHC draws
at least 90 percent of its patients, as determined on an encounter
basis. This would be determined by beginning with the zip code in which
the highest percentage of the FQHC's or RHC's patients reside, and
continuing to add zip codes in decreasing order of percentage of
patients. Although this approach would potentially result in larger
geographic service areas than in the first approach, we see no
potential for program or patient abuse in selecting noncontiguous zip
codes to identify 90 percent of the patient base as long as there are
patients in those areas. We seek comments on each of these
alternatives, including whether patient

[[Page 41914]]

encounters is the appropriate measure for determining the geographic
area served by a FQHC or RHC. Finally, we are soliciting comments
specifically from FQHCs and RHCs regarding whether the exception at
Sec. 411.357(e) for physician recruitment is useful to such entities
and any barriers to its use that they perceive.
c. Conforming Terminology: ``Takes into Account''
Under section 1877(e)(5) of the Act, the amount of remuneration
cannot be determined in a manner that takes into account (directly or
indirectly) the volume or value of the recruited physician's referrals.
Several other exceptions for compensation arrangements in section
1877(e) of the Act also contain provisions pertaining to the volume or
value of a physician's referrals. In each case, the statutory language
consistently states that compensation cannot be determined in a manner
that ``takes into account'' the volume or value of a physician's
referrals. (See sections 1877(e)(1)(A)(iv), (e)(1)(B)(iv),
(e)(2)(B)(ii), (e)(3)(A)(v), (e)(3)(B)(i), (e)(5)(B), (e)(6)(A), and
(e)(7)(A)(v).)
In Phase I, we developed a uniform interpretation of the volume or
value standard that applies to all provisions under section 1877 of the
Act and 42 CFR part 411, subpart J (66 FR 877). In Phase III, we
revised the terminology at Sec. 411.354(c)(2)(iii) pertaining to the
volume or value of referrals in indirect compensation arrangements (72
FR 51027). The original language at Sec. 411.354(c)(2)(iii) provided
that an indirect compensation arrangement exists if the DHS entity has
knowledge that a physician's aggregate compensation varies with, or
otherwise reflects the volume or value of referrals. Phase III replaced
the phrase ``otherwise reflects'' with ``takes into account.'' We
explained that the phrases ``takes into account'' and ``otherwise
reflects'' were not intended to have separate and different meanings,
and that we were revising Sec. 411.354(c)(2)(iii) for the sake of
consistency (72 FR 51027). We made similar conforming changes to the
regulations at Sec. 411.354(c)(2)(ii), Sec. 411.354 (c)(2)(iii), and
Sec. 411.354 (d)(1).
Despite the consistent use of the phrase ``takes into account'' in
section 1877(e) of the Act and our uniform interpretation of the volume
or value standard, not all the regulatory exceptions for compensation
arrangements in Sec. 411.357 use the phrase ``takes into account'' to
describe the volume or value standard. In particular, the regulatory
exception for the recruitment of physicians at Sec. 411.357(e) has two
provisions relating to the volume or value standard, and the provisions
use different terms. Current Sec. 411.357(e)(1)(iii) excepts payments
to a recruited physician if the hospital does not determine the amount
of compensation (directly or indirectly) ``based on'' the volume or
value of referrals. Where the recruited physician joins a physician
practice, Sec. 411.357(e)(4)(v) provides that the amount of
remuneration may not be determined in a manner that ``takes into
account'' (directly or indirectly) the volume or value of any actual or
anticipated referrals by the recruited physician or the physician
practice (or any physician affiliated with the physician practice)
receiving the direct payments from the hospital. Like the physician
recruitment exception, the following exceptions do not use the phrase
``takes into account'' in reference to the volume or value standard:
the exception for medical staff incidental benefits at Sec.
411.357(m); the exception for obstetrical malpractice insurance
subsidies at Sec. 411.357(r); and the exception for professional
courtesy at Sec. 411.357(s). The exception for obstetrical malpractice
insurance premiums at Sec. 411.357(r) provides that the amount of
payment cannot be ``based on'' the volume or value of actual or
anticipated referrals. The exceptions at Sec. 411.357(m)(1) and Sec.
411.357(s)(1) require that medical staff incidental benefits and
professional courtesies, respectively, are offered to physicians
``without regard to'' the volume or value of referrals.
We are concerned that the use of different phrases pertaining to
the volume or value of referrals (``takes into account,'' ``based on,''
and ``without regard to'') may cause some to conclude incorrectly that
there are different volume or value standards in the compensation
exceptions. We interpret the phrase ``takes into account'' throughout
section 1877(e) of the Act as requiring that compensation not be
determined in a manner that takes into account the volume or value of a
physician's referrals. Nothing in the regulatory history of the
exceptions for physician recruitment, medical staff incidental
benefits, obstetrical malpractice insurance premiums, or professional
courtesy arrangements suggests that the phrases ``based on'' and
``without regard to'' were intended to have a different meaning than
``takes into account.'' Rather, in Phase I we stated that we were
adopting a uniform interpretation of the volume or value standard (66
FR 877), and in Phase III we revised our regulations to replace the
phrases ``reflects'' and ``otherwise reflects'' with the phrase ``takes
into account.'' Likewise, we do not believe that the ``takes into
account'' standard for recruiting a physician who joins a physician
practice (Sec. 411.357(e)(4)) differs in meaning from the current
``based on'' standard that otherwise applies to recruited physicians
(Sec. 411.357(e)(1)(iii)). In sum, we believe that the there is no
substantive difference between the phrases ``takes into account,''
``based on,'' and ``without regard to,'' and that the terms have
previously been used interchangeably in the compensation exceptions.
To clarify the regulations, we propose to modify Sec.
411.357(e)(1)(iii) to conform to the exact language in section
1877(e)(5)(B) of the Act. Specifically, we propose to amend Sec.
411.357(e) to require that the compensation provided to a recruited
physician may not take into account (directly or indirectly) the volume
or value of the recruited physician's referrals to the hospital, FQHC,
or RHC providing the recruitment remuneration. We also propose to amend
Sec. 411.357(r) to require that the amount of payment under the
arrangement not may take into account the volume or value of any actual
or anticipated referrals. Lastly, we propose to revise the language of
Sec. 411.357(m) and Sec. 411.357(s) to provide that the offer of
medical staff incidental benefits or professional courtesy,
respectively, may not take into account the volume or value of a
physician's referrals. Taken together, these revisions would make the
use of the phrase ``takes into account'' consistent throughout the
compensation exceptions in Sec. 411.357. The consistent terminology
would reflect our longstanding policy that the volume or value standard
in the various compensation exceptions should be interpreted uniformly.
d. Retention Payments in Underserved Areas
Our regulation at Sec. 411.357(t) permits certain retention
payments made to a physician with a practice located in an underserved
area. This exception was first established in Phase II, and covered
only retention payments made to a physician who has a bona fide firm,
written recruitment offer that would require the physician to move his
or her medical practice at least 25 miles and outside of the geographic
area served by the hospital or FQHC making the retention payment (69 FR
16142). In Phase III, we modified the exception to permit a hospital,
RHC, or FQHC to retain a physician who does not have a bona fide
written offer of recruitment or

[[Page 41915]]

employment if the physician certifies in writing that he or she has a
bona fide opportunity for future employment that meets the requirements
at Sec. 411.357(t)(2) (72 FR 51066).
In Phase III, we explained that a retention payment based on a
physician certification may ``not exceed the lower of the following:
(1) An amount equal to 25 percent of the physician's current annual
income (averaged over the previous 24 months) using a reasonable and
consistent methodology that is calculated uniformly; or (2) the
reasonable costs the hospital would otherwise have to expend to recruit
a new physician to the geographic area served by the hospital in order
to join the medical staff of the hospital to replace the retained
physician'' (72 FR 51066). We intended the regulations to mirror the
preamble language precisely. However, the regulations at Sec.
411.357(t)(2)(iv) state that such retention payments may not exceed the
lower of: (1) an amount equal to 25 percent of the physician's current
income (measured over no more than a 24-month period), using a
reasonable and consistent methodology that is calculated uniformly; or
(2) the reasonable costs the hospital would otherwise have to expend to
recruit a new physician. Thus, the current regulation text appears to
permit entities to make retention payments that consider only part of
the prior 24-month period instead of the entire period as we intended.
The policy stated in the Phase III preamble is correct and remains
our policy at this time. Therefore, in order to avoid confusion due to
potentially conflicting regulation text, we propose to modify our
regulations at Sec. 411.357(t)(2)(iv)(A) to reflect the regulatory
intent we articulated in Phase III.
3. Reducing Burden and Improving Clarity Regarding the Writing, Term,
and Holdover Provisions in Certain Exceptions and Other Regulations
The SRDP enables providers and suppliers to disclose actual or
potential violations of the physician self-referral law to CMS and
authorizes the Secretary to reduce the amount potentially due and owing
for disclosed violations. Since the SRDP was established, we have
received numerous submissions to the SRDP disclosing actual or
potential violations relating to the writing requirements of various
compensation exceptions (for example, failure to set an arrangement out
in writing, failure to obtain the signatures of the parties in a timely
fashion, or failure to renew an arrangement that expired on its own
terms after at least 1 year). This proposed rule would clarify the
writing requirements of various compensation exceptions by making the
terminology in the compensation exceptions more consistent and by
providing policy guidance on the writing and 1-year minimum term
requirement in many exceptions. In addition, to reduce the regulatory
burden, we propose to except certain holdover arrangements, provided
certain safeguards are met.
a. Writing Requirements in Certain Compensation Exceptions and Other
Regulatory Provisions
The exceptions for the rental of office space and the rental of
equipment (section 1877(e)(1) of the Act; Sec. 411.357(a) and Sec.
411.357(b)) require that a lease be set out in writing. Several other
compensation exceptions have similar writing requirements: the
exception at Sec. 411.357(d) for personal service arrangements; the
exception at Sec. 411.357(e) for physician recruitment; the exception
at Sec. 411.357(h) for certain group practice arrangements with a
hospital; the exception at Sec. 411.357(l) for fair market value
compensation; the exception at Sec. 411.357(p) for indirect
compensation arrangements; the exception at Sec. 411.357(r) for
obstetrical malpractice insurance subsidies; the exception at Sec.
411.357(t) for retention payments in underserved areas; the exception
at Sec. 411.357(v) for electronic prescribing items and services; and
the exception at Sec. 411.357(w) for electronic health records items
and services. Through our experience administering the SRDP, we have
learned that there is uncertainty in the provider community regarding
the writing requirement of the leasing and other compensation
exceptions. In particular, we have been asked whether an arrangement
must be reduced to a single ``formal'' written contract (that is, a
single document that includes all material aspects of the arrangement)
in order to satisfy the writing requirement of the applicable
exception.
The original exception for the rental of office space required ``a
written agreement, signed by the parties, for the rental or lease of
the space . . ..'' (Omnibus Budget Reconciliation Act of 1989, Pub. L.
101-386 section 6204(e)(1)). In OBRA 1993, the Congress clarified the
exception for the rental of office space (H. Rept. 103-213 at 812).
Section 13562(e)(1) of OBRA 1993 (codified at section 1877(e)(1) of the
Act) provides exceptions for the rental of office space and equipment
if ``the lease is set out in writing . . ..'' OBRA 1993 also excepted
personal service arrangements if ``the arrangement is set out in
writing . . ..'' (OBRA 1993 Sec. 13562(e)(3), codified at section
1877(e)(3) of the Act). The current regulatory exceptions for the
rental of office space and the rental of equipment require at Sec.
411.357(a)(1) and Sec. 411.357 (b)(1), respectively, that an
``agreement'' be set out in writing. In contrast, the regulatory
exception for personal service arrangements requires at Sec.
411.357(d)(1)(i) that the ``arrangement'' be set out in writing.
Despite the different terminology in the statutory and regulatory
exceptions, we believe that the writing requirement for the leasing
exceptions and the personal service arrangements exception is the same.
Specifically, we interpret the term ``lease'' in sections 1877(e)(1)(A)
and (B) of the Act to refer to the lease arrangement. Notably, in the
statutory scheme of section 1877 of the Act, the exceptions for the
rental of office space, the rental of equipment, and personal service
arrangements are classified as ``Exceptions Relating to Other
Compensation Arrangements.'' The lease arrangement is the underlying
financial relationship between the parties (that is, payments for the
use of office space or equipment for a period of time). To satisfy the
writing requirement, the facts and circumstances of the lease
arrangement must be sufficiently documented to permit the government to
verify compliance with the applicable exception. (See Phase II (69 FR
16110) for a similar discussion regarding arrangements among components
of an academic medical center.)
In most instances, a single written document memorializing the key
facts of an arrangement provides the surest and most straightforward
means of establishing compliance with the applicable exception.
However, there is no requirement under the physician self-referral law
that an arrangement be documented in a single formal contract.
Depending on the facts and circumstances of the arrangement and the
available documentation, a collection of documents, including
contemporaneous documents evidencing the course of conduct between the
parties, may satisfy the writing requirement of the leasing exceptions
and other exceptions that require that an arrangement be set out in
writing.
Through the SRDP, we have learned that some stakeholders interpret
the term ``agreement,'' as it is used in Sec. 411.357(a)(1) and Sec.
411.357 (b)(1), to mean that a single written contract is necessary to
satisfy the writing requirement of the applicable exception. To clarify
the exceptions for the rental

[[Page 41916]]

of office space and the rental of equipment, we propose to substitute
the term ``lease arrangement'' for the term ``agreement'' in Sec.
411.357(a)(1) and Sec. 411.357(b)(1). We believe that this revision
underscores the fact that the writing requirement at Sec.
411.357(a)(1) and Sec. 411.357(b)(1) for the rental of office space
and the rental of equipment, respectively, is identical to the writing
requirement at Sec. 411.357(d)(1)(i) for personal service
arrangements. Broadly speaking, we believe that there is no substantive
difference among the writing requirements of the various compensation
exceptions that require a writing. To emphasize the uniformity of the
writing requirement in the compensation exceptions, we propose to
remove the term ``agreement'' from the exception for physician
recruitment at Sec. 411.357(e)(4)(i), the exception for fair market
value compensation at Sec. 411.357(l)(1), the special rule on
compensation that is set in advance at Sec. 411.354(d)(1), and the
special rule on physician referrals to a particular provider,
practitioner, or supplier at Sec. 411.354(d)(4)(i). To be clear, the
revised rules would still require a writing. For instance, to satisfy
the revised rule at Sec. 411.354(d)(1) on compensation that is set in
advance, the rate of compensation must be documented in writing before
the services are performed. By removing the term ``agreement,'' we are
simply clarifying that the rules do not require a particular kind of
writing, for example, a formal contract.
In light of our proposal to clarify the writing requirement at
Sec. 411.354(d)(1), Sec. 411.354(d)(4)(i), Sec. 411.357(a)(1), Sec.
411.357(b)(1), Sec. 411.357(e)(4)(i), and Sec. 411.357(1)(1) by
removing the term ``agreement,'' we propose to make conforming changes
where possible to other provisions in the compensation exceptions and
the special rules on compensation. Specifically, we propose to replace
the term ``agreement'' with the term ``lease arrangement'' in Sec.
411.357(a)(2), Sec. 411.357(a)(4), Sec. 411.357(a)(5), Sec.
411.357(a)(6), Sec. 411.357(b)(3), Sec. 411.357(b)(4), and Sec.
411.357(b)(5). We propose to replace the term ``agreement'' with the
term ``arrangement'' in Sec. 411.357(c)(3) (exception for bona fide
employment relationships) and Sec. 411.357(f)(2) (exception for
isolated transactions). Likewise, we propose to remove the phrase ``set
forth in an agreement'' from the introductory language to the exception
for fair market value compensation at Sec. 411.357(l). Finally, we are
also concerned that the words ``contract'' and ``contracted for,'' like
the word ``agreement,'' may suggest that a formal contract or other
specific kind of writing is required to satisfy the applicable
exception. To address this issue, we propose to revise Sec.
411.354(d)(4) by replacing the word ``contract'' as it relates to
personal service arrangements with the word ``arrangement,'' and we
propose similar changes to Sec. 411.357(e)(1)(iv) and Sec.
411.357(r)(2)(v), both of which refer back to Sec. 411.354(d)(4). We
propose to replace the phrase ``contracted for'' at Sec.
411.357(d)(1)(iii) with the phrase ``covered by the arrangement.'' In
the exception at Sec. 411.357(p)(2) for indirect compensation
arrangements, we propose to replace the phrase ``written contract''
with the word ``writing.''
Certain compensation exceptions use the phrase ``written
agreement'': the exception at Sec. 411.357(h) for certain group
practice arrangements with a hospital; the exception at Sec.
411.357(v) for electronic prescribing items and services; and the
exception at Sec. 411.357(w) for electronic health records items and
services. Although these exceptions use the term ``written agreement,''
we are not proposing any revisions. The exception at Sec. 411.357(h)
is rarely used, because it only protects arrangements that began
before, and continued without interruption since, December 19, 1989.
The exceptions at Sec. 411.357(v) and Sec. 411.357(w) are aligned
with the federal anti-kickback statute safe harbors at Sec.
1001.952(x) and Sec. 1001.952 (y) that protect the provision of these
items and services. To avoid creating apparent inconsistencies between
the physician self-referral law exceptions and the corresponding anti-
kickback statute safe harbors, we are not modifying Sec. 411.357(v) or
Sec. 411.357(w). However, we believe that the principles elucidated
above regarding the writing requirements of the other compensation
exceptions to the physician self-referral law also apply to Sec.
411.357(v) and Sec. 411.357(w).
b. Term Requirements in Certain Compensation Arrangements Exceptions
The exceptions at Sec. 411.357(a), Sec. 411.357(b), and Sec.
411.357(d) for the rental of office space, the rental of equipment, and
personal service arrangements, respectively, require that the
compensation arrangement between an entity furnishing DHS and a
referring physician has a term of at least 1 year. Parties submitting
self-disclosures to the SRDP have asked whether the term of the
arrangement must be in writing to satisfy the requirements of the
relevant exceptions. We propose to revise Sec. 411.357(a)(2), Sec.
411.357(b)(3), and Sec. 411.357(d)(1)(iv) to clarify the documentation
requirements related to the term of lease arrangements for the rental
of office space, lease arrangements for the rental of equipment, and
personal service arrangements.
The statutory exceptions for the rental of office space and the
rental of equipment in sections 1877(e)(1)(A)(iii) and (B)(iii) of the
Act require that the lease provides for a term of rental or lease for
at least 1 year. The statutory exception for personal service
arrangements in section 1877(e)(3)(A)(iv) of the Act requires that the
term of the arrangement is at least 1 year. Although our regulations at
Sec. 411.357(d)(1)(iv) (the exception for personal service
arrangements) use language similar to the statutory exception for
personal service arrangements, our current regulations at Sec.
411.357(a)(2) and Sec. 411.357(b)(3) (the exceptions for the rental of
office space and equipment, respectively) use the term ``agreement'' in
addressing the minimum term requirement. As explained elsewhere in this
proposed rule, we interpret ``lease'' in section 1877(e)(1) of the Act
to refer to the lease arrangement between the parties, and we also
believe that the writing requirement of sections 1877(e)(1)(A) and (B)
of the Act is identical to the requirement in section 1877(e)(3) of the
Act.
We believe that some stakeholders have interpreted the term
``agreement'' in Sec. 411.357(a)(2) and Sec. 411.357(b)(3) to mean
that a formal written contract or other document with an explicit
provision identifying the term of the arrangement is necessary to
satisfy the 1-year term requirement of the exceptions. As we noted in
the 1998 proposed rule, the 1-year term requirement is satisfied ``as
long as the arrangement clearly establishes a business relationship
that will last for at least 1 year'' (63 FR 1713). An arrangement that
lasts as a matter of fact for at least 1 year satisfies this
requirement. Parties must have contemporaneous writings establishing
that the arrangement lasted for at least 1 year, or be able to
demonstrate that the arrangement was terminated during the first year
and that the parties did not enter into a new arrangement for the same
space, equipment, or services during the first year, as required by
Sec. 411.357(a)(2), Sec. 411.357(b)(3), and Sec. 411.357(d)(1)(iv),
as applicable. Depending on the facts and circumstances of the
arrangement and the available documentation, we believe that, as is the
case with the writing requirement in these and other

[[Page 41917]]

exceptions, a collection of documents, including contemporaneous
documents evidencing the course of conduct between the parties, can
establish that the arrangement in fact lasted for the required period
of time. A formal contract or other document with an explicit ``term''
provision is generally not necessary to satisfy this element of the
exception. To clarify that a written contract with a formalized
``term'' provision is not necessary to satisfy the regulations at Sec.
411.357(a)(2) and Sec. 411.357(b)(3), we propose to remove the word
``agreement'' and to revise the first sentence of these provisions to
mirror the 1-year term requirement in the personal service arrangements
exception at Sec. 411.357(d)(1)(iv).
c. Holdover Arrangements
The exceptions at Sec. 411.357(a), Sec. 411.357(b), and Sec.
411.357(d) currently permit a ``holdover'' arrangement for up to 6
months if an arrangement of at least 1 year expires, the arrangement
satisfies the requirements of the exception when it expires, and the
arrangement continues on the same terms and conditions after its stated
expiration. We propose to amend the holdover provisions at Sec.
411.357(a)(7), Sec. 411.357(b)(6), and Sec. 411.357(d)(1)(vii) to
permit indefinite holdovers, provided that certain additional
safeguards are met. In the alternative, we propose to extend the
holdover to a definite period that is greater than 6 months (for
example, 1 year, 2 years, or 3 years), provided that additional
safeguards are met. Finally, we propose to revise the exception for
fair market value compensation at Sec. 411.357(l)(2) to permit
renewals of arrangements of any length of time, including arrangements
for 1 year or greater.
The holdover provisions in Sec. 411.357(a), Sec. 411.357(b), and
Sec. 411.357(d) developed over the course of our rulemaking in
response to inquiries regarding the expiration, termination, and
renewal of arrangements. In the 1998 proposed rule, we stated that
month-to-month arrangements after an arrangement of at least 1 year
expired would not satisfy the 1-year requirement in the applicable
exceptions (63 FR 1713). We explained that the purpose of the 1-year
requirement is to except ``stable arrangements that cannot be
renegotiated frequently to reflect the current volume or value of a
physician's referrals.'' Because we were concerned that month-to-month
arrangements could be frequently renegotiated, we required parties to
renew arrangements (after the original arrangement of at least 1 year
expired) in at least 1-year increments.
In Phase II, we addressed criticism of our statements in the 1998
proposed rule regarding month-to-month arrangements following the
expiration of an arrangement that lasted at least 1 year, as required
under the exceptions at Sec. 411.357(a), Sec. 411.357(b), and Sec.
411.357(d) (69 FR 16085 through 16086). One commenter suggested that
there was little additional risk of program or patient abuse if a
holdover rental continued on the same terms as the original lease
arrangement. We agreed that there was little risk if a month-to-month
holdover continued on the same terms and conditions as the original
lease arrangement, but stated that our position related only to time-
limited holdovers (that is, no more than 6 months) (69 FR 10685 through
10686). Thus, in Phase II we established the 6-month holdover
provisions at Sec. 411.357(a)(7) and Sec. 411.357(b)(6) for lease
arrangements. In Phase III, we declined to except an indefinite
holdover for rental arrangements where a lessor is taking steps to
remove a lessee, stating that 6 months is sufficient in the
circumstances described by the commenter, which related to the lessee's
refusal to vacate office space upon the expiration of a lease
arrangement (72 FR 51045). Phase III also established at Sec.
411.357(d)(vii) a 6-month holdover for personal service arrangements.
Through our administration of the SRDP, we have reviewed numerous
rental and personal service arrangements that failed to satisfy the
requirements of an applicable exception solely because the arrangement
expired by its terms and the parties continued the arrangement on the
same (compliant) terms and conditions after the 6-month holdover period
ended. In our experience, an arrangement that continues beyond the 6-
month period does not pose a risk of program or patient abuse, provided
that the arrangement continues to satisfy the specific requirements of
the applicable exception, including the requirements related to fair
market value, compensation that does not take into account the volume
or value of referrals or other business generated between the parties,
and reasonableness of the arrangement. We have reconsidered our
previous position and are proposing to eliminate the time limitations
on holdovers with safeguards to address two potential sources of
program or patient abuse: frequent renegotiation of short term
arrangements based on a physician's referrals, and compensation or
rental changes that become inconsistent with fair market value over
time.
To prevent frequent renegotiation of short term arrangements, the
holdover must continue on the same terms and conditions as the original
arrangement. If the parties change the original terms and conditions of
the arrangement during the holdover, we would consider this a new
arrangement. The new arrangement would be subject to the 1-year term
requirement at Sec. 411.357(a)(2), Sec. 411.357(b)(3), or Sec.
411.357(d)(1)(iv) (or it must satisfy the requirements of the exception
for fair market value compensation at Sec. 411.357(l), if applicable).
Specifically, the new arrangement must have a term of at least 1 year,
and if the parties terminate the new arrangement with or without cause
before the end of that year, they cannot enter into another arrangement
for the same or similar space, equipment, or services until the
expiration of the year. We believe that these safeguards, which are
already incorporated into the current exceptions, prevent frequent
renegotiations of short-term arrangements.
To ensure that compensation is consistent with or does not exceed
fair market value, as applicable, the proposed holdover provisions
require that the holdover arrangement satisfy all the elements of the
applicable exception when the arrangement expires and on an ongoing
basis during the holdover. Thus, if office space rental payments are
fair market value when the lease arrangement expires, but the rental
amount falls below fair market value at some point during the holdover,
the lease arrangement would fail to satisfy the requirements of the
applicable exception at Sec. 411.357(a) as soon as the fair market
value requirement is no longer satisfied, and DHS referrals by the
physicians to the entity that is party to the arrangement would no
longer be permissible. In addition, the entity could not bill the
Medicare program for DHS furnished as a result of a referral made by
the physician after the rental charges were no longer consistent with
fair market value. The requirement that the arrangement is set out in
writing continues to apply during the holdover. To satisfy this
requirement, the parties must have documentary evidence that the
arrangement in fact continued on the same terms and conditions.
Depending on the facts and circumstances of the arrangement and the
available documentation, the expired written agreement and a collection
of documents, including contemporaneous documents evidencing the course
of conduct

[[Page 41918]]

between the parties may satisfy the writing requirement for the
holdover.
As noted above, we propose to revise the holdover provisions at
Sec. 411.357(a)(7), Sec. 411.357(b)(6), and Sec. 411.357(d)(1)(vii)
to permit indefinite holdovers under certain conditions. Specifically,
the arrangement must comply with the applicable exception when it
expires by its own terms; the holdover must be on the same terms and
conditions as the immediately preceding arrangement; and the holdover
must continue to satisfy the requirements of the applicable exception.
In the alternative, we propose to extend the holdover for a definite
period (for example, a 1-, 2-, or 3-year holdover period) or for a
period of time equivalent to the term of the immediately preceding
arrangement (for example, a 2-year lease would be considered renewed
for a new 2-year period). We believe that, if the holdover is extended
for a definite period beyond 6 months, the safeguards outlined above
for indefinite holdovers are necessary to prevent program or patient
abuse. We are seeking comments on what additional safeguards, if any,
are necessary to ensure that holdovers lasting longer than 6 months do
not pose a risk of program or patient abuse.
In addition to our proposals to extend the holdover provisions at
Sec. 411.357(a)(7), Sec. 411.357(b)(6), and Sec. 411.357(d)(1)(vii),
we propose to amend the exception at Sec. 411.357(l) for fair market
value compensation arrangements. Section 411.357(l)(2) currently allows
arrangements for less than 1 year to be renewed any number of times,
provided that the terms of the arrangement and the compensation for the
same items or services do not change. We propose to amend Sec.
411.357(l)(2) to permit arrangements of any timeframe, including
arrangements for more than 1 year, to be renewed any number of times.
We believe that the proposal does not pose a risk of patient or program
abuse, because the arrangement must be renewed on the same terms and
conditions, and the renewed arrangement must satisfy all the
requirements of the exception at the time the physician makes a
referral for DHS and the entity bills Medicare for the DHS. We seek
comments as to whether the proposed revision of Sec. 411.357(l)(2)
would be necessary if we revise Sec. 411.357(d)(1)(vii) to permit
indefinite holdovers.
4. Definitions
In this proposed rule, we are proposing to revise several
definitions in our regulations to improve clarity and ensure proper
application of our policies. We describe below our specific proposals.
a. Remuneration (Sec. 411.351)
A compensation arrangement between a physician (or an immediate
family member of such physician) and a DHS entity implicates the
referral and billing prohibitions of the physician self-referral law.
Section 1877(h)(1)(A) of the Act defines the term ``compensation
arrangement'' as any arrangement involving any ``remuneration'' between
a physician (or an immediate family member of such physician) and an
entity. However, section 1877(h)(1)(C) of the Act identifies certain
types of remuneration which, if provided, would not create a
compensation arrangement subject to the referral and billing
prohibitions of the physician self-referral law. Under section
1877(h)(1)(C)(ii) of the Act, the provision of the following items,
devices, or supplies does not create a compensation arrangement between
the parties: Items, devices, or supplies that are ``used solely'' to
collect, transport, process, or store specimens for the entity
providing the items, devices, or supplies, or to order or communicate
the results of tests or procedures for such entity. Furthermore, under
our regulations at Sec. 411.351, the provision of such items, devices,
or supplies is not considered to be remuneration.
We are concerned that the phrase ``used solely'' may misleadingly
suggest that the provision of an item, device, or supply that can be
used for two or more of the six purposes listed in section
1877(h)(C)(ii) of the Act constitutes remuneration between the parties
giving rise to a compensation arrangement. In contrast, in the 1998
proposed rule, we interpreted the phrase ``solely'' to mean that the
items must be used solely for the ``purposes listed in the statute''
(63 FR 1693). Importantly, the word ``purposes'' is used in the plural,
and we did not state that an item must be used for only one purpose
listed in the statute. We continue to believe that the phrase ``used
solely'' means that an item, device, or supply cannot be used for any
purpose other than the six purposes listed in the statute. Thus, if an
item is used for two or more purposes listed in the statute, and it is
not used for any other purpose (that is, any purpose not listed in the
statute), then provision of the item does not constitute remuneration
between the parties. We propose to revise the definition of
``remuneration'' at Sec. 411.351 to make it clear that the item must
be used solely for one or more of the six purposes listed in the
statute.
Although we are not proposing regulatory revisions at this time, we
are also concerned about potential confusion, especially for hospitals
located in states included in the United States Court of Appeals for
the Third Circuit, regarding whether remuneration is conferred by a
hospital to a physician when both facility and professional services
are provided to patients in a hospital-based department. Following
commentary by the Third Circuit Court of Appeals in its decision in
United States ex rel. Kosenske v. Carlisle HMA, 554 F.3d 88 (3d Cir.
2009), we received an advisory opinion request and several self-
disclosures submitted to the SRDP asking whether certain so-called
``split bill'' arrangements between physicians and DHS entities involve
remuneration between the parties that gives rise to a compensation
arrangement for purposes of the physician self-referral law. We are
taking the opportunity afforded by this rulemaking to address this
issue.
In Kosenske, the Third Circuit Court of Appeals held that a
physician's use of a hospital's resources (for example, examination
rooms, nursing personnel, and supplies) when treating hospital patients
constitutes remuneration under the physician self-referral law, even
when the hospital bills the appropriate payor for the resources and
services it provides (including the examination room and other facility
services, nursing and other personnel, and supplies) and the physician
bills the payor for his or her professional fees only. We do not
believe that such an arrangement involves remuneration between the
parties, because the physician and the DHS entity do not provide items,
services, or other benefits to one another. Rather, the physician
provides services to the patient and bills the payor for his or her
services, and the DHS entity provides its resources and services to the
patient and bills the payor for the resources and services. There is no
remuneration between the parties for purposes of section 1877 of the
Act.
In contrast, if a physician or a DHS entity bills a non-Medicare
payor (that is, a commercial payor or self-pay patient) globally for
both the physician's services and the hospital's resources and
services, a benefit is conferred on the party receiving payment.
Specifically, the party that bills globally receives payment for items
or services provided by the other party. Such a global billing
arrangement involves remuneration between the parties that implicates
the physician self-referral law.

[[Page 41919]]

b. Compensation Arrangements -``Stand in the Shoes'' (Sec. 411.354(c))
Phase III included provisions under which all physicians would be
treated as ``standing in the shoes'' of their physician organizations
for purposes of applying the rules regarding direct and indirect
compensation arrangements at Sec. 411.354(c) (72 FR 51026 through
51030). (Since Phase II, we have considered a referring physician and
the professional corporation of which he or she is the sole owner to be
the same for purposes of the physician self-referral regulations (69 FR
16131).) The FY 2009 IPPS final rule amended Sec. 411.354(c) to: (1)
Treat a physician with an ownership or investment interest in a
physician organization as standing in the shoes of that physician
organization; and (2) permit parties to treat a physician who does not
have an ownership or investment interest in a physician organization as
standing in the shoes of that physician organization. An exception to
the mandatory treatment of physicians with ownership or investment
interests as standing in the shoes of their physician organizations was
made for physicians with ``titular'' ownership or investment interests
only (73 FR 48691 through 48700). A ``physician organization'' is
defined at Sec. 411.351 as a physician, a physician practice, or a
group practice that complies with the requirements of Sec. 411.352.
Therefore, as of October 1, 2008, for purposes of determining whether a
direct or indirect compensation arrangement exists between a physician
and an entity to which the physician makes referrals for the furnishing
of DHS, if the physician has an ownership or investment interest in the
physician organization that is not merely titular, the physician stands
in the shoes of the physician organization. The physician is considered
to have the same compensation arrangements (with the same parties and
on the same terms) as the physician organization in whose shoes he or
she stands.
In Phase III, we established the rule at Sec. 411.354(c)(3)(i),
which provides that a physician who stands in the shoes of his or her
physician organization is deemed to have the same compensation
arrangements (with the same parties and on the same terms) as the
physician organization. The regulation also states that, when applying
the exceptions in Sec. 411.355 and Sec. 411.357 to arrangements in
which a physician stands in the shoes of his or her physician
organization, the relevant referrals and other business generated
``between the parties'' are referrals and other business generated
between the entity furnishing DHS and the physician organization
(including all members, employees, and independent contractor
physicians). Our intent for this provision was to make clear that,
under the Phase III ``stand in the shoes'' policy (which considered all
physicians in a physician organization to stand in the shoes of the
physician organization), each physician in the physician organization
was considered a ``party'' to an arrangement between the physician
organization and a DHS entity.
Following the FY 2009 IPPS final rule changes limiting the ``stand
in the shoes'' rules only to physicians with ownership or investment
interests in their physician organizations (other than those with
merely a titular ownership or investment interests) and physicians who
voluntarily stand in the shoes of their physician organizations,
stakeholders inquired whether the change in the ``stand in the shoes''
policy meant that, when applying the exceptions in Sec. 411.355 and
Sec. 411.357, for purposes of determining whether compensation takes
into account the volume or value of referrals or other business
generated between the ``parties,'' the only ``parties'' to consider are
the physicians with ownership or investment interests in their
physician organizations. This was not our intent in revising the
``stand in the shoes'' rules in the FY 2009 IPPS final rule.
To address the issue raised by the stakeholders, we are proposing
to revise Sec. 411.354(c)(3)(i) so that it is consistent with our work
in the FY 2009 IPPS final rule. Our intent there was, and currently
remains, that only physicians who stand in the shoes of their physician
organization are considered parties to an arrangement for purposes of
the signature requirements of the exceptions. For such purposes, we do
not consider employees and independent contractors to be parties to a
physician organization's arrangements unless they voluntarily stand in
the shoes of the physician organization as permitted under Sec.
411.354(c)(1)(iii) or Sec. 411.354(c)(2)(iv)(B). Guidance regarding
physicians who stand in the shoes of their physician organizations may
be found on our Web site at http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/FAQs.html. Specifically, consistent with
our response in Frequently Asked Question #12318, for purposes of
satisfying the requirements of an exception to the physician self-
referral prohibition, we consider a physician who is standing in the
shoes of his or physician organization to have satisfied the signature
requirement of an applicable exception when the authorized signatory of
the physician organization has signed the writing evidencing the
arrangement.
For purposes other than satisfying the signature requirements of
the exceptions, we remain concerned about the referrals of all
physicians who are part of a physician organization that has a
compensation arrangement with a DHS entity when we analyze whether the
compensation between the DHS entity and the physician organization
takes into account the volume or value of referrals or other business
generated between the parties. If we did not consider the referrals of
all the physicians in the physician organization, and instead only
considered the referrals of those physicians who stand in the shoes of
the physician organization, DHS entities would be permitted to
establish compensation methodologies that take into account the volume
or value referrals or other business generated by non-owner physicians
in a physician organization when entering into a compensation
arrangement with the physician organization. Therefore, our proposal
would amend Sec. 411.354(c)(3)(i) to clarify that, for all purposes
other than the signature requirements, all physicians in a physician
organization are considered parties to the compensation arrangement
between the physician organization and the DHS entity.
c. Locum Tenens Physician (Sec. 411.351)
The term ``locum tenens physician'' was first defined for purposes
of the physician self-referral law in Phase I (66 FR 954). This
definition is important because a locum tenens physician is considered
a member of a group practice, and therefore the definition is relevant
to whether a physician practice complies with the group practice
requirements at Sec. 411.352. In the Phase I preamble, we likened a
locum tenens physician to one who is ``standing in the shoes'' of a
regular physician, subject to certain requirements in CMS manual
guidance (66 FR 900). Our regulations at Sec. 411.351 have
continuously defined a locum tenens physician as a physician who
substitutes (that is, ``stands in the shoes'') in exigent circumstances
for a physician, first within the definition of ``member of a group''
(66 FR 954) and later as a stand-alone defined term applicable to both
group practices and other physicians (69 FR 16129). We note that the
Phase I definition referenced the ``regular physician'' (66 FR 954).
As described in this section, in subsequent rulemaking, we
established certain rules regarding when a physician ``stands in the
shoes'' of his

[[Page 41920]]

or her physician organization. The ``stand in the shoes'' rules affect
whether an arrangement may be analyzed as a direct or indirect
compensation arrangement (See 72 FR 51027 through 51030, and 73 FR
48693 through 48700). The ``stand in the shoes'' provisions are
specific to compensation arrangements and described in our regulations
at Sec. 411.354(c).
We propose to revise the definition of locum tenens physician to
remove the reference to ``stand in the shoes.'' We believe that the
definition of a locum tenens physician is clear without the phrase
``stands in the shoes.'' We also believe that it is clear that the
``stand in the shoes'' provisions specific to compensation arrangements
are separate and distinct from the definition of a locum tenens
physician. However, to eliminate unnecessary verbiage and to avoid any
potential ambiguity, we propose to revise the definition of locum
tenens physician at Sec. 411.351 by removing the phrase ``stands in
the shoes.''
5. Exception for Ownership of Publicly Traded Securities
Section 1877(c)(1) of the Act sets forth an exception for ownership
in certain publicly traded securities and mutual funds. To qualify for
the exception, securities must be:
Investment securities (including shares or bonds,
debentures, notes, or other debt instruments) which may be purchased on
terms generally available to the public;
Securities that are: (1) Listed on the New York Stock
Exchange (NYSE), the American Stock Exchange, or any regional exchange
in which quotations are published on a daily basis; (2) foreign
securities listed on a recognized foreign, national, or regional
exchange in which quotations are published on a daily basis; or (3)
traded under the automated interdealer quotation system operated by the
National Association of Securities Dealers (NASD); and
In a corporation that had stockholder equity exceeding $75
million at the end of the corporation's most recent fiscal year or on
average during the previous 3 fiscal years.
This exception is codified in our regulations at Sec. 411.356(a),
which closely mirrors section 1877(c) of the Act. Although we are aware
of no public comment regarding publicly traded securities which are
traded under an automated interdealer quotation system operated by the
NASD, it has come to our attention that the NASD no longer exists and
that it is no longer possible to purchase a publicly traded security
traded under the automated interdealer quotation system it formerly
operated. In response, we investigated whether we could modernize the
exception for ownership of publicly traded securities by including
currently existing systems that are equivalent to the NASD's now-
obsolete automated interdealer quotation system.
In 1972, NASD launched a computerized stock trading system called
the National Association of Securities Dealers Automated Quotation
Systems (NASDAQ) stock market. In 2000, NASDAQ became an independent
entity. In 2007, the United States Securities and Exchange Commission
approved the formation of a new self-regulatory organization, the
Financial Industry Regulatory Authority (FINRA), to be a successor to
the NASD. The NASD and the member regulation, enforcement, and
arbitration functions of the NYSE consolidated to form FINRA. Until
November 2014, FINRA operated a quotation medium for over-the-counter
(OTC) securities, including those not listed on NASDAQ or a national
stock exchange. We are unable to locate a definition of ``automated
interdealer quotation system'' and believe this is an antiquated term
for which there is no modern day equivalent. However, we believe that
electronic stock markets such as NASDAQ and FINRA's OTC market are
outgrowths and modern day equivalents to an automated interdealer
quotation system.
We propose to use our authority in section 1877(b)(4) of the Act to
revise the regulations at Sec. 411.356(a)(1) to include securities
listed for trading on an electronic stock market or OTC quotation
system in which quotations are published on a daily basis and trades
are standardized and publicly transparent. Trades made through a
physical exchange (such as the NYSE or the American Stock Exchange) are
standardized and publicly transparent. To protect against risk of
program or patient abuse, we believe that trades on the electronic
stock markets and OTC quotation systems that are eligible for this
exception must also be standardized and publicly transparent.
Accordingly, we are not proposing to include any electronic stock
markets or OTC quotation systems that trade unlisted stocks or that
involve decentralized dealer networks. We also believe it is
appropriate to limit the proposed exception to those electronic stock
markets or OTC quotation systems that publish quotations on a daily
basis, as physical exchanges must publish on that basis. We seek
comment regarding whether fewer, different, or additional restrictions
on electronic stock markets or OTC quotation systems are necessary to
effectuate the Congress' intent and to protect against patient or
program abuse.
6. New Exception for Timeshare Arrangements
a. Statutory and Regulatory Background
Section 1877(e)(1)(A) of the Act sets forth an exception for the
rental of office space. Under this exception, lease arrangements must
satisfy six specific criteria, one of which is that the office space
rented or leased is used exclusively by the lessee when being used by
the lessee (and is not shared with or used by the lessor or any other
person or entity related to the lessor). The exception also permits
payments by the lessee for the use of space consisting of common areas
(which do not afford exclusive use to the lessee) if the payments do
not exceed the lessee's pro rata share of expenses for the space based
upon the ratio of the space used exclusively by the lessee to the total
amount of space (other than common areas) occupied by all persons using
the common areas. The 1995 final rule (60 FR 41959) incorporated the
provisions of section 1877(e)(1)(A) of the Act into our regulations at
Sec. 411.357(a).
Section 1877(e)(8) of the Act sets forth an exception for: (1)
Payments made by a physician to a laboratory in exchange for the
provision of clinical laboratory services; and (2) payments made by a
physician to an entity as compensation for items or services other than
clinical laboratory services if the items or services are furnished at
fair market value (the ``payments by a physician exception''). The 1995
final rule (60 FR 41929) incorporated the provisions of section
1877(e)(8) of the Act into our regulations at Sec. 411.357(i). In the
1998 proposed rule (63 FR 1703), we proposed to interpret ``other items
or services'' to mean any kind of items or services that a physician
might purchase, but not including clinical laboratory services or those
specifically excepted under another provision in Sec. Sec. 411.355
through 411.357. In that proposal, we stated that we did not believe
that the Congress meant for the payments by a physician exception to
cover a rental arrangement as a service that a physician might
purchase, because it had already included in the statute specific
exceptions, with specific standards for such arrangements, in section
1877(e)(1) of the Act. In Phase II (69 FR 16099), we responded to
commenters that disagreed with our position that the exception for
payments by a physician is not available for

[[Page 41921]]

arrangements involving items and services addressed by another
exception, stating that our position is consistent with the overall
statutory scheme and purpose and is necessary to prevent the exception
from negating the statute (69 FR 16099). We made no changes to the
exception in Phase II to accommodate the commenters' concerns.
In the 1998 proposed rule (63 FR 1699), we proposed an exception
for compensation arrangements that are based upon fair market value and
meet certain other criteria. We finalized the exception at Sec.
411.357(l) in Phase I, noting that, although it only covered services
provided by a physician (or an immediate family member of a physician)
to an entity furnishing DHS, it was available for some arrangements
that are covered by other exceptions (66 FR 917 through 919). Although
commenters requested that we expand the exception to cover the
transfer, lease or license of real property, intangible property,
property rights, or a covenant not to compete (69 FR 16111), we made no
substantive changes to the exception for fair market value compensation
in Phase II. In Phase III, we expanded the exception at Sec.
411.357(l) for fair market value compensation to include arrangements
involving compensation from a physician to an entity furnishing DHS. We
reiterated that the exception for fair market value compensation does
not protect office space lease arrangements; rather, arrangements for
the rental of office space must satisfy the requirements of the
exception at Sec. 411.357(a) (72 FR 51059 through 51060).
In Phase III, a commenter suggested that ``timeshare'' leasing
arrangements would be addressed more appropriately in the exception for
fair market value compensation at Sec. 411.357(l) or the exception for
payments by a physician at Sec. 411.357(i), instead of the exception
for the rental of office space at Sec. 411.357(a) (72 FR 51044). The
commenter described a timeshare lease arrangement under which a
physician or group practice pays the lessor for the right to use office
space exclusively on a turnkey basis, including support personnel,
waiting area, furnishings, and equipment, during a schedule of time
intervals for a fair market value rate per interval of time or in the
aggregate, and urged us to clarify that such timeshare arrangements may
qualify under Sec. 411.357(i) or Sec. 411.357 (l), the exceptions for
payments by a physician and fair market value compensation,
respectively. We note that the commenter specifically described
arrangements where the lessee had exclusive, but only periodic, use of
the premises, equipment, and personnel. In response, we declined to
permit space leases to be eligible for the fair market value exception
at Sec. 411.357(l), and stated that we were not persuaded that Sec.
411.357(i) should protect space leases (72 FR 51044 through 51045).
b. Timeshare Arrangements
Through our administration of the SRDP, as well as stakeholder
inquiries, we have been made aware of arrangements for the use of a
licensor's premises, equipment, personnel, items, supplies or services
by physicians who, for various legitimate reasons, do not require or
are not interested in a traditional office space lease arrangement. For
example, in a rural or underserved area, there may be a need in the
community for certain specialty services but that need is not great
enough to support the full-time services of a physician specialist.
Under timeshare arrangements, a hospital or local physician practice
may ask a specialist from a neighboring community to provide the
services in space owned by the hospital or practice on a limited or as-
needed basis. Most often, under such an arrangement, the specialist
does not establish an additional medical practice office by renting
office space and equipment, hiring personnel, and purchasing services
and supplies necessary for the operation of a medical practice. Rather,
it is common for a hospital or local physician practice to make
available to the visiting independent physician on a ``timeshare''
basis the space, equipment and services necessary to treat patients.
Under the timeshare arrangement, the hospital or physician practice may
provide the physician with a medical office suite that is fully
furnished and operational. The physician does not need to make any
improvements to the space or to bring any medical or office supplies in
order to begin seeing patients. Timeshare arrangements also may be
attractive to a relocating physician whose prior medical practice
office lease has not expired or to a new physician establishing his or
her medical practice.
It is our understanding that a license to use the property of
another person differs from a lease in that ownership and control of
the property remains with the licensor. That is, a lease transfers
dominion and control of the property from the lessor to the lessee, but
a license is a mere privilege to act on another's property and does not
confer a possessory interest in the property. We recognize that
timeshare arrangements may differ from traditional lease and service
arrangements. Often, a timeshare arrangement does not transfer dominion
and control over the premises, equipment, personnel, items, supplies,
and services of the licensor to the licensee, but rather confers a
privilege (or license) to use (during specified periods of time) the
premises, equipment, personnel, items, supplies, and services that are
the subject of the license.
c. New Exception
Because timeshare arrangements generally include the use of office
space, under our current regulations, an arrangement as it relates to
office space must be analyzed under the exception for the rental of
office space. However, where a timeshare arrangement is structured as a
license to use the office space (and other property and personnel) of
the licensor, it cannot satisfy the requirements of that exception
because a license generally does not provide for exclusive use of the
premises. Moreover, the arrangement may have a term of less than 1
year, which would not satisfy the term requirement at Sec.
411.357(a)(2). The exceptions for payments by a physician and fair
market value compensation arrangements, which do not have exclusive use
or 1-year term requirements, are unavailable under our current
regulations because of the inclusion of office space in the bundle of
items and services in a typical timeshare arrangement.
We believe that timeshare arrangements that include the use of
office space can be structured in a way that does not pose a risk of
program or patient abuse. To address such arrangements, which we
believe are often necessary to ensure adequate access to needed
specialty care (especially in rural and underserved areas), we are
using our authority at section 1877(b)(4) of the Act to propose a new
exception at Sec. 411.357(y) that would protect timeshare arrangements
that meet certain criteria, including that: (1) The arrangement is set
out in writing, signed by the parties, and specifies the premises,
equipment, personnel, items, supplies and services covered by the
arrangement; (2) the arrangement is between a hospital or physician
organization (licensor) and a physician (licensee) for the use of the
licensor's premises, equipment, personnel, items, supplies, or
services; (3) the licensed premises, equipment, personnel, items,
supplies, and services are used predominantly to furnish evaluation and
management services to

[[Page 41922]]

patients of the licensee; (4) the equipment covered by the arrangement,
if any: (i) Is located in the office suite where the physician performs
evaluation and management services, (ii) is used only to furnish DHS
that is incidental to the physician's evaluation and management
services and furnished at the time of such evaluation and management
services, and (iii) is not advanced imaging equipment, radiation
therapy equipment, or clinical or pathology laboratory equipment (other
than equipment used to perform CLIA-waived laboratory tests); (5) the
arrangement is not conditioned on the licensee's referral of patients
to the licensor; (6) the compensation over the term of the arrangement
is set in advance, consistent with fair market value, and not
determined in a manner that takes into account (directly or indirectly)
the volume or value of referrals or other business generated between
the parties; (7) the arrangement would be commercially reasonable even
if no referrals were made between the parties; and (8) the arrangement
does not violate the anti-kickback statute (section 1128B(b) of the
Act) or any federal or state law or regulation governing billing or
claims submission.
The proposed exception at Sec. 411.357(y) would apply only to
timeshare arrangements where the licensor is a hospital or physician
organization; it would not protect arrangements where the licensor is
another type of DHS entity. We believe that timeshare arrangements
offered by independent diagnostic testing facilities and clinical
laboratories, in particular, pose a heightened risk of program or
patient abuse as they may serve to lock in referral streams from the
physician licensee as a result of the physician's proximity to the DHS
furnished by such entities. We do not believe that it is necessary to
protect arrangements with these types of entities in order to achieve
the goals of beneficiary access to care and improved outcomes.
Similarly, we see no reason to protect timeshare arrangements in which
the hospital or other entity furnishing DHS is the licensee and the
referring physician is the licensor. We seek comment regarding whether
the scope of the exception is sufficiently broad to improve beneficiary
access to care (especially in rural or underserved areas), whether
there is a compelling need to allow DHS entities other than hospitals
and physician organizations to enter into timeshare arrangements with
referring physicians, and whether the exception should apply if the
licensor is a physician who is a source of DHS referrals to the
licensee. We solicit comment on whether the exception should be limited
to arrangements in rural and underserved areas.
We propose to protect only those timeshare arrangements under which
the physician uses the licensed premises, equipment, personnel, items,
supplies, and services predominantly for the evaluation and management
of patients. The proposed exception at Sec. 411.357(y) would not
protect the license of office space used by the physician solely or
primarily to furnish DHS to patients. We seek comment regarding whether
``predominant use'' is an appropriate measure of the use of the
licensed premises and, if so, how we might define this standard, or
whether we should include a different measure, such as one that would
require that ``substantially all of the services furnished to patients
on the licensed premises are not DHS.'' We also propose to limit the
type and location of the equipment that may be licensed to only that
which is used to furnish DHS that is incidental to the patient's
evaluation and management visit and furnished contemporaneously with
that visit. We note that this requirement does not affect the manner in
which the DHS is billed (for example, ``incident to'' a physician's
service or directly by a nonphysician practitioner). We believe that
DHS that is ``incidental to'' the patient's evaluation and management
includes a limited universe of diagnostic tests and other procedures,
such as x-rays, rapid strep tests, and urine dipstick tests to diagnose
pregnancy, that assist the physician in his or her diagnosis and
treatment of the patient. For this reason, we propose to exclude from
the protection of the exception the license of advanced imaging
equipment, radiation therapy equipment, and clinical and pathology
laboratory equipment (other than that which is used to furnish CLIA-
waived laboratory tests). Finally, we propose to require that the
equipment be located on the licensed premises; that is, in the office
suite. For example, it is reasonable for an orthopedic surgeon to x-ray
a patient to assist in the diagnosis and treatment of the patient's
potential orthopedic injury or condition. Under the proposed exception,
a hospital may license to the orthopedic surgeon the use of medical
office space, an in-suite x-ray machine, an x-ray technician, and
office and medical supplies, provided that all of the other
requirements of the exception are satisfied. We seek comment on these
requirements and limitations. Specifically we are interested in
comments regarding whether the equipment location requirement should be
expanded to include equipment located in the same building (as defined
at Sec. 411.351) as the licensed office suite or an off-site location,
and whether we should prohibit the license of equipment in the absence
of a corresponding license of office space.
We also propose to prohibit certain per unit-of-service and
percentage compensation methodologies for determining the license fees
under timeshare arrangements. Under the new exception, parties would be
able to determine license fees on an hourly, daily, or other time-based
basis, but would not be permitted to use a compensation methodology
based on, for example, the number of patients seen. Parties also would
not be permitted to use a compensation methodology based on the amount
of revenue raised, earned, billed, collected, or otherwise attributable
to the services provided by the licensee while using the licensor's
premises, equipment, personnel, items, supplies or services. We are
soliciting comments on whether these limitations on compensation
methodologies for license fees are necessary and whether a timeshare
arrangement for the use of a licensor's premises, equipment, personnel,
items, supplies or services would pose a risk of program or patient
abuse in the absence of this prohibition on per-click and percentage
compensation methodologies for the license fees paid by the licensee to
the licensor.
We note that the exception for the rental of office space would
continue to be the only exception that would apply to traditional
office space lease arrangements where dominion and control of the
premises is transferred to the lessee for a specified period of time
for the lessee's exclusive use of the leased premises. The proposed new
exception would also not be available to protect part-time exclusive
use office space lease arrangements. We solicit comments on the
proposed new exception for timeshare arrangements and any additional
criteria that may be necessary to safeguard against program or patient
abuse.
7. Temporary Noncompliance With Signature Requirements (Sec.
411.353(g))
Several compensation arrangement exceptions to the physician self-
referral law require that an arrangement be signed by the parties. Our
current regulations at Sec. 411.353(g) include a special rule for
arrangements involving temporary noncompliance with signature
requirements. The regulation permits an entity to submit a claim or

[[Page 41923]]

bill and receive payment for DHS if an arrangement temporarily does not
satisfy the applicable exception's signature requirement but otherwise
fully complies with the exception. Under the current rule, if the
failure to comply with the signature requirement is inadvertent, the
parties must obtain the required signature(s) within 90 days. If the
failure to comply is not inadvertent, the parties must obtain the
required signature(s) within 30 days.
In the FY 2009 IPPS final rule, we stated that we would evaluate
our experience with the regulation at Sec. 411.353(g) and propose more
or less restrictive modifications at a later date (73 FR 48707). We are
now proposing to modify the current regulation to allow parties 90 days
to obtain the required signatures, regardless of whether or not the
failure to obtain the signature(s) was inadvertent. We recognize that
it is not uncommon for parties who are aware of a missing signature to
take up to 90 days to obtain all required signatures. We are also
proposing to revise Sec. 411.353(g) to include reference to the new
regulatory exceptions for payments to a physician to employ a
nonphysician practitioner and timeshare arrangements that we are
proposing at new Sec. 411.357(x) and Sec. 411.357(y), respectively,
to ensure that all compensation exceptions with signature requirements
are treated uniformly. We do not believe that allowing parties 90 days
to obtain signatures while the arrangement otherwise complies with the
physician self-referral law poses a risk of program or patient abuse.
The proposed regulation maintains the safeguards of the current
rule. Specifically, the proposed regulation applies narrowly to the
signature requirement only. To make use of the proposed revised
provisions at Sec. 411.353(g), an arrangement would have to satisfy
all other requirements of an applicable exception, including the
requirement that the arrangement be set out in writing. In addition, an
entity may make use of the proposed regulation only once every 3 years
with respect to the same referring physician. Given these safeguards,
we believe that the proposed revision poses no risk of program or
patient abuse.
8. Physician-Owned Hospitals
Section 6001(a) of the Affordable Care Act amended the rural
provider and hospital ownership or investment interest exceptions to
the physician self-referral law to impose additional restrictions on
physician ownership and investment in hospitals. For purposes of these
exceptions, the new legislation defined a ``physician owner or
investor'' as a physician, or immediate family member of a physician,
who has a direct or indirect ownership or investment interest in a
hospital. We refer to hospitals with direct or indirect physician
owners or investors as ``physician-owned hospitals.''
Section 6001(a)(3) of the Affordable Care Act established new
section 1877(i) of the Act, which imposes additional requirements for
physician-owned hospitals to qualify for the rural provider or hospital
ownership exceptions. In part, section 1877(i) of the Act requires a
physician-owned hospital to disclose the fact that the hospital is
partially owned or invested in by physicians on any public Web site for
the hospital and in any public advertising for the hospital; provides
that a physician-owned hospital must have had a provider agreement in
effect as of December 31, 2010; and provides that the percentage of the
total value of the ownership or investment interests held in a
hospital, or in an entity whose assets include the hospital, by
physician owners or investors in the aggregate cannot exceed such
percentage as of March 23, 2010.
In the CY 2011 OPPS/ASC final rule with comment period (75 FR
72240), we addressed many of the additional requirements that were
established by the Affordable Care Act for a physician-owned hospital
to avail itself of the rural provider or hospital ownership exceptions.
In that final rule with comment period, among other things, we
finalized regulations at Sec. 411.362(b)(3)(ii)(C) that required a
physician-owned hospital to disclose on any public Web site for the
hospital and in any public advertising that the hospital is owned or
invested in by physicians. We also finalized regulations at Sec.
411.362(b)(1) that required a physician-owned hospital to have had a
provider agreement in effect on December 31, 2010, and at Sec.
411.362(b)(4)(i) to provide that the percentage of the total value of
the ownership or investment interests held in a hospital (or in an
entity whose assets include the hospital) by physician owners or
investors in the aggregate cannot exceed such percentage as of March
23, 2010. We also revised the rural provider and hospital ownership
exceptions at Sec. 411.356(c)(1) and Sec. 411.356(c)(3),
respectively, to provide that a physician-owned hospital must meet the
requirements in new Sec. 411.362 not later than September 23, 2011, in
order to avail itself of the applicable exception.
a. Preventing Conflicts of Interest: Public Web Site and Public
Advertising Disclosure Requirement (Sec. 411.362(b)(3)(ii)(C))
Following publication of the CY 2011 OPPS/ASC final rule with
comment period (75 FR 72240), we received numerous inquiries about many
of the additional requirements that were established by the Affordable
Care Act for the rural provider and hospital ownership exceptions,
including the requirement that a physician-owned hospital must disclose
on any public Web site for the hospital and in any public advertising
that the hospital is owned or invested in by physicians. Specifically,
industry stakeholders requested additional guidance to clarify the
terms ``public Web site for the hospital'' and ``public advertising for
the hospital,'' the range of statements that constitute a sufficient
disclosure, and the period of noncompliance for a failure to disclose.
We also received disclosures through the SRDP where the disclosing
parties reasonably assessed that, based on existing CMS guidance, they
could not certify compliance with this disclosure requirement and,
therefore, the conduct constituted a violation of the law.
Given the inquiries and disclosures that we received, we have
carefully considered both the disclosure requirement's purpose and our
existing regulations addressing the requirement. We believe that, in
establishing this requirement, the Congress decided that the public
should be on notice if a hospital is physician-owned because that fact
may inform an individual's medical decision-making. We do not interpret
the public Web site and advertising disclosure requirements to be
prescriptive requirements for the inclusion of specific wording in an
undefined range of communication. Accordingly, we are proposing to
provide physician-owned hospitals more certainty regarding the forms of
communication that require a disclosure statement and the types of
language that would constitute a sufficient statement of physician
ownership or investment. We believe that our proposals would
appropriately balance the industry's need for greater clarity with the
public's need to be apprised of such information. Finally, we note
that, in the event that a physician-owned hospital discovers that it
failed to satisfy the public Web site or public advertising disclosure
requirements, the SRDP is the appropriate means for reporting such
overpayments. For more information, see the Special Instructions for
Submissions to the CMS Voluntary Self-

[[Page 41924]]

Referral Disclosure Protocol for Physician-Owned Hospitals and Rural
Providers that Failed to Disclose Physician Ownership on any Public Web
site and in any Public Advertisement, available on our Web site at
http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Self_Referral_Disclosure_Protocol.html.
For the public Web site disclosure requirement, we are proposing to
amend existing Sec. 411.362(b)(3)(ii)(C) to list examples of the types
of Web sites that do not constitute a ``public Web site for the
hospital.'' We are proposing to revise Sec. 411.362(b)(3)(ii)(C) to
specify that a ``public Web site for the hospital'' does not include
certain types of Web sites, even though limited information about the
hospital may be found on such Web sites. For example, we do not
consider social media Web sites to be ``public Web sites for the
hospital,'' and the proposed regulation would clarify this. We do not
believe that a hospital's communications (such as maintaining an
individual page on a Web site, posting a video, or posting messages)
via a social media Web site should be construed as a Web site that is
``for the hospital,'' given that the Web site is operated and
maintained by a social networking service and that a multitude of users
typically can become members of such a service. Further, we note that
social media communications, which are used primarily for the
development of social and professional contacts and for sharing
information between interested parties, differ in scope from the
provision of information typically found on a hospital's main Web site,
such as the hospital's history, leadership and governance structure,
mission, and a list of staff physicians. We also propose to specify at
Sec. 411.362(b)(3)(ii)(C) that a ``public Web site for the hospital''
does not include electronic patient payment portals, electronic patient
care portals, or electronic health information exchanges, as these are
not available to the general public. These portals are for the
convenience of only those patients who have already been treated at the
hospital and to whom the hospital's physician ownership likely would
have already been disclosed. Our proposed examples of Web sites that do
not constitute a ``public Web site for the hospital'' is not
exhaustive. We recognize the difficulty in identifying every type of
Web site that either currently exists or may emerge as technology
develops that would not require a disclosure statement. We seek public
comment on whether our proposed examples are appropriate given the
statutory language and whether we should include different or
additional examples of Web sites in the list. We also seek public
comment on whether, in the alternative, we should provide an inclusive
definition of what would be considered a ``public Web site for the
hospital'' and, if so, we solicit recommendations for such a
definition. Finally, we note that, even if a Web site does not
constitute a public Web site for the hospital under our proposal, the
online content may, depending on the facts and circumstances,
constitute public advertising for the hospital that would require a
disclosure statement.
For the public advertising disclosure requirement, we are proposing
to define ``public advertising for the hospital'' at Sec. 411.362(a).
We note that our existing regulations at Sec. 411.362(b)(3)(ii)(C)
reference ``public advertising'' without explicitly specifying ``for
the hospital,'' which is different from the statutory language of
section 1877(i)(1)(C)(iv) of the Act. We are proposing to include that
phrase in the definition and in the disclosure requirement to conform
our regulations to the statutory language. To determine how best to
clarify what we consider to be ``public advertising for the hospital,''
we consulted numerous sources for definitions of ``advertise'' and
``advertising.'' After considering the results of our research, we are
proposing to define ``public advertising for the hospital,'' for
purposes of the physician self-referral law, as any public
communication paid for by the hospital that is primarily intended to
persuade individuals to seek care at the hospital. We are proposing
that the definition of ``public advertising for the hospital'' does not
include, by way of example, communication made for the primary purpose
of recruiting hospital staff (or other similar human resources
activities), public service announcements issued by the hospital, and
community outreach issued by the hospital. We believe that, as a
general matter, communications related to recruitment are for the
primary purpose of fulfilling a hospital's basic need for staff and
that communications issued via public service announcements and
community outreach are for the primary purpose of providing the general
public healthcare-related information. Therefore, we are proposing to
specify in our regulations that these types of communications would be
excluded from our proposed definition of ``public advertising for the
hospital.'' We note that these types of communications do not represent
an exhaustive list of what we do not consider ``public advertising for
the hospital.'' We seek public comment on our proposed definition of
``public advertising for the hospital'' as well as our proposed list of
examples that do not constitute ``public advertising for the
hospital.''
We note that a determination as to whether a certain communication
constitutes public advertising for the hospital depends on the specific
facts and circumstances of the communication. In the CY 2011 OPPS/ASC
final rule with comment period, commenters asserted that a hospital
should not be required to include disclosures in certain advertising,
such as the kind found on billboards, or the kind aired via radio and
television and that the requirement should be confined to print media
such as newspapers, magazines, and other internally produced print
material for public use (75 FR 72248). In response to the commenters,
we stated that we have no flexibility to exclude certain types of
advertising media, as the statute was very straightforward in its
statement that the disclosure appear in ``any public advertising'' for
the hospital. In this proposed rule, we are clarifying that the facts
and circumstances of the communication, rather than the medium by which
the message is communicated, determine whether a communication
constitutes ``public advertising for the hospital.''
We also are proposing to clarify the types of statements that
constitute a sufficient statement of physician ownership or investment.
Specifically, we propose to amend Sec. 411.362(b)(3)(ii)(C) to specify
that any language that would put a reasonable person on notice that the
hospital may be physician-owned is deemed a sufficient statement of
physician ownership or investment. A statement such as ``this hospital
is owned or invested in by physicians'' or ``this hospital is partially
owned or invested in by physicians'' would certainly meet this
standard. However, statements that the hospital is ``founded by
physicians,'' ``managed by physicians,'' ``operated by physicians,'' or
``part of a health network that includes physician-owned hospitals''
would also meet this standard. We also believe that a hospital's name,
by itself, could constitute language that meets this standard. For
example, we believe that ``Doctors Hospital at Main Street, USA'' would
put a reasonable person on notice that the hospital may be physician-
owned. We seek public comment on our proposed revision to the public
Web site and advertising disclosure requirements and on our proposed
examples of language that would satisfy that standard. We also invite
suggestions

[[Page 41925]]

regarding alternative standards for deeming language sufficient for
these requirements.
For the location and legibility of disclosure statements, we
continue to believe, as stated in the CY 2011 OPPS/ASC final rule with
comment period, that the disclosure should be located in a conspicuous
place on the Web site and on a page that is commonly visited by current
or potential patients, such as the home page or ``about us'' section
(75 FR 72248). Further, we believe that the disclosure should be
displayed in a clear and readable manner and in a size that is
generally consistent with other text on the Web site. We do not propose
here to prescribe a specific location or font size for disclosure
statements on either a public Web site or public advertising; rather,
physician-owned hospitals have flexibility in determining exactly where
and how to include the disclosure statements, provided that the
disclosure would put a reasonable person on notice that the hospital
may be physician-owned.
For those physician-owned hospitals that have identified non-
compliance with the public Web site disclosure requirement, we are
taking this opportunity to clarify that the period of noncompliance is
the period during which the physician-owned hospital failed to satisfy
the requirement. We note that September 23, 2011 is the date by which a
physician-owned hospital had to be in compliance with the public Web
site and advertising disclosure requirements (75 FR 72241), and,
therefore, would be the earliest possible beginning date for
noncompliance. For those physician-owned hospitals that have identified
noncompliance with the public advertising disclosure requirement, we
are clarifying that the period of noncompliance is the duration of the
applicable advertisement's predetermined initial circulation, unless
the hospital amends the advertisement to satisfy the requirement at an
earlier date. For example, if a hospital pays for an advertisement to
be included in one issue of a monthly magazine and the hospital fails
to include the disclosure in the advertisement, the period of
noncompliance likely would be the applicable month of circulation, even
if the magazine continued to be available in the archives of the
publisher, in waiting rooms of physician offices, or other public
places. We seek public comment on additional guidance that may be
necessary regarding the periods of noncompliance for both disclosure
requirements.
b. Determining the Bona Fide Investment Level (Sec. 411.362(b)(4)(i))
As stated above, section 6001(a)(3) of the Affordable Care Act
established new requirements for physician-owned hospitals to avail
themselves of either the rural provider or hospital ownership
exceptions to the physician self-referral law, including the
requirement that the percentage of the total value of the ownership or
investment interests held in a hospital, or in an entity whose assets
include the hospital, by physician owners or investors in the aggregate
cannot exceed such percentage as of March 23, 2010. In this proposed
rule, we refer to the percentage of ownership or investment interests
held by physicians in a hospital as the ``bona fide investment level''
and such percentage that was set as of March 23, 2010, as the
``baseline bona fide investment level.''
In the CY 2011 OPPS/ASC final rule with comment period (75 FR
72251), we codified the bona fide investment requirement at Sec.
411.362(b)(4)(i). In that final rule we responded to commenters that
asserted that the bona fide investment level should be calculated
without regard to any ownership or investment interests held by
physicians who do not make any referrals to the hospital, including
physicians who are no longer practicing medicine (75 FR 72250). We
stated that the ownership or investment interests of non-referring
physicians need not be considered when calculating the baseline
physician ownership level. In our response, we noted that section
1877(i)(5) of the Act defines ``physician owner or investor'' for
purposes of that subsection to include any physician with a direct or
indirect ownership or investment interest in the hospital and that,
under our definition of ``indirect ownership or investment interest''
at Sec. 411.354(b)(5), only ``referring physicians'' can have an
indirect ownership or investment interest in a DHS entity. Although we
did not explicitly address direct ownership or investment interests in
our response, we note that only referring physicians can have a direct
financial relationship under our existing regulations at Sec.
411.354(a)(2)(i).
Following publication of the CY 2011 OPPS/ASC final rule with
comment period, we received inquiries from industry stakeholders
regarding our statement that the baseline bona fide investment level
need not be calculated as including the ownership or investment
interests of non-referring physicians. First, the stakeholders asserted
that the statutory definition of physician owner or investor is broad
and that if the Congress had intended to limit the definition to only
referring physicians, the Congress would have included such qualifying
language, as it did in a separate requirement established by the
Affordable Care Act for physician-owned hospitals in section
1877(i)(C)(ii) of the Act. Second, the stakeholders asserted that
including only referring physicians in the definition of physician
owner or investor for purposes of establishing the baseline bona fide
investment level frustrates the purpose of an explicit deadline set
forth in the statute. The stakeholders noted that in the Affordable
Care Act, the Congress required physician-owned hospitals that seek to
avail themselves of the rural provider or hospital ownership exceptions
to have had physician ownership or investment as of March 23, 2010, but
allowed them until December 31, 2010 to obtain a provider agreement.
The stakeholders asserted that our position makes the March 23, 2010
deadline meaningless because a pre-operational physician-owned hospital
that did not have a provider agreement until December 31, 2010 likely
would not have had physician owners or investors referring to the
hospital as of the March 23 date. The stakeholders stated that our
position regarding non-referring physicians in the CY 2011 OPPS/ASC
final rule with comment period, in effect, precluded pre-operational
hospitals from satisfying the requirement for physician ownership as of
March 23, 2010, thus preventing the hospitals from availing themselves
of the hospital ownership or rural provider exceptions.
Given the inquiries that we received after publication of the CY
2011 OPPS/ASC final rule with comment period, we have reconsidered our
position that our regulations at Sec. 411.354 necessarily limit the
definition of physician owner or investor for purposes of establishing
the baseline bona fide investment level (and any bona fide investment
level thereafter). As we stated in the CY 2011 OPPS/ASC final rule with
comment period, we recognize that the statutory definition of physician
owner or investor is broad (75 FR 72250). Further, we understand the
concern expressed by the stakeholders that our position may frustrate
an explicit statutory deadline for certain physician-owned hospitals.
We believe that the statutory revisions to the rural provider and
hospital ownership exceptions must be read harmoniously and not in a
way that makes any provision meaningless. Accordingly, we are proposing
to revise our policy articulated in the CY 2011

[[Page 41926]]

OPPS/ASC final rule with comment period to require that the baseline
bona fide investment level and the bona fide investment level include
direct and indirect ownership and investment interests held by a
physician if he or she satisfies the definition of ``physician'' in
section 1861(r) of the Act and in Sec. 411.351, regardless of whether
the physician refers patients to the hospital (and therefore,
irrespective of whether he or she is a ``referring physician'' for
purposes of our regulatory definition of ownership or investment
interest at Sec. 411.354). Further, under our proposal, the direct or
indirect ownership interests held by an individual who no longer
practices medicine, as described in the comment summary above, would be
counted if he or she satisfies the definition of ``physician'' in
section 1861(r) of the Act and in Sec. 411.351. We seek public comment
regarding non-referring physicians and the bona fide investment level,
including whether our proposal might alleviate the burden that some
physician-owned hospitals reported when trying to determine whether a
particular physician was a referring or non-referring physician for
purposes of establishing their baseline bona fide investment levels and
the bona fide investment levels generally.
In order to support our proposal and implement the requirements of
the statute, we are proposing to amend our existing regulations to
specify that, for purposes of Sec. 411.362 (including for purposes of
determining the baseline bona fide investment level and the bona fide
investment level thereafter), the ownership or investment interests
held by both referring and non-referring physicians are included. We
propose to effectuate this change by establishing a definition of
ownership or investment interest solely for purposes of Sec. 411.362
that would apply to all types of owners or investors, regardless of
their status as referring or non-referring physicians. Specifically, we
propose to define ``ownership or investment interest'' at Sec.
411.362(a) as a direct or indirect ownership or investment interest in
a hospital. Under the proposed revision, a direct ownership or
investment interest in a hospital exists if the ownership or investment
interest in the hospital is held without any intervening persons or
entities between the hospital and the owner or investor, and an
indirect ownership or investment interest in a hospital exists if: (1)
Between the owner or investor and the hospital there exists an unbroken
chain of any number (but no fewer than one) of persons or entities
having ownership or investment interests; and (2) the hospital has
actual knowledge of, or acts in reckless disregard or deliberate
ignorance of, the fact that the owner or investor has some ownership or
investment interest (through any number of intermediary ownership or
investment interests) in the hospital. We are also proposing that an
indirect ownership or investment interest in a hospital exists even
though the hospital does not know, or acts in reckless disregard or
deliberate ignorance of, the precise composition of the unbroken chain
or the specific terms of the ownership or investment interests that
form the links in the chain. As used in Sec. 411.362, the term
``physician'' would continue to have the meaning set forth in Sec.
411.351; that is, an individual who meets the definition of
``physician'' set forth in section 1861(r) of the Act.
We believe that our proposed revision would make the prohibition
set forth at Sec. 411.362(b)(4)(i) consistent with the statutory
definition of ``physician owner or investor'' in a hospital without
unsettling long-standing definitions in our regulations. We seek public
comment on our proposed revision to Sec. 411.362, including whether
such revision would adequately address the concerns expressed by the
stakeholders after publication of the CY 2011 OPPS/ASC final rule with
comment period.
We seek public comment on an alternate proposal that we believe
also supports our policy and, thereby, effectuates the statute's
purpose. Specifically, we seek public comment on whether, in the
alternative, we should revise our regulations in an even more
comprehensive manner and remove the references to a ``referring
physician'' throughout existing Sec. 411.354. We invite public comment
on whether it would be helpful to retain the references to a
``referring physician'' for those specific provisions where the concept
of a physician's referrals to a DHS entity is essential to the
provision, such as our definition of an indirect compensation
arrangement at Sec. 411.354(c)(2)(ii).
Finally, we recognize that some physician-owned hospitals may have
relied on the position that was articulated in the CY 2011 OPPS/ASC
final rule with comment period concerning non-referring physicians and
the baseline bona fide investment level. If we finalize one or more of
the proposals described in this section of the proposed rule, these
hospitals may have revised bona fide investment levels that exceed the
baseline bona fide investment levels calculated under our current
guidance. Therefore, we propose to delay the effective date of the new
regulation until such time as physician-owned hospitals would have
sufficient time to come into compliance with the new policy. For
example, we could delay the effective date for 1 year from the date of
publication in the Federal Register of the rulemaking in which we
finalize the new regulation or on a specific date, such as January 1,
2017. We solicit comment on how long we should delay the effective
date. We also seek comment on the impact of our proposed regulatory
revisions on physician-owned hospitals and on the measures or actions
physician-owned hospitals would need to undertake to come into
compliance with our proposed revisions.
9. Solicitation of Comments: Perceived Need for Regulatory Revisions or
Policy Clarification Regarding Permissible Physician Compensation
a. Background
In the 1998 proposed rule, we discussed the impetus for the
physician self-referral law (63 FR 1662), noting that both the anti-
kickback statute and section 1877 address Congress' concern that health
care decision making can be unduly influenced by a profit motive. When
physicians have a financial incentive to refer, this incentive can
affect utilization, patient choice, and competition. Physicians can
overutilize by ordering items and services for patients that, absent a
profit motive, they would not have ordered. A patient's choice can be
affected when physicians steer patients to less convenient, lower
quality, or more expensive providers of health care, just because the
physicians are sharing profits with, or receiving remuneration from,
the providers. And lastly, where referrals are controlled by those
sharing profits or receiving remuneration, the medical marketplace
suffers since new competitors can no longer win business with superior
quality, service, or price.
The referral and billing prohibitions of the statute (and the
corresponding prohibitions in Sec. 411.353) are intended to address
these concerns, which remain valid today. (See section P.1. of this
proposed rule for a detailed description of the prohibitions.) As
explained elsewhere in this proposed rule, the prohibitions are
absolute unless the financial relationship between the physician and
entity to which he or she refers DHS satisfies the requirements of an
applicable exception. The Congress provided for certain exceptions in
sections 1877(b), (c), (d) and (e) of the Act, and granted the
Secretary authority to establish additional exceptions for financial
relationships that do not pose a risk of program or patient abuse. The
Secretary has used the authority in

[[Page 41927]]

section 1877(b)(4) of the Act to establish numerous exceptions and has
interpreted statutory and regulatory provisions in numerous
rulemakings.
Many of the exceptions in section 1877(e) of the Act (``Exceptions
Relating to Other Compensation Arrangements'') include a requirement
that the compensation paid under the arrangement is not determined in a
manner that takes into account the volume or value of referrals by the
physician who is a party to the arrangement, and some exceptions also
include a requirement that the compensation is not determined in a
manner that takes into account other business generated between the
parties. We refer to these as the ``volume or value'' and ``other
business generated'' standards.
In the 1998 proposed rule, we discussed the volume or value
standard as it pertains to the criteria that a group of physicians must
meet to qualify as a ``group practice'' (63 FR 1690). We also stated
that we would apply this interpretation of the volume or value standard
throughout our regulations (63 FR 1699). In the discussion of group
practices, we stated that ``[w]e believe that the `volume or value'
standard precludes a group practice from paying physician members for
each referral they personally make or based on the volume or value of
the referred services'' (63 FR 1690). We went on to state that ``[t]he
most straightforward way for a group to demonstrate that it is meeting
the requirements [for group practices] would be for the group to avoid
a link between physician compensation and the volume or value of any
referrals, regardless of whether the referrals involve Medicare or
Medicaid patients'' (63 FR 1690). However, because our definition of
``referral'' at Sec. 411.351 includes only referrals for DHS, ``a
group that wants to compensate its members on the basis of non-Medicare
and non-Medicaid referrals would be required to separately account for
revenues and distributions related to referrals for [DHS] for Medicare
and Medicaid patients'' (63 FR 1690). As noted in this section of the
proposed rule, outside the group practice context, these principles
apply generally to compensation from a DHS entity to a physician.
We also addressed the ``other business generated'' standard in the
1998 proposed rule, stating that we believe that the ``Congress may not
have wished to except arrangements that include additional compensation
for other business dealings'' and that ``[i]f a party's compensation
contains payment for other business generated between the parties, we
would expect the parties to separately determine if this extra payment
falls within one of the exceptions'' (63 FR 1700).
In Phase I, we finalized our policy regarding the volume or value
and other business generated standards, responding to comments on our
proposals in the 1998 proposed rule. Most importantly, we revised the
scope of the volume or value standard to permit time-based or unit of
service-based compensation formulae (66 FR 876). We also stated that
the phrase ``does not take into account other business generated
between the parties'' means that ``the fixed, fair market value payment
cannot take into account, or vary with, referrals of Medicare or
Medicaid DHS or any other business generated by the referring
physician, including other Federal and private pay business'' (66 FR
877), noting that the phrase ``generated between the parties'' means
``business generated by the referring physician'' for purposes of the
physician self-referral law (66 FR 876). In Phase II, we clarified that
personally performed services are not considered ``other business
generated'' by the referring physician (69 FR 16068). ``Simply stated,
section 1877 of the Act establishes a straightforward test that
compensation should be at fair market value for the work or service
performed or the equipment or [office] space leased--not inflated to
compensate for the physician's ability to generate other revenue'' (66
FR 877). This remains our position, and we continue to apply this
interpretation of the volume or value and other business generated
standards uniformly to all provisions under section 1877 of the Act and
part 411, subpart J, where the language appears. (See 66 FR 877.)
Also in Phase I, we established special rules on compensation at
Sec. 411.354(d) that deem compensation not to take into account the
volume or value of referrals or other business generated between the
parties if certain conditions are met (66 FR 876-77). These rules state
that compensation will be deemed not to take into account the volume or
value of referrals if the compensation is fair market value for
services or items actually provided and does not vary during the course
of the compensation arrangement in any manner that takes into account
referrals of DHS. Compensation will be deemed not to take into account
other business generated between the parties to a compensation
arrangement if the compensation is fair market value and does not vary
during the term of the compensation arrangement in any manner that
takes into account referrals or other business generated by the
referring physician, including private pay health care business. Both
special rules apply to time-based or per-unit of service-based (per-
click) compensation formulae. However, as we noted in Phase II, the
special rules on compensation are intended to be safe harbors and there
may be some situations not described in Sec. 411.354(d) where an
arrangement does not take into account the volume or value of referrals
(69 FR 16070).
b. Changes in Health Care Delivery and Payment Systems Since the
Enactment of the Physician Self-Referral Law
Since the enactment of section 1877 of the Act in 1989, significant
changes in the delivery of health care services and the payment for
such services have occurred, both within the Medicare and Medicaid
programs and for non-federal payors and patients. For over a decade, we
have engaged in efforts to align payment under the Medicare program
with the quality of the care provided to our beneficiaries. Laws such
as the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (MMA), the Deficit Reduction Act of 2005 (DRA), and the
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
have guided our efforts to move toward health care delivery and payment
reform. More recently, the Affordable Care Act required significant
changes to the Medicare program's payment systems and provides the
Secretary with broad authority to test models to implement these
reforms. We highlight a few of the Affordable Care Act's notable
provisions in this section of this proposed rule.
Section 1886(o) of the Act, as added by section 3001(a)(1) of the
Affordable Care Act, requires the Secretary to establish a hospital
value-based purchasing (VBP) program (the Hospital VBP Program) under
which value-based incentive payments are made in a fiscal year to
hospitals that meet performance standards established for a performance
period for such fiscal year. Section 1886(o)(1)(B) of the Act states
that the Hospital VBP Program applies to payments for hospital
discharges occurring on or after October 1, 2012. In accordance with
section 1886(o)(6)(A) of the Act, we are required to make value-based
incentive payments under the Hospital VBP Program to hospitals that
meet or exceed performance standards for a performance period for a
fiscal year. As further required by section 1886(o)(6)(C)(ii)(I) of the
Act, we base each hospital's value-based payment percentage on the
hospital's Total

[[Page 41928]]

Performance Score (TPS) for a specified performance period. (See 79 FR
49853, 50048.) A TPS score is awarded to hospitals during a VBP period
(established as a fiscal year) and is derived from four domains:
Clinical Process of Care, Patient Experience of Care, Outcome, and
Efficiency. For more detailed information about each TPS domain, see
our regulations at Sec. 412.165(b); for more information regarding how
TPS scores are calculated, see http://www.medicare.gov/hospitalcompare/data/total-performance-scores.html. As noted, participation in the
Hospital VBP is mandatory.
Section 3021 of the Affordable Care Act, codified at section 1115A
of the Act, established the Center for Medicare and Medicaid Innovation
(CMMI) within CMS. The purpose of CMMI is to test innovative payment
and service delivery models to reduce the cost of care provided to
patients in the Medicare and Medicaid programs while preserving or
enhancing the quality of care furnished to Medicare and Medicaid
patients. Using its authority in section 1115A of the Act, CMMI has
begun testing numerous health care delivery and payment models,
including the Pioneer Accountable Care Organization (ACO) model, four
models of the Bundled Payment for Care Improvements Initiative (BPCI),
the Nursing Home Value-based Purchasing Demonstration, and the
Community-based Care Transitions Program. Participation in these models
is voluntary. For more information about CMMI's innovation models, see
http://innovation.cms.gov/initiatives/index.html#views=models.
Section 3022 of the Affordable Care Act established the Medicare
Shared Savings Program (MSSP). The Congress created the MSSP to
facilitate coordination and cooperation among providers to improve the
quality of care for Medicare fee-for-service (FFS) beneficiaries and
reduce unnecessary costs. Physicians, hospitals, and other eligible
providers and suppliers may participate in the MSSP by creating or
participating in an ACO. The MSSP will reward ACOs that lower their
growth in health care costs while meeting performance standards on
quality of care. Participation in the MSSP is voluntary. For more
information about the MSSP, see http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/index.html.
Outside of the programs established or authorized under the laws
noted above, we are moving away from Medicare payments to providers and
suppliers that do not incorporate the value of the care provided. The
Secretary recently set a goal of tying 30 percent of traditional, fee-
for-service Medicare payments to quality or value through alternative
payment models, such as ACOs or bundled payment arrangements, by the
end of 2016, and 50 percent of payments to these models by the end of
2018. The Secretary also set a goal of tying 85 percent of all
traditional Medicare payments to quality or value by 2016, and 90
percent of payments to quality or value by 2018, through programs such
as the Hospital VBP Program and the Hospital Readmissions Reduction
Program. (See press release titled ``Better, Smarter, Healthier: In
historic announcement, HHS sets clear goals and timeline for shifting
Medicare reimbursements from volume to value,'' U.S. Department of
Health & Human Services (Jan. 26, 2015), http://www.hhs.gov/news/press/2015pres/01/20150126a.html.)
Value-based payment models and similar programs are receiving
attention in the commercial payor sector as well. Some of the largest
private carriers have made significant efforts to transition from fee-
for-service models to global payment systems. For example, in 2009,
Blue Cross and Blue Shield of Massachusetts (BC/BS Massachusetts)
launched the Alternative Quality Contract (AQC), replacing a fee-for-
service model with a modified global payment model for payments to
hospitals and physicians. The AQC model merges a per-patient global
budget with performance incentives based on national measures linked to
health outcomes, quality, and patient satisfaction. The AQC model now
includes approximately 85 percent of the hospitals and physicians in
the BC/BS Massachusetts HMO network. (See Alternative Quality Contract,
Blue Cross Blue Shield of Massachusetts https://www.bluecrossma.com/visitor/about-us/affordability-quality/aqc.html.) The AQC program
initiated by BC/BS Massachusetts has met with initial success as shown
in a 4-year study published in the New England Journal of Medicine in
2014. (See Song, Zuri, et al., Changes in Health Care Spending and
Quality 4 Years into Global Payment, N. Engl. J. Med 371; 18, Oct. 30,
2014, http://www.nejm.org/doi/full/10.1056/NEJMsa1404026#t=article.)
Specifically, the study found that spending grew an average of $62.21
per enrollee per quarter less in the AQC model contingent than in a
control group. Similarly, in 2011, Blue Cross Blue Shield of Minnesota
began a 3-year partnership with large health care providers within
Minnesota to improve quality and lower costs through an Aligned
Incentive Contracting Model. Under that model, increases to the fee-
for-service components of payments decrease over time and are replaced
by growing performance incentives tied to measurable improvements in
quality outcomes and to managing total cost of care. (See Blue Plans
Improving Healthcare Quality and Affordability through Innovative
Partnerships with Clinicians, BlueCross BlueShield Association, Feb.
13, 2014, http://www.bcbs.com/healthcare-news/press-center/BP-and-Quality-and-Plan-Innovations.pdf.)
c. Financial Relationships in Alternative Delivery and Payment Systems
The physician self-referral law, by design, separates entities
furnishing DHS from the physicians who refer Medicare patients to them.
Evolving health care delivery and payment models, within both the
Medicare and Medicaid programs and programs sponsored by non-federal
payors, are premised on the close integration of a variety of different
health care providers in order to achieve the goals of improving the
experience of care, improving the health of populations, and reducing
per capita costs of health care, often referred to as the ``three-part
aim.'' Entities furnishing DHS face the predicament of trying to
achieve clinical and financial integration with other health care
providers, including physicians, while simultaneously having to satisfy
the requirements of an exception to the physician self-referral law's
prohibitions if they wish to compensate physicians to help them meet
the triple aim and avoid financial penalties that may be imposed on
low-value health care providers. Because all inpatient and outpatient
services are considered DHS, hospitals must consider each and every
service referred by a physician in their attempts to ensure that
compensation paid to a physician does not take into account the volume
or value of his or her referrals to the hospital. According to
stakeholders, structuring incentive compensation and other payments can
be particularly challenging for hospitals, even where the payments are
to hospital-employed physicians.
Stakeholders have expressed concern that, outside of the MSSP or
certain CMMI-sponsored care delivery and payment models--for which we
have issued waivers of the prohibitions of the physician self-referral
law--the physician self-referral law prohibits financial relationships
necessary to achieve the clinical and financial

[[Page 41929]]

integration required for successful health care delivery and payment
reform. These concerns apply equally to the participation of physicians
and entities furnishing health care services in models sponsored and
paid for solely by non-federal payors, where care is provided solely to
non-federal program patients, because the financial arrangements
between the parties that result from participation in these models must
satisfy the requirements of an applicable exception to the physician
self-referral law in order to avoid the law's referral and billing
prohibitions on DHS referred for and furnished to Medicare
beneficiaries. We also have received numerous stakeholder inquiries,
unrelated to participation in alternative health care delivery or
payment models, regarding whether certain compensation methodologies
would be viewed as taking into account the volume or value of a
physician's referrals or other business generated between the physician
and the entity furnishing DHS that provides the compensation. Many of
these inquiries relate to performance-based or incentive compensation.
We have not issued any formal guidance to date, either through a
binding advisory opinion or rulemaking.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)
(Pub. L. 114-10), enacted April 16, 2015, includes certain Medicare
program integrity and fraud and abuse provisions. Notably, MACRA
requires the Secretary to undertake two studies relating to the
promotion of alternative payment models and to provide the Congress
with a gainsharing study and report.
Section 101(e)(7) of MACRA requires the Secretary, in consultation
with the Office of Inspector General (OIG), to study and report to the
Congress on fraud related to alternative payment models under the
Medicare program (the APM Report). The Secretary must study the
applicability of the federal fraud prevention laws to items and
services furnished under title XVIII of the Act for which payment is
made under an alternative payment model, identify aspects of
alternative payment models that are vulnerable to fraudulent activity,
and examine the implications of waivers to the fraud prevention laws to
support alternative payment models. The Secretary must include in the
APM Report the results of her study and recommendations for actions to
reduce the vulnerabilities of Medicare alternative payment models,
including possible changes in federal fraud prevention laws to reduce
such vulnerabilities. This report must be issued no later than 2 years
after the enactment of MACRA.
Section 512(b) of MACRA requires the Secretary, in consultation
with OIG, to submit to the Congress a report with options for amending
existing fraud and abuse laws and regulations through exceptions, safe
harbors or other narrowly tailored provisions, to permit gainsharing
arrangements that would otherwise be subject civil money penalties in
paragraphs (1) and (2) of section 1128A(b) of the Act and similar
arrangements between physicians and hospitals that improve care while
reducing waste and increasing efficiency (the Gainsharing Report). The
Gainsharing Report must address whether the recommended changes should
apply to ownership interests, compensation arrangements, or other
relationships. The Gainsharing Report must also describe how the
recommendations address accountability, transparency, and quality,
including how best to limit inducements to stint on care, discharge
patients prematurely, or otherwise reduce or limit medically necessary
care. Further, the Secretary's Gainsharing Report must consider whether
a portion of any savings generated by such arrangements should accrue
to the Medicare program. This report must be issued no later than 12
months after the enactment of MACRA.
d. Solicitation of Comments
To inform the APM Report and Gainsharing Report required under
sections 101(e)(7) and 512(b) of MACRA, respectively, as well as to aid
us in determining whether additional rulemaking or guidance is
desirable or necessary, we are soliciting comments regarding the impact
of the physician self-referral law on health care delivery and payment
reform. We are interested in comments regarding perceived barriers to
achieving clinical and financial integration posed by the physician
self-referral law generally and, in particular, the ``volume or value''
and ``other business generated'' standards set out in our regulations.
We are also interested in learning whether stakeholders see a need for
guidance on the application of our regulations as they relate to
physician compensation that is unrelated to participation in
alternative payment models. On this subject, we specifically solicit
comments regarding the ``volume or value'' and ``other business
generated'' standards, but welcome comments regarding any of our rules
for determining physician compensation. To encourage robust commentary
from stakeholders, we pose the following topics and questions for
discussion:
Does the physician self-referral law generally and, in
particular, the ``volume or value'' and ``other business generated''
standards set out in our regulations, pose barriers to or limitations
on achieving clinical and financial integration? If so, are the
barriers or limitations more pronounced for hospitals than for other
providers or suppliers because all Medicare revenue is from DHS (and,
thus, any compensation might be considered to take into account the
volume or value of referrals or other business generated by the
physician to whom it is paid)?
Which exceptions to the physician self-referral law apply
to financial relationships created or necessitated by alternative
payment models? Are they adequate to protect such financial
relationships?
Is there a need for new exceptions to the physician self-
referral law to support alternative payment models? If so, what types
of financial relationships should be excepted? What conditions should
we place on such financial relationships to protect against program or
patient abuse? Should a new exception be structured to protect
services, rather than a specific type of financial relationship, when
established conditions are met (similar to the in-office ancillary
services exception at Sec. 411.355(b), which protects referrals for
certain services performed by physician practices that meet the
requirements of Sec. 411.352)? Would legislative action be necessary
to establish exceptions to support alternative payment models?
Which aspects of alternative payment models are
particularly vulnerable to fraudulent activity?
Is there need for new exceptions to the physician self-
referral law to support shared savings or ``gainsharing'' arrangements?
If so, what types of financial relationships should be excepted? What
conditions should we place on such financial relationships to address
accountability, transparency, and quality, including how best to limit
inducements to stint on care, discharge patients prematurely, or
otherwise reduce or limit medically necessary care? Would legislative
action be necessary to establish exceptions to support shared savings
or ``gainsharing'' arrangements?
Should certain entities, such as those considered to
provide high-value care to our beneficiaries, be permitted to
compensate physicians in ways that other entities may not? For example,
should we permit hospitals that meet established quality and value
metrics under the Hospital VBP to pay bonus

[[Page 41930]]

compensation from DHS revenues to physicians who help the hospital meet
those metrics? If so, what conditions should we impose to protect
against program and patient abuse? How should we define ``high-value
care'' or ``high-value entity''? Are there standards other than the
value of the care provided to patients that would be appropriate as
threshold standards for permitting a hospital or other entity
furnishing DHS to compensate physicians in ways that other entities may
not?
Could existing exceptions, such as the exception at Sec.
411.357(n) for risk-sharing arrangements, be expanded to protect
certain physician compensation, for example, compensation paid to a
physician who participates in an alternative care delivery and payment
model sponsored by a non-federal payor? If so, what conditions should
we impose to protect against program and patient abuse from the
compensation arrangements resulting from participation in such models?
Have litigation and judicial rulings on issues such as
compensation methodologies, fair market value, or commercial
reasonableness) generated a need for additional guidance from CMS on
the interpretation of the physician self-referral law or the
application of its exceptions? We are particularly interested in the
need for guidance in the context of delivery system reform.
Is there a need for revision to or clarification of the
rules regarding indirect compensation arrangements or the exception at
Sec. 411.357(p) for indirect compensation arrangements?
Given the changing incentives for health care providers
under delivery system reform, should we deem certain compensation not
to take into account the volume or value of referrals or other business
generated by a physician? If so, what criteria should we impose for
this deemed status to ensure that compensation paid to a physician is
sufficiently attenuated from the volume or value of his referrals to or
other business generated for the entity paying the compensation? Should
we apply such a deeming provision only to certain types of entities
furnishing DHS, such as hospitals that provide high value care to our
beneficiaries?
10. Technical Corrections
We have become aware that some of the manual citations listed in
our regulations are no longer correct. We therefore propose to update
regulations at Sec. 411.351, definitions of ``entity'', ```incident
to' services or services `incident to''', ``parenteral and enteral
nutrients, equipment, and supplies'', and ``physician in the group
practice'', with the correct citations. We also propose to modernize
the regulatory text by changing ``Web site'' to ``Web site'' in Sec.
411.351, definition of ``list of CPT/HCPCS Codes'', Sec.
411.357(k)(2), Sec. 411.357(m)(2) through (m)(3), Sec. 411.357(m)(5),
Sec. 411.362(c)(2)(iv) through (c)(2)(iv)(v), Sec. 411.362(c)(5), and
Sec. 411.384(b). Lastly, we are removing the hyphen from ``publicly-
traded'' in Sec. 411.356(a) and Sec. 411.361(d), and we are
correcting a minor typographical error in Sec. 411.357(p)(1)(ii)(A).

O. Private Contracting/Opt-Out

1. Background
Effective January 1, 1998, section 1802(b) of the Act permits
certain physicians and practitioners to opt out of Medicare if certain
conditions are met, and to furnish through private contracts services
that would otherwise be covered by Medicare. For those physicians and
practitioners who opt out of Medicare in accordance with section
1802(b) of the Act, the mandatory claims submission and limiting charge
rules of section 1848(g) of the Act do not apply. As a result, if the
conditions necessary for an effective opt-out are met, physicians and
practitioners are permitted to privately contract with Medicare
beneficiaries and to charge them without regard to Medicare's limiting
charge rules.
a. Provisions of the Proposed Regulation
The private contracting/opt out law at section 1802(b) of the Act
was recently amended by section 106(a) of the Medicare Access and CHIP
Reauthorization Act of 2015 (MACRA) (Public Law 114-10). Prior to the
MACRA amendments, the law specified that physicians and practitioners
may opt out for a 2 year period. Individuals that wished to renew their
opt-out at the end of a 2 year opt-out period were required to file new
affidavits with their Medicare Administrative contractors (MAC).
Section 106(a) of MACRA amends section 1802(b)(3) of the Act to require
that opt-out affidavits filed on or after June 16, 2015, automatically
renew every 2 years. Therefore, physicians and practitioners that file
opt-out affidavits on or after June 16, 2015 will no longer be required
to file renewal affidavits in order to continue their opt-out status.
The amendments further provide that physicians and practitioners who
have filed opt-out affidavits on or after June 16, 2015, and who do not
want their opt-out status to automatically renew at the end of a 2 year
opt-out period may cancel the automatic extension by notifying us at
least 30 days prior to the start of the next 2 year opt-out period.
We propose to revise the regulations governing the requirements and
procedures for private contracts at 42 CFR part 405, subpart D so that
they conform with these statutory changes. Specifically, we propose to
revise the following:
The definition of ``Opt-out period'' at Sec. 405.400 so
that opt-out affidavits automatically renew unless the physician or
practitioner properly cancels opt-out.
Sections 405.405(b), 405.410(c)(1) and (2), 405.415(h),
(m), and (o), 405.425, 405.435(a)(4), 405.435(b)(8), 405.435(d), and
405.445(b)(2) so those sections conform with the revised definition of
``Opt-out period''.
Section 405.445(a) so that proper cancellation of opt-out
requires a physician or practitioner to submit written notice, not
later than 30 days before the end of the current 2-year opt-out period,
that the physician or practitioner does not want to extend the
application of the opt-out affidavit for a subsequent 2-year period.
Section 405.450(a) so that failure to properly cancel opt-
out is included as an initial determination for purposes of Sec.
498.3(b).
To update the terminology in our regulations, we also propose to
amend sections 405.410(d), 405.435(d), and 405.445(b)(2) so that the
term ``carrier'' is replaced with ``Medicare Administrative
contractor''.

IV. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995 (PRA), we are required to
publish a 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.
To fairly evaluate whether an information collection should be
approved by OMB, PRA section 3506(c)(2)(A) requires that we solicit
comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our burden estimates.
The quality, utility, and clarity of the information to be
collected.
Our effort to minimize the information collection burden
on the affected public, including the use of automated collection
techniques.
We are soliciting public comment on each of the section
3506(c)(2)(A)-required issues for the following information collection
requirements.

[[Page 41931]]

A. Wage Estimates

To derive average costs, we used data from the U.S. Bureau of Labor
Statistics' May 2014 National Occupational Employment and Wage
Estimates for all salary estimates (www.bls.gov/oes/current/oes_nat.htm). In this regard, Table 37 presents the mean hourly wage,
the cost of fringe benefits, and the adjusted hourly wage.

Table 37--Estimated Hourly Wages
----------------------------------------------------------------------------------------------------------------
Fringe Adjusted
Occupation title Occupation Mean hourly benefit ($/ hourly wage
code wage ($/hr) hr) ($/hr)
----------------------------------------------------------------------------------------------------------------
Billing and Posting Clerks...................... 43-3021 17.10 * 9.58 26.68
Business Operations Specialists................. 13-1000 33.69 33.69 67.38
Computer Systems Analysts....................... 15-1121 41.98 41.98 83.96
Medical and Health Services Managers............ 11-9111 49.84 49.84 99.68
Medical Secretaries............................. 43-6013 16.12 16.12 32.24
Physicians and Surgeons......................... 29-1060 93.71 93.71 187.48
----------------------------------------------------------------------------------------------------------------
* For fringe benefits, we are using the December 2014 Employer Costs for Employee Compensation (http://www.bls.gov/news.release/archives/ecec_03112015.pdf).

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

B. Proposed Information Collection Requirements (ICRs)

1. ICRs Regarding 42 CFR Part 405, Subpart D
Section 106(a) of MACRA indicates that valid opt-out affidavits
filed on or after June 16, 2015, automatically renew every 2 years.
Previously, physicians and practitioners wanting to renew their opt-out
were required to file new valid affidavits with their Medicare
Administrative Contractors (MAC).
To be consistent with section 106(a), we propose to revise 42 CFR
part 405, subpart D governing the submission of opt-out affidavits. We
estimate that 150 physicians/practitioners will submit new affidavits
at 2 hr per submission or 300 hr (total). Previously, we estimated that
600 physicians/practitioners would submit renewal affidavits at 2 hr
per submission or 1,200 hr (total). In this regard, the burden will
decrease by -900 hr (300 hr - 1,200 hr) when physicians and
practitioners no longer need to submit renewal affidavits starting on
June 16, 2017. We also estimate that a Medical Secretary will perform
this duty at $32.24/hr for a savings of -$29,016 (-900 hr x $32.24/hr).
Under Sec. 405.445(a), physicians and practitioners that file
valid opt-out affidavits on or after June 16, 2015 and do not want to
extend their opt-out status at the end of a 2 year opt-out period may
cancel by notifying us at least 30 days prior to the start of the next
2 year opt-out period. The burden associated with this new requirement
is the time to draft, sign and submit the writing to the MAC. We
estimate it will take 60 physicians/practitioners approximately 10
minutes each for a total of 10 burden hours. We also estimate that a
Medical Secretary will perform this duty at $32.24/hr for a cost of
$322.40 (10 hr x $32.24/hr).
The requirements and burden will be submitted to OMB under control
number 0938-0730 (CMS-R-234).
2. ICRs Regarding the Payment for RHC and FQHC Services (Sec.
405.2462) and What Constitutes a Visit (Sec. 405.2463)
In Sec. Sec. 405.2462(d) and 405.2463(c)(4), we propose that
clinics that were provider-based to an IHS hospital on or before April
7, 2000, and are now tribally-operated clinics contracted or compacted
under the ISDEAA, may seek to become certified as grandfathered tribal
FQHCs. To become certified, an eligible tribe or tribal organization
must submit an enrollment application (CMS-855A, OMB control number
0938-0685) and all required accompanied documentation, including an
attestation of compliance with the Medicare FQHC Conditions for
Coverage at part 491, to the Jurisdiction H Medicare Administrative
Contractor (A/B MAC).
We estimate that between 3 and 5 grandfathered tribal clinics that
were provider-based to an IHS hospital on or before April 7, 2000, and
are now tribally-operated clinics contracted or compacted under the
ISDEAA, would seek to become certified as grandfathered tribal FQHCs.
Since we estimate fewer than 10 respondents, the information collection
requirements are exempt (5 CFR 1320.3(c)) from the requirements of the
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
3. ICRs Regarding the Payment for RHC and FQHC Services (Sec.
405.2462)
In Sec. 405.2462(g)(3), we propose that RHCs must report
Healthcare Common Procedure Coding System (HCPCS) and other codes as
required in reporting services furnished to a Medicare beneficiary
during a RHC visit effective for dates of service on or after January
1, 2016.
The ongoing burden associated with the requirements under Sec.
405.2462(g)(3) is the time and effort it would take each of the
approximately 4,000 Medicare certified RHCs to report the services
furnished to a Medicare beneficiary during a RHC visit using HCPCS and
other codes as required. We believe that most RHCs are already familiar
with the use of HCPCS coding since RHCs typically record HCPCS coding
through their billing software or electronic health record systems and
they could be subject to HCPCS reporting in accordance with the
National Uniform Billing Committee and Accredited Standards Committee
X12 standards. In our estimates below, we do not disregard any RHCs
that may already be reporting HCPCS coding but we do take into the
account the range of time it will take for inexperienced RHCs compared
to experienced RHCs. We recognize some RHCs may need to make minor
updates in their systems, but more so, RHC billing staff will need
education in HCPCS coding associated with Medicare payable RHC visits.
Due to the scope of services payable as a RHC visit, we do not
anticipate RHCs will face a significant burden in training and
education of billing staff. We plan to

[[Page 41932]]

provide educational information on how RHCs are to report HCPCS and
other codes as required and clarify other appropriate RHC billing
procedures through sub-regulatory guidance.
We estimate that it will take 2 to 5 additional minutes to report
HCPCS codes on RHC claims to Medicare and, for most RHCs, we believe
that billing staff will require closer to 2 min when the RHCs become
more experienced with including HCPCS coding on Medicare claims. As
noted previously, for some RHCs, this requirement may not require any
additional coding time since they already could be capturing HCPCS
coding in their billing or electronic health record systems. Whereas,
other RHCs may need up to 5 additional minutes to include HCPCS coding
on Medicare claims. In this regard, we estimate a median of 3.5
additional minutes in the following calculations:

(8,964,208 Medicare claims in 2013 x 3.5 min)/60 min = 522,912.13 hr
(aggregate)
522,912.13 hr/4,000 RHCs = 130.73 hr (per RHC)
522,912.13 hr x $26.68/hr = $13,951,295.63 additional cost
(aggregate)
$13,951,295.63/4,000 RHCs = $3,487.82 per RHC

In deriving these figures, we analyzed claims data and RHC
certification data maintained by CMS. We also used wage data from the
Bureau of Labor Statistics (see Table 37).
The burden for the aforementioned requirements will be submitted to
OMB for approval under control number 0938-New (CMS-10568).
4. ICRs Regarding Exceptions to the Referral Prohibition Related to
Compensation Arrangements (Sec. 411.357)
Section 411.357 would be revised to establish two new exceptions:
An exception to permit remuneration to independent physicians to assist
in employing nonphysician practitioners in the geographic service area
of the hospital, FQHC, or RHC providing the remuneration; and an
exception to permit timeshare arrangements for the use of premises,
equipment, personnel, items, supplies or services. Arrangements covered
by these new exceptions must be in writing. We have also proposed
clarifications to the writing requirements for compensation
arrangements in Sec. 411.357(a), (b), (d), (e), (l), (p), and (r). The
burden associated with these requirements would be the time and effort
necessary to prepare written documents and obtain signatures of the
parties.
While these requirements are subject to the PRA, we believe the
associated burden is exempt from the PRA in accordance with 5 CFR
1320.3(b)(2). We believe that the time, effort, and financial resources
necessary to comply with the aforementioned requirements would be
incurred by persons during the normal course of their activities and,
therefore, should be considered a usual and customary business
practice.
5. ICRs Regarding [the] Physician Quality Reporting System (PQRS)
(Sec. 414.90 and Section K of This Preamble)
With respect to the PQRS, the burden associated with the
requirements of this voluntary reporting initiative is the time and
effort associated with individual eligible professionals and group
practices identifying applicable quality measures for which they can
report the necessary information, selecting a reporting option, and
reporting the information on their selected measures or measures group
to CMS using their selected reporting option. We assume that most
eligible professionals participating in the PQRS will attempt to meet
the criteria for satisfactory reporting for the 2018 PQRS payment
adjustment.
For individual eligible professionals, the burden associated with
the requirements of this reporting initiative is the time and effort
associated with eligible professionals identifying applicable quality
measures for which they can report the necessary information,
collecting the necessary information, and reporting the information
needed to report the eligible professional's measures. We believe it is
difficult to accurately quantify the burden because eligible
professionals may have different processes for integrating the PQRS
into their practice's work flows. Moreover, the time needed for an
eligible professional to review the quality measures and other
information, select measures applicable to his or her patients and the
services he or she furnishes to them, and incorporate the use of
quality data codes into the office work flows is expected to vary along
with the number of measures that are potentially applicable to a given
professional's practice. Since eligible professionals are generally
required to report on at least nine measures covering at least three
National Quality Strategy domains criteria for satisfactory reporting
(or, in lieu of satisfactory reporting, satisfactory participation in a
QCDR) for the 2018 PQRS payment adjustment, we will assume that each
eligible professional reports on an average of nine measures for this
burden analysis.
For eligible professionals who are participating in PQRS, we
estimate that it will take 5 hr for an eligible professional's billing
clerk to review the PQRS Measures List, review the various reporting
options, select the most appropriate reporting option, identify the
applicable measures or measures groups for which they can report the
necessary information, review the measure specifications for the
selected measures or measures groups, and incorporate reporting of the
selected measures or measures groups into the office work flows. The
measures list contains the measure title and brief summary information
for the eligible professional to review. Assuming the eligible
professional has received no training from his/her specialty society,
we estimate it will take an eligible professional's billing clerk up to
2 hr to review this list, review the reporting options, and select a
reporting option and measures on which to report. If an eligible
professional has received training, then we believe this would take
less time. CMS believes that 3 hours is sufficient time for an eligible
professional to review the measure specifications of nine measures or
one measures group they select to report for purposes of participating
in PQRS and to develop a mechanism for incorporating reporting of the
selected measures or measures groups into the office work flows.
Therefore, we believe that the start-up cost for an eligible
professional to report PQRS quality measures data is 5 hr x $26.68/hr =
$133.40.
We continue to expect the ongoing cost associated with PQRS
participation to decline based on an eligible professional's
familiarity with and understanding of the PQRS, experience with
participating in the PQRS, and increased efforts by CMS and
stakeholders to disseminate useful educational resources and best
practices.
We believe the burden associated with actually reporting the
quality measures will vary depending on the reporting mechanism
selected by the eligible professional. As such, we break down the
burden estimates by eligible professionals and group practices
participating in the GPRO according to the reporting mechanism used.
The proposed requirements and burden estimates will be submitted to
OMB under control number 0938-1059 (CMS-10276).
a. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals and Group Practices: Claims-Based Reporting Mechanism
Under the claims-based reporting option, eligible professionals
must

[[Page 41933]]

gather the required information, select the appropriate quality data
codes (QDCs), and include the appropriate QDCs on the claims they
submit for payment. The PQRS collects QDCs as additional (optional)
line items on the CMS-1500 claim form or the electronic equivalent
HIPAA transaction 837-P, approved under OMB control number 0938-0999.
This rule does not propose any changes to these forms. Beginning in
2014, CMS made changes on how Critical access hospitals (CAHs) were
billed under Medicare which made it possible for eligible professionals
in CAH method II payment to participate in PQRS.
Based on our experience with the Physician Voluntary Reporting
Program (PVRP), we continue to estimate that the time needed to perform
all the steps necessary to report each measure (that is, reporting the
relevant quality data code(s) for nine measures) would range from 15
sec (0.25 min) to over 12 min for complicated cases and/or measures,
with the median time being 1.75 min. To report nine measures, we
estimate that it would take approximately 2.25 min (0.25 min x 9) to
108 min (12 min x 9) to perform all the steps necessary to report nine
measures.
At an adjusted labor rate of $83.96/hr for a computer systems
analyst, the per measure cost would range from $0.35 [($83.96/hr/60) x
0.25 min] to $16.79 [($83.96/hr/60) x 12 min], with a median cost of
$2.45 [($83.96/hr/60) x 1.75 min]. To report nine measures we estimate
that the cost would range from $3.15 ($0.35 x 9) to $151.11 ($16.79 x
9), with a median cost of $22.05 ($2.45 x 9).
The total estimated annual burden will vary along with the volume
of claims on which quality data is reported. In previous years, when we
required reporting on 80 percent of eligible cases for claims-based
reporting we found that, on average, the median number of reporting
instances for each of the PQRS measures was nine. Since we reduced the
required reporting rate by over one-third to 50 percent, we assume that
an eligible professional or eligible professional in a group practice
will need to report each selected measure for six reporting instances.
The actual number of cases on which an eligible professional or group
practice is required to report quality measures data will vary with the
eligible professional's or group practice's patient population and the
types of measures on which the eligible professional or group practice
chooses to report (each measure's specifications includes a required
reporting frequency). For the 2018 payment adjustment, eligible
professionals will also report on one cross-cutting measure if they see
at least one Medicare patient. However, we do not see any additional
burden impact as they are still reporting on the same number of
measures.
Based on these assumptions, we estimate that the per individual
eligible professional reporting burden would range from 13.5 min (0.25
min per measure x 9 measures x 6 cases per measure) to 648 min (12 min
per measure x 9 measures x 6 cases per measure), with a median burden
of 94.5 min (1.75 min per measure x 9 measures x 6 cases). We also
estimate that the cost would range from $18.90 [13.5 min ($83.96/hr/
60)] to $906.66 [648 min ($83.96/hr/60)], with a median cost of $132.30
[94.5 min ($83.96/hr/60)].
Based on the assumptions discussed above, Table 38 provides an
estimate of the range of total annual burden associated with eligible
professionals using the claims-based reporting mechanism.

Table 38--Summary of Burden Estimates for Eligible Professionals Using the Claims-Based Reporting Mechanism
----------------------------------------------------------------------------------------------------------------
Minimum burden Median burden Maximum burden
estimate estimate estimate
----------------------------------------------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a)......... 350,000 350,000 350,000
Estimated # of Measures Per Eligible Professional Per Year (b).. 9 9 9
Estimated # of Cases Per Measure Per Eligible Professional Per 6 6 6
Year (c).......................................................
Total Estimated # of Cases Per Eligible Professional Per Year 54 54 54
(d) = (b)*(c)..................................................
Estimated Burden Hours Per Case (e)............................. 0.00415 0.02917 0.19992
Estimated Total Burden Hours For Measures Per Eligible 0.2241 1.57518 10.79568
Professional Per Year (f) = (d)*(e)............................
Estimated Burden Hours Per Eligible Professional to Prepare for 5 5 5
PQRS Participation (g).........................................
Estimated Total Annual Burden Hours Per Eligible Professional 5.2241 6.57518 15.79568
(h) = (f) + (g)................................................
Estimated Total Annual Burden Hours (i) = (a)*(h)............... 1,828,435 2,301,313 5,528,488
Estimated Cost Per Case (j)..................................... $0.35 $2.45 $16.79
Total Estimated Cost of Cases Per Eligible Professional Per Year $18.90 $132.30 $906.66
(k) = (d)*(j)..................................................
Estimated Cost Per Eligible Professional to Prepare for PQRS $133.40 $133.40 $133.40
Participation (l)..............................................
Estimated Total Annual Cost Per Eligible Professional (m) = (k) $152.30 $265.70 $1,040.06
+ (l)..........................................................
Estimated Total Annual Burden Cost (n) = (a)*(m)................ $53,305,000 $92,995,000 $364,021,000
----------------------------------------------------------------------------------------------------------------

b. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals and Group Practices: Qualified Registry-Based and QCDR-
Based Reporting Mechanisms
For qualified registry-based and QCDR-based reporting, there will
be no additional time for eligible professionals or group practices to
report data to a qualified registry as eligible professionals and group
practices opting for qualified registry-based reporting or use of a
QCDR will more than likely already be reporting data to the qualified
registry for other purposes and the qualified registry will merely be
re-packaging the data for use in the PQRS. Little, if any, additional
data will need to be reported to the qualified registry or QCDR solely
for purposes of participation in the PQRS. However, eligible
professionals and group practices will need to authorize or instruct
the qualified registry or QCDR to submit quality measures results and
numerator and denominator data on quality measures to CMS on their
behalf. We estimate that the time and effort associated with this
requirement will be approximately 5 min per eligible professional or
eligible professional within a group practice.
Based on the assumptions discussed above, Table 39 provides an
estimate of the total annual burden hours and cost associated with
eligible professionals using the qualified registry-based or QCDR-based
reporting mechanism. Please note that, unlike the claims-based
reporting mechanism that would require an eligible professional to
report data to CMS on quality measures on multiple

[[Page 41934]]

occasions, an eligible professional would not be required to submit
this data to CMS, as the qualified registry or QCDR would perform this
function on the eligible professional's behalf.

Table 39--Summary of Burden Estimates for Eligible Professionals
(Participating Individually or as Part of A Group Practice) Using the
Qualified Registry-Based and QCDR-Based Reporting Mechanisms
------------------------------------------------------------------------
Burden
estimate
------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a). 212,000
Estimated Burden Hours Per Eligible Professional to 0.083
Authorize the Qualified registry or QCDR to Report on
Eligible Professional's Behalf (b).....................
Estimated Burden Hours Per Eligible Professional to 3
Report PQRS Data to Qualified registry or QCDR (c).....
Estimated Burden Hours Per Eligible Professional to 5
Prepare for PQRS Participation (d).....................
Estimated Total Annual Burden Hours Per Eligible 8.083
Professional (e) = (b) + (c) + (d).....................
Estimated Total Annual Burden Hours (f) = (a)*(e)....... 1,713,596
Estimated Cost Per Eligible Professional to Authorize $6.97
Qualified registry or QCDR to Report on Eligible
Professional's Behalf (g)..............................
Estimated Cost Per Eligible Professional to Report PQRS $251.88
Data to Qualified registry or QCDR (h).................
Estimated Cost Per Eligible Professional to Prepare for $133.40
PQRS Participation (i).................................
Estimated Total Annual Cost Per Eligible Professional $392.25
(j) = (g) + (h) + (i)..................................
Estimated Total Annual Burden Cost (k) = (a)*(j)........ $83,157,000
------------------------------------------------------------------------

c. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals and Group Practices: EHR-Based Reporting Mechanism
For EHR-based reporting, which includes EHR reporting via a direct
EHR product and an EHR data submission vendor's product, the eligible
professional or group practice must review the quality measures on
which we will be accepting PQRS data extracted from EHRs, select the
appropriate quality measures, extract the necessary clinical data from
his or her EHR, and submit the necessary data to the CMS-designated
clinical data warehouse.
Under this reporting mechanism the individual eligible professional
or group practice may either submit the quality measures data directly
to CMS from their EHR or utilize an EHR data submission vendor to
submit the data to CMS on the eligible professional's or group
practice's behalf. To submit data to CMS directly from their EHR, the
eligible professional or eligible professional in a group practice must
have access to a CMS-specified identity management system, such as
IACS, which we believe takes less than 1 hour to obtain. Once an
eligible professional or eligible professional in a group practice has
an account, he or she will need to extract the necessary clinical data
from his or her EHR, and submit the necessary data to the CMS-
designated clinical data warehouse.
With respect to submitting the actual data file for the respective
reporting period, we believe that this will take an eligible
professional or group practice no more than 2 hr, depending on the
number of patients on which the eligible professional or group practice
is submitting. We also believe that once the EHR is programmed by the
vendor to allow data submission to CMS, the burden to the eligible
professional or group practice associated with submission of data on
quality measures should be minimal as all of the information required
to report the measure should already reside in the eligible
professional's or group practice's EHR.
In this rule, we are proposing that group practices with 25 or more
eligible professionals must report on CAHPS for PQRS (OMB control
number 0938-1222, CMS-10450). Therefore, a group practice of 25 or more
eligible professionals would be required to report six or more measures
covering two domains of their choosing. At this point, we do not
believe the requirement to report CAHPS for PQRS adds or reduces the
burden on group practices, as we consider reporting the CAHPS for PQRS
survey as reporting three measures covering one domain.
Based on the assumptions discussed above, Table 40 provides an
estimate of the total annual burden hours and cost associated with EHR-
based reporting for individual eligible professionals or group
practices. Please note that, unlike the claims-based reporting
mechanism that would require an eligible professional to report data to
CMS on quality measures on multiple occasions, an eligible professional
would not be required to submit this data to CMS, as the EHR product
would perform this function on the eligible professional's behalf.

Table 40--Summary of Burden Estimates for Eligible Professionals
(Participating Individually or as Part of A Group Practice) Using the
EHR-Based Reporting Mechanism
------------------------------------------------------------------------
Burden
estimate
------------------------------------------------------------------------
Estimated # of Participating Eligible Professionals (a). 50,000
Estimated Burden Hours Per Eligible Professional to 1
Obtain IACS Account (b)................................
Estimated Burden Hours Per Eligible Professional to 1
Submit Test Data File to CMS (c).......................
Estimated Burden Hours Per Eligible Professional to 2
Submit PQRS Data File to CMS (d).......................
Estimated Burden Hours Per Eligible Professional to 5
Prepare for PQRS Participation (e).....................
Estimated Total Annual Burden Hours Per Eligible 9
Professional (f) = (b) + (c) + (d) + (e)...............
Estimated Total Annual Burden Hours (g) = (a)*(f)....... 450,000
Estimated Cost Per Eligible Professional to Obtain IACS $83.96
Account (h)............................................
Estimated Cost Per Eligible Professional to Submit PQRS $251.88
Data File to CMS (includes 1hr for submitting test
file, which is optional) (i)...........................
Estimated Cost Per Eligible Professional to Prepare for $133.40
PQRS Participation (j).................................
Estimated Total Annual Burden Cost Per Eligible $469.24
Professional (k) = (h) + (i) + (j).....................
Estimated Total Annual Burden Cost (m) = (a)*(k)........ $23,462,000
------------------------------------------------------------------------

d. Burden Estimate for PQRS Reporting by Group Practices Using the GPRO
Web Interface
With respect to the process for group practices to be treated as
satisfactorily submitting quality measures data under the PQRS, group
practices interested in participating in the PQRS through the group
practice reporting option (GPRO) must complete a self-nomination
process similar to the self-nomination process required of qualified
registries. However, since a group practice using the GPRO web
interface would not need to determine which measures to report under
PQRS, we believe that the self-nomination process is handled by a group
practice's administrative staff

[[Page 41935]]

(billing and posting clerk). Therefore, we estimate that the self-
nomination process for the group practices for the PQRS involves
approximately 2 hr per group practice to review the PQRS GPRO and make
the decision to participate as a group rather than individually and an
additional 2 hr per group practice to draft the letter of intent for
self-nomination, gather the requested TIN and NPI information, and
provide this requested information. It is estimated that each self-
nominated entity will also spend 2 hr undergoing the vetting process
with CMS officials. We assume that the group practice staff involved in
the self-nomination process has an adjusted labor rate of $26.68/hr.
Therefore, assuming the time associated with the group practice self-
nomination process is 6 hr per group practice, at a cost of $160.08
($26.68/hr x 6 hr per group practice).
The burden associated with the group practice reporting
requirements under the GPRO is the time and effort associated with the
group practice submitting the quality measures data. For physician
group practices, this would be the time associated with the physician
group completing the web interface. We estimate that the time and
effort associated with using the GPRO web interface is comparable to
the time and effort associated to using the PAT. As stated above, the
information collection components of the PAT have been reviewed by OMB
and are approved under OMB control number 0938-0941 (CMS-10136) for use
in the PGP, MCMP, and EHR demonstrations. As the GPRO was only recently
implemented in 2010, it is difficult to determine the time and effort
associated with the group practice submitting the quality measures
data. As such, we will use the same burden estimate for group practices
participating in the GPRO as we use for group practices participating
in the PGP, MCMP, and EHR demonstrations. Since these changes will not
have any impact on the information collection requirements associated
with the PAT and we will be using the same data submission process used
in the PGP demonstration, we estimate that the burden associated with a
group practice completing data for PQRS under the web interface will be
the same as for the group practice to complete the PAT for the PGP
demonstration. In other words, we estimate that, on average, it will
take each group practice 79 hr to submit quality measures data via the
GPRO web interface at a cost of $83.96/hr. Therefore, the annual cost
is estimated at $6,632.84 per group practice.
Based on the assumptions discussed above, Table 41 provides an
estimate of the total annual burden hours and cost associated with the
group practice reporting of quality measures.

Table 41--Summary of Burden Estimates for Group Practices Using the GPRO
Web Interface Reporting Mechanism
------------------------------------------------------------------------
Burden
estimate
------------------------------------------------------------------------
Estimated # of Eligible Group Practices in 2013/2014 (a) 500
Estimated # of Burden Hours Per Group Practice to Self- 6
Nominate to Participate in PQRS Under the Group
Practice Reporting Option (b)..........................
Estimated # of Burden Hours Per Group Practice to Report 79
(c)....................................................
Estimated Total Annual Burden Hours Per Group Practice 85
(d) = (b) + (c)........................................
Estimated Total Annual Burden Hours (e) = (a)*(d)....... 42,500
Estimated Cost Per Group Practice to Self-Nominate to $160.08
Participate in PQRS Under the Group Practice Reporting
Option (at a labor rate of $26.68/hr) (f)..............
Estimated Cost Per Group Practice to Report (g)......... $6,632.84
Estimated Total Annual Cost Per Group Practice (h) = (f) $6,792.92
+ (g)..................................................
Estimated Total Annual Burden Cost (i) = (a)*(h)........ $3,396,460
------------------------------------------------------------------------

Please note that, beginning in 2013, we are requiring group
practices that use the GPRO web interface reporting mechanism to
administer a CAHPS survey. Please note that the burden estimates of
implementing this survey is provided in a separate PRA package
submission.
e. Total Estimated Burden of This Information Collection Requirement
for 2013 and 2014
It is difficult to accurately estimate the total annual burden
hours and costs associated with the submission of the quality measures
data for the PQRS. For example, there are a number of reporting
mechanisms available that eligible professionals can choose to use to
report the PQRS measures. It may be more burdensome for some practices
to use some reporting mechanisms to report the PQRS measures and/or
electronic prescribing measure than others. This will vary with each
practice. We have no way of determining which reporting mechanism an
individual eligible professional will use in a given year, especially
since EHR reporting and group practice reporting were new options for
the 2010 PQRS and the QCDR option is new for the 2014 PQRS. Therefore,
Table 42 provides a range of estimates for individual eligible
professionals or group practices using the claims, qualified registry,
or EHR-based reporting mechanisms. The lower range of the estimate
assumes that eligible professionals will only participate in PQRS to
avoid the PQRS payment adjustments that begin in 2015. The upper range
assumes that eligible professionals participate in PQRS for purposes of
earning an incentive as well as avoiding the PQRS payment adjustments.
This upper range represents the sum of the estimated maximum hours and
cost per eligible professional from Tables 37, 38, and 40. We are
updating our previously approved estimates for the upper range of the
estimates provided in Table 42.

Table 42--Summary of Burden Estimates for Eligible Professionals and/or
Group Practices Using the Claims, Qualified Registry, and EHR-Based
Reporting Mechanisms
------------------------------------------------------------------------
Minimum burden Maximum burden
estimate estimate
------------------------------------------------------------------------
Estimated Annual Burden Hours for Claims- 1,828,435 5,528,488
based Reporting (for individual
eligible professionals only)...........
Estimated Annual Burden for Qualified 1,713,596 1,713,596
Registry-based or QCDR-based Reporting.
Estimated Annual Burden Hours for EHR- 450,000 450,000
based Reporting........................
Estimated Total Annual Burden Hours for 3,992,031 7,692,084
Eligible Professionals or Eligible
Professionals in a Group Practice......
Estimated Cost for Claims-based $53,305,000 $364,021,000
Reporting (for individual eligible
professionals only)....................
Estimated Cost for Qualified Registry- $83,157,000 $83,157,000
based Reporting........................
Estimated Cost for EHR-based Reporting.. $23,462,000 $23,462,000

[[Page 41936]]

Estimated Total Annual Cost for Eligible $159,924,000 $470,640,000
Professionals or Eligible Professionals
in a Group Practice....................
------------------------------------------------------------------------

For purposes of estimating the reporting burden for group
practices, Table 43 provides a summary of an estimate for group
practices to participate in PQRS under the group practice reporting
option using the GPRO web interface during 2015 (that is, Table 41).

Table 43--Summary of Burden Estimates for Group Practices Using the GPRO
Web Interface Reporting Mechanism
------------------------------------------------------------------------
Maximum
burden
estimate
------------------------------------------------------------------------
Estimated # of Participating Group Practices............... 500
Estimated # of Burden Hours Per Group Practice to Self- 6
Nominate to Participate in PQRS and the Electronic
Prescribing Incentive Program Under the Group Practice
Reporting Option..........................................
Estimated # of Burden Hours Per Group Practice to Report 79
Quality Measures..........................................
Estimated Total Annual Burden Hours Per Group Practice..... 85
Estimated Total Annual Burden Hours for Group Practices.... 42,500
Estimated Cost Per Group Practice to Self-Nominate to $160.08
Participate in PQRS for the Group Practice Reporting
Option....................................................
Estimated Cost Per Group Practice to Report Quality $6,632.84
Measures..................................................
Estimated Total Annual Cost Per Group Practice............. $6,792.12
Annual Burden Cost for Group Practices..................... $3,396,460
------------------------------------------------------------------------

6. ICRs Regarding Appropriate Use Criteria for Advanced Diagnostic
Imaging Services (Sec. 414.94)
Consistent with section 1834(q) of the statute (as amended by
section 218(b) of the PAMA), CMS is proposing specific requirements for
the development of appropriate use criteria (AUC) that can be specified
under Sec. 414.94 as part of the Medicare program. Provider-led
organizations that use processes meeting certain requirements and want
to be recognized as qualified provider-led entities for the purpose of
this section may apply to CMS.
Applications must be submitted electronically and demonstrate how
the organization's processes meet the requirements specified in Sec.
414.94(c)(1) which include: A systematic literature review of the
clinical topic and relevant imaging studies; AUC development led by at
least one multidisciplinary team with autonomous governance; a process
for identifying team members' conflicts of interest; publication of
individual appropriate use criterion on each organizations Web site;
identification of key decision points for individual criterion as
evidence-based or consensus-based and strength of evidence grading per
a formal, published, and widely recognized methodology; a transparent
process for the timely and continual updating of each criterion; and a
process for developing, modifying or endorsing AUC publicly posted on
the entity's Web site.
To be identified as a qualified provider-led entity by CMS,
organizations must demonstrate adherence to the requirements in their
application and use the application process identified in Sec.
414.94(c)(2) which includes: Only entities meeting the definition of
provider-led entity are eligible to submit applications documenting
adherence to each AUC development requirement; applications may be
accepted annually by January 1; all approved provider-led entities will
be posted to our Web site by June 30; and all qualified provider-led
entities must re-apply every 6 years and applications must be submitted
by January 1 during the 5th year of approval.
The one-time burden associated with the requirements under Sec.
414.94(c)(2) is the time and effort it would take each of the 30
organizations that have expressed interests in developing AUC to
compile, review and submit documentation demonstrating adherence to the
proposed AUC development requirements. We anticipate 30 respondents
based on the number of national professional medical specialty
societies and other organizations that have expressed interest in
participating in this program as well as other entities we have not
heard from but would expect to participate.
We estimate it will take 20 hr at $67.38/hr for a business
operations specialist to compile, prepare and submit the required
information, 5 hr at $99.68/hr for a medical and health services
manager to review and approve the submission, and 5 hr at $187.48/hr
for a physician to review and approve the submission materials. In this
regard, we estimate 30 hr per submission at a cost of $2,783.40 per
organization. In aggregate, we estimate 900 hr (30 hr x 30 submissions)
at $83,502 ($2,783.40 x 30 submissions).
After the anticipated initial 30 respondents, we expect less than
10 applicants to apply to become qualified provider-led entities
annually. Since we estimate fewer than ten respondents, the information
collection requirements are exempt (5 CFR 1320.3(c)) from the
requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et
seq).
Qualified provider-led entities must re-apply every 6 years.
Therefore in years 7-10, we expect that the initial 30 entities will
re-apply. The ongoing burden for re-applying is expected to be half the
burden of the initial application process. The provider-led entity will
be able to make modifications to their original application which
should result in a burden of 10 hr at $67.38/hr for a business
operations specialist to compile, prepare and submit the required
information, 2.5 hr at $99.68/hr for a medical and health services
manager to review and approve the submission, and 2.5 hr at $187.48/hr
for a physician to review and approve the submission materials.
Annually, we estimate 15 hr per submission at a cost of $1,391.70 per
organization. In aggregate, we estimate 450 hr (15 hr x 30 submissions)
at $41,751 ($1,391.70 x 30 submissions).
The proposed requirements and burden will be submitted to OMB under
control number 0938-New (CMS-10570).

[[Page 41937]]

7. ICRs Regarding the Comprehensive Primary Care (CPC) Initiative and
the Medicare EHR Incentive Program (Section L of This Preamble)
Section L outlines an aligned reporting option between the
Comprehensive Primary Care (CPC) initiative and the Medicare EHR
Incentive Program whereby a practice site participating in CPC can
report at least nine clinical quality measures as defined by the model
that are across three domains and receive credit for reporting to the
model as well as receive credit for the clinical quality measure
reporting requirement of the Medicare EHR Incentive Program. While the
reporting of quality measures is an information collection, the
requirement is exempt from the PRA in accordance with section
1115A(d)(3) of the Social Security Act.
8. ICRs Regarding the Medicare Shared Savings Program (Section M of
This Preamble)
While the proposed measures discussed in section M of this preamble
is a collection of information, section 3022 of the Affordable Care Act
exempts any collection of information associated with the Medicare
Shared Savings Program from the requirements of the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.). Consequently, we are not setting
out any burden for OMB approval.

C. Summary of Proposed Annual Burden Estimates

Table 44--Proposed Annual Recordkeeping and Reporting Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total
Section(s) in title 42 of the OMB No. (CMS ID Respondents Responses Burden per annual Labor rate for Total cost
CFR No.) (total) response burden (hr) reporting ($/hr) ($)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Part 405, subpart D............ 0938-0730 (CMS-R- -450............. -450 2 hr.............. -900 67.38............. -60,642
234).
405.445(a)..................... 0938-0730 (CMS-R- 60............... 60 10 min............ 10 67.38............. 674
234).
405.2462(g)(3)................. 0938-New (CMS- 4,000............ 8,964,208 3.5 min........... 522,912.13 26.68............. 13,951,296
10568).
414.90 and section K of this 0938-1059 (CMS- 350,000 (claims- 54 (9 x 6) 5.2 hr (5 hr + 12 5,528,488 varies (see Table 364,021,000
preamble. 10276). based reporting). min). 1).
212,000 212,000 8.083 hr.......... 1,713,596 varies (see Table 83,157,000
(qualified 2).
registry-based
and QCDR-based
reporting).
50,000 (EHR-based 50,000 9................. 450,000 varies (see Table 23,462,000
reporting). 3).
500 (GPRO web 500 85................ 42,500 varies (see Table 3,396,460
interface). 4).
414.94(c)(1) and (2)........... 0938-New (CMS- 30............... 30 5 hr.............. 150 187.48............ 28,113
10570).
5 hr.............. 150 99.68............. 14,952
20 hr............. 600 67.38............. 40,332
---------------------------------------------------------------------------------
Total...................... .................. ................. .............. .................. 8,257,506 .................. 488,011,185
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Submission of PRA-Related Comments

We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection and recordkeeping
requirements. These requirements are not effective until they have been
approved by the OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections discussed above, please visit CMS' Web
site at www.cms.hhs.gov/[email protected]">www.cms.hhs.gov/[email protected], or call the Reports
Clearance Office at 410-786-1326.
We invite public comments on these potential information collection
requirements. If you wish to comment, please submit your comments
electronically as specified in the ADDRESSES section of this proposed
rule and identify the rule (CMS-1631-P).
PRA-related comments must be received on/by September 8, 2015.

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.

VI. Regulatory Impact Analysis

A. Statement of Need

This proposed rule is necessary to make payment and policy changes
under the Medicare PFS and to make required statutory changes under the
Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and the
Achieving a Better Life Experience Act of 2014 (ABLE). This proposed
rule is also necessary to make changes to Part B payment policy and
other Part B related policies.

B. Overall Impact

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
(February 2, 2013), the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits

[[Page 41938]]

(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory impact
analysis (RIA) must be prepared for major rules with economically
significant effects ($100 million or more in any 1 year). We estimate,
as discussed below in this section, that the PFS provisions included in
this proposed rule will redistribute more than $100 million in 1 year.
Therefore, we estimate that this rulemaking is ``economically
significant'' as measured by the $100 million threshold, and hence also
a major rule under the Congressional Review Act. Accordingly, we have
prepared a RIA that, to the best of our ability, presents the costs and
benefits of the rulemaking. The RFA requires agencies to analyze
options for regulatory relief of small entities. For purposes of the
RFA, small entities include small businesses, nonprofit organizations,
and small governmental jurisdictions. Most hospitals, practitioners and
most other providers and suppliers are small entities, either by
nonprofit status or by having annual revenues that qualify for small
business status under the Small Business Administration standards. (For
details see the SBA's Web site at http://www.sba.gov/content/table-small-business-size-standards (refer to the 620000 series)).
Individuals and States are not included in the definition of a small
entity.
The RFA requires that we analyze regulatory options for small
businesses and other entities. We prepare a regulatory flexibility
analysis unless we certify that a rule would not have a significant
economic impact on a substantial number of small entities. The analysis
must include a justification concerning the reason action is being
taken, the kinds and number of small entities the rule affects, and an
explanation of any meaningful options that achieve the objectives with
less significant adverse economic impact on the small entities.
Approximately 95 percent of practitioners, other providers and
suppliers are considered to be small entities, based upon the SBA
standards. There are over 1 million physicians, other practitioners,
and medical suppliers that receive Medicare payment under the PFS.
Because many of the affected entities are small entities, the analysis
and discussion provided in this section as well as elsewhere in this
proposed rule is intended to comply with the RFA requirements.
In addition, section 1102(b) of the Act requires us to prepare an
RIA if a rule may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis must conform
to the provisions of section 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 anticipated costs and benefits on State,
local, or tribal governments or on the private sector before issuing
any rule whose mandates require spending in any 1 year of $100 million
in 1995 dollars, updated annually for inflation. In 2015, that
threshold is approximately $144 million. This proposed rule would
impose no mandates on state, local, or tribal governments or on the
private sector.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on state
and local governments, preempts state law, or otherwise has Federalism
implications. Since this regulation does not impose any costs on state
or local governments, the requirements of Executive Order 13132 are not
applicable.
We have prepared the following analysis, which together with the
information provided in the rest of this preamble, meets all assessment
requirements. The analysis explains the rationale for and purposes of
this proposed rule; details the costs and benefits of the rule;
analyzes alternatives; and presents the measures we would use to
minimize the burden on small entities. As indicated elsewhere in this
proposed rule, we are proposing to implement a variety of changes to
our regulations, payments, or payment policies to ensure that our
payment systems reflect changes in medical practice and the relative
value of services, and to implement statutory provisions. We provide
information for each of the policy changes in the relevant sections of
this proposed rule. We are unaware of any relevant federal rules that
duplicate, overlap, or conflict with this proposed rule. The relevant
sections of this proposed rule contain a description of significant
alternatives if applicable.

C. Changes in Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and MP RVUs
Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or
decreases in RVUs may not cause the amount of expenditures for the year
to differ by more than $20 million from what expenditures would have
been in the absence of these changes. If this threshold is exceeded, we
make adjustments to preserve budget neutrality.
Our estimates of changes in Medicare revenues for PFS services
compare payment rates for CY 2015 with proposed payment rates for CY
2016 using CY 2014 Medicare utilization. The payment impacts in this
proposed rule reflect averages by specialty based on Medicare
utilization. The payment impact for an individual physician could vary
from the average and would depend on the mix of services the
practitioner furnishes. The average percentage change in total revenues
would be less than the impact displayed here because practitioners and
other entities generally furnish services to both Medicare and non-
Medicare patients. In addition, practitioners and other entities may
receive substantial Medicare revenues for services under other Medicare
payment systems. For instance, independent laboratories receive
approximately 83 percent of their Medicare revenues from clinical
laboratory services that are paid under the Clinical Lab Fee Schedule.
The annual update to the PFS conversion factor (CF) was previously
calculated based on a statutory formula; for details about this
formula, we refer readers to the CY 2015 PFS final rule with comment
period (79 FR 67741 through 67742). The Medicare Access and CHIP
Reauthorization Act (MACRA) of 2015 established the update factor for
calendar years 2015 through 2025. To calculate the conversion factor
for the update year, we multiply the product of the current year
conversion factor and the update factor by the budget neutrality
adjustment. We estimate the CY 2016 PFS conversion factor to be
$36.1096, which reflects a budget neutrality adjustment of 0.9999 and
the 0.5 percent update factor specified under MACRA. We estimate the CY
2016 anesthesia conversion factor to be $22.6296, which reflects the
0.9999 budget neutrality adjustment, a 0.99602 anesthesia fee schedule
adjustment practice expense and malpractice adjustment, and the 0.5
percent update specified under the MACRA. We note that Section 220(d)
of the PAMA added

[[Page 41939]]

a new paragraph at section 1848(c)(2)(O) of the Act to establish an
annual target for reductions in PFS expenditures resulting from
adjustments to relative values of misvalued codes. Under section
1848(c)(2)(O)(ii) of the Act, if the net reduction in expenditures for
the year is equal to or greater than the target for the year, reduced
expenditures attributable to such adjustments shall be redistributed in
a budget-neutral manner within the PFS in accordance with the existing
budget neutrality requirement under section 1848(c)(2)(B)(ii)(II) of
the Act.
As we discuss in section II.F.4 of this proposed rule, because CY
2016 represents a transition year in our new process of proposing
values for new, revised and misvalued codes in the proposed rule,
rather than establishing them as interim final in the final rule with
comment period, we will not be able to calculate a realistic estimate
of the target amount at the time the proposed rule is published.
Therefore, we did not incorporate the impact of the target into the
calculation of the proposed conversion factor. However, we did estimate
the net reduction in expenditures as a result of proposed adjustments
to the relative value established for misvalued codes in this proposed
rule, not including interim final changes that will be established in
the CY 2016 PFS final rule. The net reduction is approximately 0.25
percent of the estimated amount of expenditures under the fee schedule
for CY 2016.
Table 45 shows the payment impact on PFS services of the proposals
contained in this proposed rule. To the extent that there are year-to-
year changes in the volume and mix of services provided by
practitioners, the actual impact on total Medicare revenues will be
different from those shown in Table 45 (CY 2016 PFS Proposed Rule
Estimated Impact on Total Allowed Charges by Specialty). The following
is an explanation of the information represented in Table 45.
Column A (Specialty): Identifies the specialty for which
data is shown.
Column B (Allowed Charges): The aggregate estimated PFS
allowed charges for the specialty based on CY 2014 utilization and CY
2015 rates. That is, allowed charges are the PFS amounts for covered
services and include coinsurance and deductibles (which are the
financial responsibility of the beneficiary). These amounts have been
summed across all services furnished by physicians, practitioners, and
suppliers within a specialty to arrive at the total allowed charges for
the specialty.
Column C (Impact of Work RVU Changes): This column shows
the estimated CY 2016 impact on total allowed charges of the proposed
changes in the work RVUs, including the impact of changes due to
potentially misvalued codes.
Column D (Impact of PE RVU Changes): This column shows the
estimated CY 2016 impact on total allowed charges of the proposed
changes in the PE RVUs.
Column E (Impact of RVU Changes): This column shows the
estimated CY 2016 impact on total allowed charges of the proposed
changes in the MP RVUs, which are primarily driven by the required
five-year review and update of MP RVUs.
Column F (Combined Impact): This column shows the
estimated CY 2016 combined impact on total allowed charges of all the
proposed changes in the previous columns. Column F may not equal the
sum of columns C, D, and E due to rounding.

Table 45--CY 2016 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty *
----------------------------------------------------------------------------------------------------------------
Allowed Impact of work Impact of PE Impact of MP Combined
Specialty charges (mil) RVU changes % RVU changes % RVU changes % Impact ** %
(A) (B) (C) (D) (E) (F)
----------------------------------------------------------------------------------------------------------------
TOTAL........................... $88,408 0 0 0 0
ALLERGY/IMMUNOLOGY.............. 220 0 1 0 1
ANESTHESIOLOGY.................. 1,959 0 2 -2 0
AUDIOLOGIST..................... 60 0 -1 1 -0
CARDIAC SURGERY................. 340 0 0 0 0
CARDIOLOGY...................... 6,462 0 0 0 0
CHIROPRACTOR.................... 781 0 0 0 0
CLINICAL PSYCHOLOGIST........... 713 0 0 0 0
CLINICAL SOCIAL WORKER.......... 552 0 0 0 0
COLON AND RECTAL SURGERY........ 160 -1 0 -1 -1
CRITICAL CARE................... 293 0 0 0 0
DERMATOLOGY..................... 3,207 0 0 0 1
DIAGNOSTIC TESTING FACILITY..... 719 0 1 0 1
EMERGENCY MEDICINE.............. 3,099 0 0 0 0
ENDOCRINOLOGY................... 452 0 0 0 0
FAMILY PRACTICE................. 6,043 0 0 0 0
GASTROENTEROLOGY................ 1,829 -2 -1 -1 -5
GENERAL PRACTICE................ 471 0 0 0 0
GENERAL SURGERY................. 2,186 0 0 0 0
GERIATRICS...................... 213 0 0 0 0
HAND SURGERY.................... 169 0 1 0 1
HEMATOLOGY/ONCOLOGY............. 1,781 0 0 0 0
INDEPENDENT LABORATORY.......... 823 1 8 0 9
INFECTIOUS DISEASE.............. 655 0 0 0 0
INTERNAL MEDICINE............... 10,964 0 0 0 0
INTERVENTIONAL PAIN MGMT........ 715 0 1 0 1
INTERVENTIONAL RADIOLOGY........ 296 0 1 0 1
MULTISPECIALTY CLINIC/OTHER PHYS 95 0 0 0 0
NEPHROLOGY...................... 2,187 0 0 0 0
NEUROLOGY....................... 1,512 0 0 0 0
NEUROSURGERY.................... 770 0 0 -1 -1
NUCLEAR MEDICINE................ 46 0 0 0 0

[[Page 41940]]

NURSE ANES/ANES ASST............ 1,181 0 2 -2 0
NURSE PRACTITIONER.............. 2,528 0 0 0 0
OBSTETRICS/GYNECOLOGY........... 664 0 0 0 0
OPHTHALMOLOGY................... 5,490 0 0 0 0
OPTOMETRY....................... 1,167 0 0 0 0
ORAL/MAXILLOFACIAL SURGERY...... 45 0 0 0 0
ORTHOPEDIC SURGERY.............. 3,653 0 0 0 0
OTHER........................... 25 0 0 0 0
OTOLARNGOLOGY................... 1,195 0 -1 0 0
PATHOLOGY....................... 1,316 4 4 0 8
PEDIATRICS...................... 59 0 0 0 0
PHYSICAL MEDICINE............... 1,027 0 0 0 0
PHYSICAL/OCCUPATIONAL THERAPY... 3,077 0 0 0 0
PHYSICIAN ASSISTANT............. 1,716 0 0 0 0
PLASTIC SURGERY................. 371 0 0 0 1
PODIATRY........................ 1,978 0 0 0 0
PORTABLE X-RAY SUPPLIER......... 103 0 0 0 0
PSYCHIATRY...................... 1,300 0 0 0 0
PULMONARY DISEASE............... 1,769 0 0 0 0
RADIATION ONCOLOGY.............. 1,769 0 -3 0 -3
RADIATION THERAPY CENTERS....... 52 0 -9 0 -9
RADIOLOGY....................... 4,472 0 0 0 0
RHEUMATOLOGY.................... 534 0 0 0 0
THORACIC SURGERY................ 346 0 0 0 0
UROLOGY......................... 1,789 0 0 0 0
----------------------------------------------------------------------------------------------------------------
** Column F may not equal the sum of columns C, D, and E due to rounding.

2. CY 2016 PFS Impact Discussion
a. Changes in RVUs
The most widespread specialty impacts of the RVU changes are
generally related to two major factors. The first factor, as discussed
in section II. of this proposed rule, is the number of changes to RVUs
for specific services resulting from the Misvalued Code Initiative,
including the establishment of RVUs for new and revised codes. Several
specialties, including radiation therapy centers, radiation oncology,
and gastroenterology, will experience significant decreases to payments
to services that they frequently furnish as a result of widespread
revisions to the structure and the inputs used to develop RVUs for the
codes that describe particular services. Other specialties, including
pathology and independent laboratories, will experience significant
increases to payments for similar reasons.
The second factor relates to a technical improvement that refines
the MP RVU methodology, which we are proposing to make as part of our
annual update of malpractice RVUs. This technical improvement will
result in small negative impacts to the portion of PFS payments
attributable to malpractice for gastroenterology, colon and rectal
surgery, and neurosurgery.
b. Combined Impact
Column F of Table 45 displays the estimated CY 2016 combined impact
on total allowed charges by specialty of all the proposed RVU changes.
Table 46 (Impact of Proposed Rule on CY 2016 Payment for Selected
Procedures) shows the estimated impact on total payments for selected
high volume procedures of all of the proposed changes. We selected
these procedures for sake of illustration from among the most commonly
furnished by a broad spectrum of specialties. The change in both
facility rates and the nonfacility rates are shown. For an explanation
of facility and nonfacility PE, we refer readers to Addendum A found on
the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/.

Table 46--Impact of Proposed Rule on CY 2016 Payment for Selected Procedures
----------------------------------------------------------------------------------------------------------------
Facility Non Facility
-----------------------------------------------------------------
CPT/HCPCS 1 MOD Short descriptor CY 2015 CY 2016 CY 2015 CY 2016
\2\ \3\ % Change \2\ \3\ % Change
----------------------------------------------------------------------------------------------------------------
11721........... ......... Debride nail 6 or $25.15 $25.64 2 $45.28 $46.22 2
more.
17000........... ......... Destruct premalg 53.90 54.88 2 67.20 68.24 2
lesion.
27130........... ......... Total hip 1,407.87 1,411.02 0 NA NA NA
arthroplasty.
27244........... ......... Treat thigh 1,277.80 1,285.37 1 NA NA NA
fracture.
27447........... ......... Total knee 1,407.52 1,411.38 0 NA NA NA
arthroplasty.
33533........... ......... Cabg arterial 1,952.63 1,963.08 1 NA NA NA
single.
35301........... ......... Rechanneling of 1,203.41 1,204.14 0 NA NA NA
artery.

[[Page 41941]]

43239........... ......... Egd biopsy single/ 154.15 152.72 -1 412.52 409.80 -1
multiple.
66821........... ......... After cataract 316.21 318.10 1 334.90 336.87 1
laser surgery.
66984........... ......... Cataract surg w/ 650.40 646.65 -1 NA NA NA
iol 1 stage.
67210........... ......... Treatment of 508.82 513.07 1 526.79 531.12 1
retinal lesion.
71010........... ......... Chest x-ray 1 NA NA NA 22.64 22.75 0
view frontal.
71010........... 26 Chest x-ray 1 9.34 9.39 1 9.34 9.39 1
view frontal.
77056........... ......... Mammogram both NA NA NA 116.42 117.35 1
breasts.
77056........... 26 Mammogram both 44.56 44.78 0 44.56 44.78 0
breasts.
77057........... ......... Mammogram NA NA NA 83.01 83.40 0
screening.
77057........... 26 Mammogram 35.93 36.11 0 35.93 36.11 0
screening.
77427........... ......... Radiation tx 187.57 196.42 5 187.57 196.42 5
management x5.
88305........... 26 Tissue exam by 39.17 39.72 1 39.17 39.72 1
pathologist.
90935........... ......... Hemodialysis one 73.66 74.01 0 NA NA NA
evaluation.
92012........... ......... Eye exam 53.18 53.79 1 86.24 86.65 0
establish
patient.
92014........... ......... Eye exam&tx estab 80.85 81.24 0 124.69 125.65 1
pt 1/>vst.
93000........... ......... Electrocardiogram NA NA NA 17.25 16.97 -2
complete.
93010........... ......... Electrocardiogram 8.62 8.67 1 8.62 8.67 1
report.
93015........... ......... Cardiovascular NA NA NA 77.26 76.54 -1
stress test.
93307........... 26 Tte w/o doppler 45.99 46.22 0 45.99 46.22 0
complete.
93458........... 26 L hrt artery/ 323.76 324.96 0 323.76 324.96 0
ventricle angio.
98941........... ......... Chiropract manj 3- 35.21 35.03 -1 41.32 41.53 0
4 regions.
99203........... ......... Office/outpatient 77.98 78.35 0 109.60 110.12 0
visit new.
99213........... ......... Office/outpatient 51.38 51.99 1 73.30 74.01 1
visit est.
99214........... ......... Office/outpatient 79.41 79.43 0 108.88 109.04 0
visit est.
99222........... ......... Initial hospital 139.06 139.01 0 NA NA NA
care.
99223........... ......... Initial hospital 205.90 205.80 0 NA NA NA
care.
99231........... ......... Subsequent 39.53 40.08 1 NA NA NA
hospital care.
99232........... ......... Subsequent 73.30 73.65 0 NA NA NA
hospital care.
99233........... ......... Subsequent 105.64 105.79 0 NA NA NA
hospital care.
99236........... ......... Observ/hosp same 220.99 220.97 0 NA NA NA
date.
99239........... ......... Hospital 108.88 109.04 0 NA NA NA
discharge day.
99283........... ......... Emergency dept 62.88 63.18 0 NA NA NA
visit.
99284........... ......... Emergency dept 119.66 119.87 0 NA NA NA
visit.
99291........... ......... Critical care 227.46 227.83 0 279.20 279.82 0
first hour.
99292........... ......... Critical care 113.55 114.10 0 124.33 125.29 1
addl 30 min.
99348........... ......... Home visit est NA NA NA 84.80 85.57 1
patient.
99350........... ......... Home visit est NA NA NA 178.95 180.17 1
patient.
G0008........... ......... Immunization NA NA NA 25.51 25.64 0
admin.
----------------------------------------------------------------------------------------------------------------
\1\ CPT codes and descriptions are copyright 2015 American Medical Association. All Rights Reserved. Applicable
FARS/DFARS apply.
\2\ Payments based on the 2015 conversion factor of 35.9335.
\3\ Payments based on the estimated 2016 conversion factor of $36.1096.

D. Effect of Proposed Changes in Telehealth List

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

E. Other Provisions of the Proposed Regulation

1. Ambulance Fee Schedule
As discussed in section III.A.2 of this proposed rule, section 203
of the Medicare Access and CHIP Reauthorization Act of 2015 amended
section 1834(l)(12)(A) and (l)(13)(A) of the Act to extend the payment
add-ons set forth in those subsections through December 31, 2017. These
statutory ambulance extender provisions are self-implementing. As a
result, there are no policy proposals associated with these provisions
or associated impact in this rule. We are proposing only to correct the
dates in the Code of Federal Regulations (CFR) at Sec.
414.610(c)(1)(ii) and Sec. 414.610(c)(5)(ii) to conform the
regulations to these self-implementing statutory provisions.
For CY 2016 and subsequent CYs, we are proposing to continue
implementation of the revised OMB delineations and the most recent
modifications of the RUCA codes for purposes of payment under the
ambulance fee schedule, as originally finalized and implemented in the
CY 2015 PFS final rule with comment period as corrected (79 FR 67744
through 67750; 79 FR 78716 through 78719). The proposed continued use
of the revised OMB delineations and the updated RUCA codes for CY 2016
and subsequent CYs would mean the continued recognition of urban and
rural boundaries based on the population migration that occurred over a
10-year period, between 2000 and 2010. For the RUCA codes, we would
continue to designate any census tracts falling at or above RUCA level
4.0 as rural areas. In addition, none of the super rural areas would
lose their status based on our continued implementation of the revised
OMB delineations and updated RUCA codes. As discussed in section
III.A.3. of this proposed rule, the implementation of the revised OMB
delineations and updated RUCA codes for CY 2016 and subsequent CYs
would continue to affect whether certain areas are designated as urban
or rural, and whether or not transports would be

[[Page 41942]]

eligible for rural adjustments under the ambulance fee schedule statute
and regulations. Descriptions of our proposals and accompanying
rationale are set forth in more detail in section III.A.3. of this
proposed rule. We estimate that our proposal to continue implementation
of the revised OMB delineations and updated RUCA codes for CY 2016 and
subsequent CYs would result in a minimal fiscal impact on the Medicare
program as compared to CY 2015. We also estimate that our continued
implementation of these geographic delineations would result in a
minimal fiscal impact on ambulance providers and suppliers as compared
to CY 2015, because we would be continuing implementation of the same
revised OMB delineations and updated RUCA codes that were in effect in
CY 2015. We note that there may be minimal impacts due to changes in
ZIP codes based on updates by the USPS that we receive every two
months.
As previously discussed in this section, most providers and
suppliers, including ambulance companies, are small entities, either by
their nonprofit status or by having annual revenues that qualify for
small business status under the Small Business Administration
standards. Although, we do not believe that the proposed continued
implementation of the revised OMB delineations and updated RUCA codes
would have a significant economic impact on ambulance providers and
suppliers as compared to CY 2015, we have included an analysis in
section III.A.3. of this proposed rule describing certain impacts
associated with implementation of these geographic delineations and
have invited public comments on any alternative methods for
implementing the revised OMB delineations and the updated RUCA codes.
As further discussed in section III.A.3. of this proposed rule, Table
16 sets forth an analysis of the number of ZIP codes that changed urban
and rural status in each U.S. state and territory after CY 2014 due to
our implementation of the revised OMB delineations and updated RUCA
codes, using an updated April 2015 USPS ZIP code file, the revised OMB
delineations, and the updated RUCA codes (including the RUCA ZIP code
approximation file discussed in that section).
In addition, we are proposing to revise Sec. 410.41(b) to require
that all Medicare-covered ambulance transports must be staffed by at
least two people who meet both the requirements of applicable state and
local laws where the services are being furnished and the current
Medicare requirements under Sec. 410.41(b). In addition, we are
proposing to revise the definition of Basic Life Support (BLS) in Sec.
414.605 to include the proposed revised staffing requirements discussed
in this section for Sec. 410.41(b). Since we expect ambulance
providers and suppliers are already in compliance with their state and
local laws, we expect that this proposal would have a minimal impact on
ambulance providers and suppliers. Similarly, we do not expect any
significant impact on the Medicare program.
Furthermore, we are proposing to revise Sec. 410.41(b) and the
definition of BLS in Sec. 414.605 to clarify that, for BLS vehicles,
at least one of the staff members must be certified at a minimum as an
EMT-Basic, which we believe would more clearly state our current
policy. Also, for the reasons discussed in section III.A.4. of this
proposed rule, we are proposing to delete the last sentence of our
definition of BLS in Sec. 414.605. Because these proposals do not
change our current policies, we expect that they would have a minimal
impact on ambulance providers and suppliers and do not expect any
significant impact on the Medicare program.
2. Chronic Care Management (CCM) Services for Rural Health Clinics
(RHCs) and Federally Qualified Health Centers (FQHCs)
As discussed in section III.B of this proposed rule, we are
proposing to establish payment, beginning on January 1, 2016, for RHCs
and FQHCs who furnish a minimum of 20 minutes of qualifying CCM
services during a calendar month to patients with multiple (two or
more) chronic conditions that are expected to last at least 12 months
or until the death of the patient, and that place the patient at
significant risk of death, acute exacerbation/decompensation, or
functional decline. We also are proposing that payment for CCM be based
on the PFS national average non-facility payment rate when CPT code
99490 is billed alone or with other payable services on a RHC or FQHC
claim.
In the CY 2015 PFS final rule (79 FR 67715 through 67730), we
estimated that 65 percent of Medicare beneficiaries in fee-for-service
practices had 2 or more chronic conditions, and that 30 percent of
those beneficiaries would choose to receive CCM services. We also
estimated that for those patients, there would be an average of 6 CCM
billable payments per year.
We do not have the data to determine the percentage of Medicare
beneficiaries in RHCs or FQHCs with 2 or more chronic conditions, but
we have no reason to believe that the percentage would be different for
patients in a RHC or FQHC. We also assume that the rate of acceptance,
and the number of billable visits per year, would be the same for RHCs
and FQHCs as it is for practitioners in non-RHC and FQHC settings that
are billing under the PFS.
Based on these assumptions, we estimate that the 5-year cost impact
of CCM payment in RHCs and FQHCs would be $ 850 million, of which $210
million is the premium offset and $640 million is the Part B payment.
We estimate that the 10-year cost impact of CCM payment in RHCs and
FQHCs would be $1.970 billion, of which $480 million is the premium
offset and $1.490 billion is the Part B payment.
These estimates were derived by first multiplying the number of
Medicare beneficiaries in RHCs and FQHCs per year by 0.65 percent, (the
estimated percentage of Medicare beneficiaries with 2 or more chronic
conditions). This number was then multiplied by 0.30 (the estimated
percentage of Medicare beneficiaries with 2 or more chronic conditions
that will choose to receive CCM services). This number was then
multiplied by $42.91 (the national average payment rate per beneficiary
per calendar month). Finally, this number was multiplied by 6 (the
estimated number of CCM payments per beneficiary receiving CCM
services). Table 47 provides the yearly estimates (figures are in
millions):

Table 47--Yearly Estimates
[In millions]
--------------------------------------------------------------------------------------------------------------------------------------------------------
5 Year 10 Year
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 impact 2016- impact 2016-
2020 2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY Cash Impact--Part B:
Benefits........................ $90 $170 $190 $200 $200 $210 $220 $220 $230 $230 $850 $1,970

[[Page 41943]]

Premium Offset.................. -20 -40 -50 -50 -50 -50 -50 -50 -50 -60 -210 -480
-------------------------------------------------------------------------------------------------------------------
Total Part B................ 70 130 140 150 150 160 170 170 170 180 640 1,490
--------------------------------------------------------------------------------------------------------------------------------------------------------

3. Healthcare Common Procedure Coding System (HCPCS) Coding for Rural
Health Clinics (RHCs)
As discussed in section III.C. of this proposed rule, we are
proposing to require HCPCS coding for all services furnished by RHCs to
Medicare beneficiaries effective for dates of service on or after
January 1, 2016. There will be no cost impact on the Medicare program
since this proposal does not change the payment methodology for RHC
services. This proposal would necessitate some RHCs to make changes to
their billing practices; however, we estimate no significant cost
impact on RHCs.
4. Payment to Grandfathered Tribal FQHCs That Were Provider-Based
Clinics on or Before April 7, 2000
As discussed in section III.D. of this proposed rule, we are
proposing that clinics that were provider-based to an IHS hospital on
or before April 7, 2000, and are now tribally-operated clinics
contracted or compacted under the ISDEAA, may seek to become certified
as grandfathered tribal FQHCs. We also propose that these grandfathered
tribal FQHCs retain their Medicare outpatient per visit payment rate,
as set annually by the IHS, rather than the FQHC PPS per visit base
rate of $158.85. Since we are not proposing any changes to their
payment rate, there will be no cost impact as a result of this
proposal.
5. Part B Drugs--Payment for Biosimilar Biological Products Under
Section 1847A
In section III.E. of this rule we discussed the payment of
biosimilar biological products under section 1847A of the Act and
proposed to clarify existing regulation text. The updated regulation
text states that the payment amount for a biosimilar biological product
is based on the average sales prices (ASP) of all NDCs assigned to the
biosimilar biological products included within the same billing and
payment code.
We anticipate that biosimilar biological products will have lower
ASPs than the corresponding reference products, and we expect the
Medicare Program will realize savings from the utilization of
biosimilar biological products. However, at the time of writing this
proposed rule, we have not yet received ASP data for any biosimilar
biological products that have been approved under the FDA's biosimilar
approval pathway. Further, it is not clear how many biosimilar products
will be approved, when approval and marketing of various products will
occur, what the market penetration of biosimilars in Medicare will be,
and what the cost differences between the biosimilars as well as the
price differences between the biosimilars and the reference products
will be. Therefore, using available data, we are not able to quantify
with certainty the potential savings to Medicare part B. Similarly, we
are not able to quantify the impact, if any, on physician offices that
administer biosimilar biological products.
6. Appropriate Use Criteria for Advanced Diagnostic Imaging Services
We are proposing and requesting public comment on Appropriate Use
Criteria development process requirements as well as an application
process that organizations must comply with to become qualified
provider-led entities. These proposals would not impact CY 2016
physician payments under the PFS.
7. Oncology Care Model and Overlap With Care Management Services Under
PFS
The participation requirements and financial incentives of the
Oncology Care Model (OCM) are outlined in the model's Request for
Applications (http://innovation.cms.gov/initiatives/Oncology-Care/) and
in the model's announcement in the Federal Register on February 17,
2015 (80 FR 8323). The proposals for OCM set forth in the CY 2016 MPFS
proposed rule articulate restrictions in OCM providers' ability to bill
the model's Per-Beneficiary-Per-Month (PBPM) fee and for other MPFS
care coordination services in the same month for the same beneficiary,
given that the enhanced services required of each overlap in scope.
Since the proposed policies are designed to limit the likelihood that
Medicare double pays for similar services, these proposals are not
expected to have a fiscal impact on the Medicare program.
8. Physician Compare
We do not estimate any impact as a result of the proposals for the
Physician Compare Web site.
9. Physician Quality Reporting System
a. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals: Reporting in General
According to the 2013 Reporting Experience, ``more than 1.25
million eligible professionals were eligible to participate in the 2013
PQRS, Medicare Shared Savings Program, and Pioneer ACO Model.'' \10\ In
this burden estimate, we assume that 1.25 million eligible
professionals, the same number of eligible professionals eligible to
participate in the PQRS in 2013, will be eligible to participate in the
PQRS. Since all eligible professionals are subject to the 2018 PQRS
payment adjustment, we estimate that ALL 1.25 million eligible
professionals will participate in the PQRS in 2016 for purposes of
meeting the criteria for satisfactory reporting (or, in lieu of
satisfactory reporting, satisfactory participation in a QCDR) for the
2018 PQRS payment adjustment.
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\10 \ Centers for Medicare and Medicaid Services, 2012 Reporting
Experience Including Trends (2007-2013): Physician Quality Reporting
System and Electronic Prescribing (eRx) Incentive Program, March 14,
2014, at xiii.
---------------------------------------------------------------------------

Historically, the PQRS has never experienced 100 percent
participation in reporting for the PQRS. In the 2013 PQRS and eRx
Reporting Experience Report more than 1.25 million professionals were
eligible to participate in the 2013 PQRS (including group practices
reporting under the GPRO, Medicare Shared Savings Program, and Pioneer
ACO Model). Therefore, we believe that although 1.25 million eligible
professionals will be subject to the 2018 PQRS payment adjustment, not
all eligible participants will actually report quality measures data
for purposes of the 2018 PQRS payment adjustment. In this burden
estimate, we will only provide burden estimates for the eligible
professionals and group

[[Page 41944]]

practices who attempt to submit quality measures data for purposes of
the 2018 PQRS payment adjustment.
In 2013, 641,654 eligible professionals (51 percent) eligible
professionals (including those who belonged to group practices that
reported under the GPRO and eligible professionals within an ACO that
participated in the PQRS via the GPRO) participated in the PQRS,
Medicare Shared Savings Program, or Pioneer ACO Model.\11\ We expect to
see a steady increase in participation in reporting for the PQRS in
2016 than 2013. Eligible professionals have become more familiar with
the PQRS payment adjustments since eligible professionals are currently
experiencing the implementation of the first PQRS payment adjustment--
the 2015 PQRS payment adjustment. Therefore, we estimate that we will
see a 70 percent participation rate in 2016. Therefore, we estimate
that 70 percent of eligible professionals (or approximately 875,000
eligible professionals) will report quality measures data for purposes
of the 2018 PQRS payment adjustment.
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\11\ Id. at XV.
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With respect to the PQRS, the burden associated with the
requirements of this voluntary reporting initiative is the time and
effort associated with individual eligible professionals and group
practices identifying applicable quality measures for which they can
report the necessary information, selecting a reporting option, and
reporting the information on their selected measures or measures group
to CMS using their selected reporting option. We assume that most
eligible professionals participating in the PQRS will attempt to meet
both the criteria for satisfactory reporting for the 2018 PQRS payment
adjustment.
We believe the labor associated with eligible professionals and
group practices reporting quality measures data in the PQRS is
primarily handled by an eligible professional's or group practice's
billing clerk or computer analyst trained to report quality measures
data. Therefore, we will consider the hourly wage of a billing clerk
and computer analyst in our estimates. For purposes of this burden
estimate, we will assume that a billing clerk will handle the
administrative duties associated with participating in the PQRS.
For individual eligible professionals, the burden associated with
the requirements of this reporting initiative is the time and effort
associated with eligible professionals identifying applicable quality
measures for which they can report the necessary information,
collecting the necessary information, and reporting the information
needed to report the eligible professional's measures. We believe it is
difficult to accurately quantify the burden because eligible
professionals may have different processes for integrating the PQRS
into their practice's work flows. Moreover, the time needed for an
eligible professional to review the quality measures and other
information, select measures applicable to his or her patients and the
services he or she furnishes to them, and incorporate the use of
quality data codes into the office work flows is expected to vary along
with the number of measures that are potentially applicable to a given
professional's practice. Since eligible professionals are generally
required to report on at least 9 measures covering at least 3 National
Quality Strategy domains criteria for satisfactory reporting (or, in
lieu of satisfactory reporting, satisfactory participation in a QCDR)
for the 2018 PQRS payment adjustment, we will assume that each eligible
professional reports on an average of 9 measures for this burden
analysis.
For eligible professionals who are participating in PQRS, we will
assign 5 total hours as the amount of time needed for an eligible
professional's billing clerk to review the PQRS Measures List, review
the various reporting options, select the most appropriate reporting
option, identify the applicable measures or measures groups for which
they can report the necessary information, review the measure
specifications for the selected measures or measures groups, and
incorporate reporting of the selected measures or measures groups into
the office work flows. The measures list contains the measure title and
brief summary information for the eligible professional to review.
Assuming the eligible professional has received no training from his/
her specialty society, we estimate it will take an eligible
professional's billing clerk up to 2 hours to review this list, review
the reporting options, and select a reporting option and measures on
which to report. If an eligible professional has received training,
then we believe this would take less time. CMS believes 3 hours is
plenty of time for an eligible professional to review the measure
specifications of 9 measures or 1 measures group they select to report
for purposes of participating in PQRS and to develop a mechanism for
incorporating reporting of the selected measures or measures groups
into the office work flows. Therefore, we believe that the start-up
cost for an eligible professional to report PQRS quality measures data
is 5 hr x $26.68/hr = $127.25.
We continue to expect the ongoing costs associated with PQRS
participation to decline based on an eligible professional's
familiarity with and understanding of the PQRS, experience with
participating in the PQRS, and increased efforts by CMS and
stakeholders to disseminate useful educational resources and best
practices.
We believe the burden associated with actually reporting the
quality measures will vary depending on the reporting mechanism
selected by the eligible professional. As such, we break down the
burden estimates by eligible professionals and group practices
participating in the GPRO according to the reporting mechanism used.
b. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals: Claims-Based Reporting Mechanism
According to the 2011 PQRS and eRx Experience Report, 229,282 of
the 320,422 eligible professionals (or 72 percent) of eligible
professionals used the claims-based reporting mechanism. According to
the 2012 Reporting Experience, 248,206 eligible professionals
participated in the PQRS using the claims-based reporting mechanism in
2012.\12\ According to the 2013 PQRS and eRx Experience Report, 641,654
eligible professionals participated as individuals or group practices
through one of the PQRS reporting mechanism, a 47 percent increase from
those that participated in 2012 (435,931). Through the individual
claims-based reporting mechanism, 331,668 of those eligible
professionals (or 52 percent) reported using this mechanism. Increased
claims based reporting to 350,000 (approximately 5 percent increase
over 2013). Though claims reporting was declining, we did see an
increase in 2013 once the payment adjustment was applied to all
participants, so we assume a slight increase in 2016.
---------------------------------------------------------------------------

\12\ Id. at xvi. See Figure 4.
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According to the historical data cited above, although the claims-
based reporting mechanism is still the most widely-used reporting
mechanism, we are seeing a decline in the use of the claims-based
reporting mechanism in the PQRS. There was a slight increase in 2013,
which may be reflected by the use of administrative claims-based
reporting mechanism by individual eligible professionals and group
practices only

[[Page 41945]]

for the 2015 PQRS payment adjustment (in CY2013).
Although these eligible professionals continue to participate in
the PQRS, these eligible professionals have started to shift towards
the use of other reporting mechanisms--mainly the GPRO web interface
(whether used by a PQRS GPRO or an ACO participating in the PQRS via
the Medicare Shared Savings Program), registry, or the EHR-based
reporting mechanisms. For purposes of this burden estimate, based on
PQRS participation using the claims-based reporting mechanism in 2012
and 2013, we will assume that approximately 350,000 eligible
professionals will participate in the PQRS using the claims-based
reporting mechanism.
For the claims-based reporting option, eligible professionals must
gather the required information, select the appropriate quality data
codes (QDCs), and include the appropriate QDCs on the claims they
submit for payment.
We estimate the cost for an eligible professional to review the
list of quality measures or measures groups, identify the applicable
measures or measures groups for which they can report the necessary
information, incorporate reporting of the selected measures into the
office work flows, and select a PQRS reporting option to be
approximately $419.80 per eligible professional ($83.96 per hour x 5
hours).
Based on our experience with the Physician Voluntary Reporting
Program (PVRP), we continue to estimate that the time needed to perform
all the steps necessary to report each measure (that is, reporting the
relevant quality data code(s) for 9 measures measure) would range from
15 seconds (0.25 minutes) to over 12 minutes for complicated cases and/
or measures, with the median time being 1.75 minutes. To report 9
measures, we estimate that it would take approximately 2.25 minutes to
108 minutes to perform all the steps necessary to report 9 measures.
Per measure, at an average labor cost of $83.96/hour per practice,
the cost associated with this burden will range from $0.17 in labor to
about $8.40 in labor time for more complicated cases and/or measures,
with the cost for the median practice being $1.20. To report 9
measures, using an average labor cost of $42/hour, we estimated that
the time cost of reporting for an eligible professional via claims
would range from $3.15 (2.25 minutes or 0.0375 hours x $83.96/hour) to
$151.13 (108 minutes or 1.8 hours x $83.96/hour) per reported case.
The total estimated annual burden for this requirement will also
vary along with the volume of claims on which quality data is reported.
In previous years, when we required reporting on 80 percent of eligible
cases for claims-based reporting, we found that on average, the median
number of reporting instances for each of the PQRS measures was 9.
Since we reduced the required reporting rate by over one-third to 50
percent, then for purposes of this burden analysis we will assume that
an eligible professional or eligible professional in a group practice
will need to report each selected measure for 6 reporting instances.
The actual number of cases on which an eligible professional or group
practice is required to report quality measures data will vary,
however, with the eligible professional's or group practice's patient
population and the types of measures on which the eligible professional
or group practice chooses to report (each measure's specifications
includes a required reporting frequency). For the 2018 payment
adjustment, EPs will also report on 1 cross-cutting measure if they see
at least 1 Medicare patient. However, we do not see any additional
burden impact as they are still reporting on the same number of
measures.
c. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals and Group Practices: Qualified Registry-Based and
Qualified Clinical Data Registry (QCDR)-Based Reporting Mechanisms
In 2011, approximately 50,215 (or 16 percent) of the 320,422
eligible professionals participating in PQRS used the qualified
registry-based reporting mechanism. In 2012, 36,473 eligible
professionals reported individual measures via the registry-based
reporting mechanism, and 10,478 eligible professionals reporting
measures groups via the registry-based reporting mechanism in 2012.\13\
According to the 2013 Reporting Experience, approximately 67,896
eligible professionals participated in the PQRS using the registry-
based reporting mechanism (51,473 for individual measures and 16,423
for measures groups). Please note that we currently have no data on
participation in the PQRS via a Qualified Clinical Data Registry
(QCDR), as 2014 is the first year in which an eligible professional may
participate in the PQRS via a QCDR.
---------------------------------------------------------------------------

\13\ Id. at xvi. See Figure 4.
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We believe that the rest of the eligible professionals not
participating in other PQRS reporting mechanisms will use either the
registry or QCDR reporting mechanisms for the following reasons:
The PQRS measures set is moving away from use of claims-
based measures and moving towards the use of registry-based measures
We believe the number of QCDR vendors will increase as the
QCDR reporting mechanism evolves.
Therefore, based on these assumptions, we expect to see a
significant jump from 47,000 eligible professionals to approximately
212,000 eligible professionals using either the registry-based
reporting mechanism or QCDR in 2016. We believe the majority of these
eligible professionals will participate in the PQRS using a QCDR, as we
presume QCDRs will be larger entities with more members.
For qualified registry-based and QCDR-based reporting, there will
be no additional time burden for eligible professionals or group
practices to report data to a qualified registry as eligible
professionals and group practices opting for qualified registry-based
reporting or use of a QCDR will more than likely already be reporting
data to the qualified registry for other purposes and the qualified
registry will merely be repackaging the data for use in the PQRS.
Little, if any, additional data will need to be reported to the
qualified registry or QCDR solely for purposes of participation in the
PQRS. However, eligible professionals and group practices will need to
authorize or instruct the qualified registry or QCDR to submit quality
measures results and numerator and denominator data on quality measures
to CMS on their behalf. We estimate that the time and effort associated
with this will be approximately 5 minutes per eligible professional or
eligible professional within a group practice.
Please note that, unlike the claims-based reporting mechanism that
would require an eligible professional to report data to CMS on quality
measures on multiple occasions, an eligible professional would not be
required to submit this data to CMS, as the qualified registry or QCDR
would perform this function on the eligible professional's behalf.
For CY 2014, 90 qualified registries and 50 QCDRs were qualified to
report quality measures data to CMS for purposes of the PQRS.\14\
Therefore, a total of 140 entities are currently classified as
qualified registries and/or QCDRs under the PQRS. Although we believe
the number of qualified registries will remain the same in 2015,

[[Page 41946]]

we believe we will see a slight increase in the number of entities that
become a QCDR in 2015. We estimate that an additional 10 entities
(bringing the total number of QCDRs to 60 in 2015) will become QCDRs in
2015. We attribute this slight increase to entities that wish to become
QCDRs but, for some reason (lack of information regarding the QCDR
option, rejected during the qualification process, the inability to get
its self-nomination info provided in time, etc.), were not selected to
be QCDRs in 2014. Therefore, we estimate that a total of 150 entities
will become qualified registries and/or QCDRs under the PQRS in 2015.
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\14\ The full list of qualified registries for 2014 is available
at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2014QualifiedRegistryVendors.pdf.
---------------------------------------------------------------------------

Qualified registries or QCDRs interested in submitting quality
measures results and numerator and denominator data on quality measures
to CMS on their participants' behalf will need to complete a self-
nomination in order to be considered qualified to submit on behalf of
eligible professionals or group practices unless the qualified registry
or clinical data qualified registry was qualified to submit on behalf
of eligible professionals or group practices for prior program years
and did so successfully. We estimate that the self-nomination process
for qualifying additional qualified registries or qualified clinical
data registries to submit on behalf of eligible professionals or group
practices for the PQRS will involve approximately 1 hour per qualified
registry or qualified clinical data registry to draft the letter of
intent for self-nomination.
In addition to completing a self-nomination statement, qualified
registries and QCDRs will need to perform various other functions, such
as develop a measures flow and meet with CMS officials when additional
information is needed. In addition, QCDRs must perform other functions,
such as benchmarking and calculating their measure results. We note,
however, that many of these capabilities may already be performed by
QCDRs for purposes other than to submit data to CMS for the PQRS. The
time it takes to perform these functions may vary depending on the
sophistication of the entity, but we estimate that a qualified registry
or QCDR will spend an additional 9 hours performing various other
functions related to being a PQRS qualified entity.
We estimate that the staff involved in the qualified registry or
QCDR self-nomination process will have an average labor cost of $83.96/
hour. Therefore, assuming the total burden hours per qualified registry
or QCDR associated with the self-nomination process is 10 hours, we
estimate that the total cost to a qualified registry or QCDR associated
with the self-nomination process will be approximately $839.60 ($83.96
per hour x 10 hours per qualified registry).
The burden associated with the qualified registry-based and QCDR
reporting requirements of the PQRS will be the time and effort
associated with the qualified registry calculating quality measures
results from the data submitted to the qualified registry or QCDR by
its participants and submitting the quality measures results and
numerator and denominator data on quality measures to CMS on behalf of
their participants. We expect that the time needed for a qualified
registry or QCDR to review the quality measures and other information,
calculate the measures results, and submit the measures results and
numerator and denominator data on the quality measures on their
participants' behalf will vary along with the number of eligible
professionals reporting data to the qualified registry or QCDR and the
number of applicable measures. However, we believe that qualified
registries and QCDRs already perform many of these activities for their
participants. Therefore, there may not necessarily be a burden on a
particular qualified registry or QCDR associated with calculating the
measure results and submitting the measures results and numerator and
denominator data on the quality measures to CMS on behalf of their
participants. Whether there is any additional burden to the qualified
registry or QCDR as a result of the qualified registry's or QCDR's
participation in the PQRS will depend on the number of measures that
the qualified registry or QCDR intends to report to CMS and how similar
the qualified registry's measures are to CMS's PQRS measures.
In this proposed rule, we are proposing that group practices of 25
or more eligible professionals must report on CAHPS for PQRS.
Therefore, a group practice of 25 or more eligible professionals would
be required to report on the CAHPS for PQRS, 6 or more measures
covering 2 domains of their choosing. At this point, we do not believe
the requirement to report CAHPS for PQRS adds or reduces the burden to
the group practices, as we consider reporting the CAHPS for PQRS survey
as reporting 3 measures covering 1 domain.
d. Burden Estimate for PQRS Reporting by Individual Eligible
Professionals and Group Practices: EHR-Based Reporting Mechanism
According to the 2011 PQRS and eRx Experience Report, 560 (or less
than 1 percent) of the 320,422 eligible professionals participating in
PQRS used the EHR-based reporting mechanism. In 2012 there was a sharp
increase in reporting via the EHR-based reporting mechanism.
Specifically, according to the 2012 Reporting Experience, 19,817
eligible professionals submitted quality data for the PQRS through a
qualified EHR.\15\ According to the 2013 PQRS and eRx Experience
Report, 23,194 (3.6 percent) eligible professionals participating in
PQRS used the EHR-based reporting mechanism.
---------------------------------------------------------------------------

\15\ Id. at XV.
---------------------------------------------------------------------------

As can be seen in the 2013 Experience Report, the number of
eligible professionals and group practices using the EHR-based
reporting mechanism are steadily increasing as eligible professionals
become more familiar with EHR products and more eligible professionals
participate in programs encouraging use of an EHR, such as the EHR
Incentive Program. In particular, we believe eligible professionals
will transition from using the claims-based to the EHR-based reporting
mechanisms. To account for this anticipated increase, we continue to
estimate that approximately 50,000 eligible professionals, whether
participating as an individual or part of a group practice under the
GPRO, would use the EHR-based reporting mechanism in CY 2016.
For EHR-based reporting, which includes EHR reporting via a direct
EHR product and an EHR data submission vendor's product, the eligible
professional or group practice must review the quality measures on
which we will be accepting PQRS data extracted from EHRs, select the
appropriate quality measures, extract the necessary clinical data from
his or her EHR, and submit the necessary data to the CMS-designated
clinical data warehouse.
For EHR-based reporting for the PQRS, the individual eligible
professional or group practice may either submit the quality measures
data directly to CMS from their EHR or utilize an EHR data submission
vendor to submit the data to CMS on the eligible professional's or
group practice's behalf. To submit data to CMS directly from their EHR,
the eligible professional or eligible professional in a group practice
must have access to a

[[Page 41947]]

CMS-specified identity management system, such as IACS, which we
believe takes less than 1 hour to obtain. Once an eligible professional
or eligible professional in a group practice has an account for this
CMS-specified identity management system, he or she will need to
extract the necessary clinical data from his or her EHR, and submit the
necessary data to the CMS-designated clinical data warehouse. With
respect to submitting the actual data file for the respective reporting
period, we believe that this will take an eligible professional or
group practice no more than 2 hours, depending on the number of
patients on which the eligible professional or group practice is
submitting. We believe that once the EHR is programmed by the vendor to
allow data submission to CMS, the burden to the eligible professional
or group practice associated with submission of data on quality
measures should be minimal as all of the information required to report
the measure should already reside in the eligible professional's or
group practice's EHR.
In this proposed rule, we are proposing that group practices of 25
or more eligible professionals must report on CAHPS for PQRS.
Therefore, a group practice of 25 or more eligible professionals would
be required to report on the CAHPS for PQRS, 6 or more measures
covering 2 domains of their choosing. At this point, we do not believe
the requirement to report CAHPS for PQRS adds or reduces the burden to
the group practices, as we consider reporting the CAHPS for PQRS survey
as reporting 3 measures covering 1 domain.
Please note that, unlike the claims-based reporting mechanism that
would require an eligible professional to report data to CMS on quality
measures on multiple occasions, an eligible professional would not be
required to submit this data to CMS, as the EHR product would perform
this function on the eligible professional's behalf.
e. Burden Estimate for PQRS Reporting by Group Practices Using the GPRO
Web Interface
As noted in the 2011 Experience Report, approximately 200 group
practices participated in the GPRO in 2011. According to the 2012
Reporting Experience, 66 practices participated in the PQRS GPRO.\16\
In addition, 144 ACOs participated in the PQRS GPRO through either the
Medicare Shared Savings Program (112 ACOs) or Pioneer ACO Model (32
practices).\17\ These group practices encompass 134,510 eligible
professionals (or approximately 140,000 eligible professionals).\18\
According to the 2013 PQRS and eRx Experience Report, 677 group
practices self-nominated to participate via the PQRS GPRO (compared to
68 total that self-nominated in 2012), 550 moved on to become PQRS
group practices, another 220 practices were approved by CMS to
participate as Medicare MSSP ACOs, and 23 were eligible under the
Pioneer ACO model. The number of eligible professionals (from the 2013
Experience Report) participating in one of these reporting methods
include: 131,690 in PQRS group practices, 21,678 in Pioneer ACO, and
85,059 in MSSP ACO. Group practices participating in PQRS GPRO are
increasing each year, from roughly 200 group practices in 2011 and
2012, to 860 eligible practices in 2013 (including all GPRO, Pioneer
ACO, and MSSP ACO. However, not all group practices use the Web
Interface to report. We will assume, based on these numbers that 500
group practices (accounting for approximately 228,000 eligible
professional) will continue to participate in the PQRS using the GPRO
Web Interface in 2016.
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\16\ Id. at xv.
\17\ Id. at xvi.
\18\ Id. at 18.
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With respect to the process for group practices to be treated as
satisfactorily submitting quality measures data under the PQRS, group
practices interested in participating in the PQRS through the group
practice reporting option (GPRO) must complete a self-nomination
process similar to the self-nomination process required of qualified
registries. However, since a group practice using the GPRO web
interface would not need to determine which measures to report under
PQRS, we believe that the self-nomination process is handled by a group
practice's administrative staff. Therefore, we estimate that the self-
nomination process for the group practices for the PQRS involves
approximately 2 hours per group practice to review the PQRS GPRO and
make the decision to participate as a group rather than individually
and an additional 2 hours per group practice to draft the letter of
intent for self-nomination, gather the requested TIN and NPI
information, and provide this requested information. It is estimated
that each self-nominated entity will also spend 2 hours undergoing the
vetting process with CMS officials. We assume that the group practice
staff involved in the group practice self-nomination process has an
average practice labor cost of $26.68 per hour. Therefore, assuming the
total burden hours per group practice associated with the group
practice self-nomination process is 6 hours, we estimate the total cost
to a group practice associated with the group practice self-nomination
process to be approximately $160.08 ($26.68 per hour x 6 hours per
group practice).
The burden associated with the group practice reporting
requirements under the GPRO is the time and effort associated with the
group practice submitting the quality measures data. For physician
group practices, this would be the time associated with the physician
group completing the web interface. We estimate that the time and
effort associated with using the GPRO web interface will be comparable
to the time and effort associated to using the PAT. As stated above,
the information collection components of the PAT have been reviewed by
OMB and was approved under OMB control number 0938-0941--Form 10136,
with an expiration date of December 31, 2011 for use in the PGP, MCMP,
and EHR demonstrations. As the GPRO was only recently implemented in
2010, it is difficult to determine the time and effort associated with
the group practice submitting the quality measures data. As such, we
will use the same burden estimate for group practices participating in
the GPRO as we use for group practices participating in the PGP, MCMP,
and EHR demonstrations. Since these changes will not have any impact on
the information collection requirements associated with the PAT and we
will be using the same data submission process used in the PGP
demonstration, we estimate that the burden associated with a group
practice completing data for PQRS under the web interface will be the
same as for the group practice to complete the PAT for the PGP
demonstration. In other words, we estimate that, on average, it will
take each group practice 79 hours to submit quality measures data via
the GPRO web interface at a cost of $83.96 per hour. Therefore, the
total estimated annual cost per group practice is estimated to be
approximately $6,632.84.
10. EHR Incentive Program
The changes to the EHR Incentive Program in section III.L of this
proposed rule would not impact the current burden estimate for the EHR
Incentive Program.
11. Comprehensive Primary Care (CPC) Initiative and Meaningful Use
Aligned Reporting
The establishment of an aligned reporting option between CPC and
the Medicare EHR Incentive Program does

[[Page 41948]]

not impact the CY 2016 payments under PFS.
12. Potential Expansion of the Comprehensive Primary Care (CPC)
Initiative
The solicitation of public input regarding potential CPC expansion
does not impact CY2016 payments under the PFS, because no actual
expansion is being proposed at this time.
13. Medicare Shared Saving Program
The requirements for participating in the Medicare Shared Saving
Program and the impacts of these requirements were established in the
final rule implementing the Medicare Shared Savings Program that
appeared in the Federal Register on November 2, 2011 (76 FR 67802). In
this rule, we are proposing a change to the quality measure set. We are
also proposing to establish rules for maintaining a measure as pay for
reporting, or reverting a pay for performance measure to pay for
reporting if a measure owner determines the measure no longer meets
best clinical practices due to clinical guidelines updates or clinical
evidence suggests that continued application of the measure may result
in harm to patients. In addition, we are proposing to update the
assignment methodology to include claims submitted by electing teaching
amendment hospitals. Since the proposed policies are not expected to
increase the quality reporting burden for ACOs participating in the
Shared Savings Program and their ACO participants or change the
financial calculations, there is no impact for these proposals.
14. Value-Based Payment Modifier and the Physician Feedback Program
Section 1848(p) of the Act requires that we establish a value-based
payment modifier (VM) and apply it to specific physicians and groups of
physicians the Secretary determines appropriate starting January 1,
2015 and to all physicians and groups of physicians by January 1, 2017.
Section 1848(p)(4)(C) of the Act requires the VM to be budget neutral.
Budget-neutrality means that, in aggregate, the increased payments to
high performing physicians and groups of physicians equal the reduced
payments to low performing physicians and groups of physicians. Unless
specified, the proposed changes to the VM in section III.N of this
proposed rule would not impact CY 2016 physician payments under the
PFS. We finalized the VM policies that would impact the CY 2016
physician payments under the PFS in the CY 2013 PFS final rule with
comment period (77 FR 69306 through 69326) and the CY 2014 PFS final
rule with comment period (78 FR 74764 through 74787).
In the CY 2013 PFS final rule with comment period, we finalized
policies to phase-in the VM by applying it starting January 1, 2015 to
payments under the Medicare PFS for physicians in groups of 100 or more
eligible professionals (EPs). We identify a group of physicians as a
single taxpayer identification number (TIN). We apply the VM to the
items and services billed by physicians under the TIN, not to other EPs
that also may bill under the TIN. We established CY 2014 as the
performance period for the VM that will be applied to payments during
CY 2016 (77 FR 69314). We also finalized that we will not apply the VM
in CYs 2015 and 2016 to any group of physicians that is participating
in the Medicare Shared Savings Program, the Pioneer ACO Model, or the
Comprehensive Primary Care Initiative, or other similar Innovation
Center or CMS initiatives (77 FR 69313).
In the CY 2014 PFS final rule with comment period (78 FR 74765-
74770), we finalized a policy to apply the VM in CY 2016 to physicians
in groups with 10 or more EPs. We also adopted a policy to categorize
groups of physicians subject to the VM in CY 2016 based on a group's
participation in the PQRS. Specifically, we categorize groups of
physicians eligible for the CY 2016 VM into two categories. Category 1
includes groups of physicians that (a) meet the criteria for
satisfactory reporting of data on PQRS quality measures through the
GPRO for the CY 2016 PQRS payment adjustment or (b) do not register to
participate in the PQRS as a group practice in CY 2014 and that have at
least 50 percent of the group's eligible professionals meet the
criteria for satisfactory reporting of data on PQRS quality measures as
individuals for the CY 2016 PQRS payment adjustment, or in lieu of
satisfactory reporting, satisfactorily participate in a PQRS-qualified
clinical data registry for the CY 2016 PQRS payment adjustment. For a
group of physicians that is subject to the CY 2016 VM to be included in
Category 1, the criteria for satisfactory reporting (or the criteria
for satisfactory participation, if the PQRS-qualified clinical data
registry reporting mechanism is selected) must be met during the CY
2014 reporting period for the PQRS CY 2016 payment adjustment. For the
CY 2016 VM, Category 2 includes those groups of physicians that are
subject to the CY 2016 VM and do not fall within Category 1. For those
groups of physicians in Category 2, the VM for CY 2016 is -2.0 percent.
In addition, for the CY 2016 VM, we adopted that quality-tiering,
which is the method for evaluating performance on quality and cost
measures for the VM, is mandatory for groups of physicians with 10 or
more EPs. In CY 2016, groups of physicians with between 10 and 99 EPs
would not be subjected to a downward payment adjustment (that is, they
will either receive an upward or neutral adjustment) determined under
the quality-tiering methodology, and groups of physicians with 100 or
more EPs, however, would either receive upward, neutral, or downward
adjustments under the quality-tiering methodology.
Under the quality-tiering approach, each group's quality and cost
composites are classified into high, average, and low categories
depending upon whether the composites are at least one standard
deviation above or below the mean and statistically different from the
mean. We compare the group's quality of care composite classification
with the cost composite classification to determine the VM adjustment
for the CY 2016 payment adjustment period according to the amounts in
Table 48.

Table 48--2016 VM Amounts Under Quality-Tiering
----------------------------------------------------------------------------------------------------------------
Cost/quality Low quality Average quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost............................................... +0.0% * +1.0x * +2.0x
Average Cost........................................... -1.0% +0.0% * +1.0x
High Cost.............................................. -2.0% -1.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups of physicians eligible for an additional +1.0x if (1) reporting Physician Quality Reporting System
quality measures and (2) average beneficiary risk score is in the top 25 percent of all beneficiary risk
scores.

[[Page 41949]]

To ensure budget neutrality, we first aggregate the downward
payment adjustments in Table 48 for those groups in Category 1 with the
-2.0 percent downward payment adjustments for groups of physicians
subject to the VM that fall within Category 2. Using the aggregate
downward payment adjustment amount, we then calculate the upward
payment adjustment factor (x). These calculations will be done after
the performance period has ended.
At the time of this proposed rule, we have not completed the
analysis of the impact of the VM in CY 2016 on physicians in groups
with 10 or more EPs based on their performance in CY 2014. In the CY
2016 PFS final rule with comment period, we will present the actual
number of groups of physicians that will be subject to the VM in CY
2016.
15. Physician Self-Referral Updates
The physician self-referral update provisions are discussed in
section II.P of this proposed rule. Physicians and Designated Health
Services (DHS) entities have been complying with the requirements set
forth in the physician self-referral law for many years, specifically
in regard to clinical laboratory services since 1992 and to referrals
for all other DHS since 1995. The majority of our proposals would
reduce burden by clarifying previous guidance. We believe these
proposals would allow parties to determine with greater certainty
whether their financial relationships comply with an exception.
We also proposed new exceptions and a new definition that would
accommodate legitimate financial arrangements while continuing to
protect against program and patient abuse:
In section II.P.2.A of this proposed rule, we proposed a
limited exception for hospitals, FQHCs, and RHCs that wish to provide
remuneration to physicians to assist with the employment of a non-
physician practitioner. This new exception would promote access to
primary care services, a goal of the Secretary and the Affordable Care
Act.
In section II.P.2.B of this proposed rule, we described
our proposal to revise the physician recruitment exception to add a new
definition of the geographic area served by an FQHC or RHC. This
proposal would provide certainty to FQHCs and RHCs that their physician
recruitment arrangements satisfy the requirements of the exception.
In section II.P.7 of this proposed rule, we proposed a new
exception that would protect timeshare arrangements that meet certain
criteria. This proposal would help ensure beneficiary access to care,
particularly in rural and underserved areas.
To the extent that the new exceptions and definition permit
additional legitimate arrangements to comply with the law, this rule
would reduce the potential costs of restructuring such arrangements,
and the consequences of noncompliance may be avoided entirely.
In section II.P.9.B of this proposed rule, we discussed
our proposal that the physician-owned hospital baseline bona fide
investment level and the bona fide investment level include direct and
indirect ownership and investment interests held by a physician
regardless of whether the physician refers patients to the hospital. We
recognize that some physician-owned hospitals may have relied on
earlier guidance that the ownership or investment interests of non-
referring physicians need not be considered when calculating the
baseline bona fide physician ownership level and that, if one or more
of our proposals described in section II.P.9.B are finalized, may have
revised bona fide investment levels that may exceed the baseline bona
fide investment levels calculated under our current guidance. We seek
public comment on the impact of our proposed regulatory and policy
revisions on physician-owned hospitals and on the measures or actions
physician-owned hospitals would need to undertake to come into
compliance with our proposed revisions.
16. Opt Out Change
We propose revising the regulations governing the requirements and
procedures for private contracts at part 405, subpart D so that they
conform with the statutory changes made by section 106(a) of the MACRA.
We anticipate no or minimal impact as a result of these revisions.

F. Alternatives Considered

This proposed rule contains a range of policies, including some
provisions related to specific statutory provisions. The preceding
preamble provides descriptions of the statutory provisions that are
addressed, identifies those policies when discretion has been
exercised, presents rationale for our final policies and, where
relevant, alternatives that were considered.

G. Impact on Beneficiaries

There are a number of changes in this proposed rule that would have
an effect on beneficiaries. In general, we believe that many of the
proposed changes, including those intended to improve accuracy in
payment through revisions to the inputs used to calculate payments
under the PFS will have a positive impact and improve the quality and
value of care provided to Medicare beneficiaries.
Most of the aforementioned proposed policy changes could result in
a change in beneficiary liability as relates to coinsurance (which is
20 percent of the fee schedule amount if applicable for the particular
provision after the beneficiary has met the deductible). To illustrate
this point, as shown in Table 46, the CY 2015 national payment amount
in the nonfacility setting for CPT code 99203 (Office/outpatient visit,
new) is $109.60, which means that in CY 2015, a beneficiary would be
responsible for 20 percent of this amount, or $21.92. Based on this
proposed rule, using the estimated CY 2016 CF, the CY 2016 national
payment amount in the nonfacility setting for CPT code 99203, as shown
in Table 46, is $110.13, which means that, in CY 2016, the proposed
beneficiary coinsurance for this service would be $22.03.

H. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 49 (Accounting
Statement), we have prepared an accounting statement. This estimate
includes growth in incurred benefits from CY 2015 to CY 2016 based on
the FY 2016 President's Budget baseline. Note that subsequent
legislation changed the updates for 2016 from those shown in the 2016
President's Budget baseline.

Table 49--Accounting Statement: Classification of Estimated Expenditures
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
CY 2016 Annualized Monetized Transfers. Estimated increase in
expenditures of $670 million
for PFS CF update.
From Whom To Whom?..................... Federal Government to
physicians, other
practitioners and providers
and suppliers who receive
payment under Medicare.

[[Page 41950]]

CY 2016 Annualized Monetized Transfers. Estimated increase in payment
of $473 million.
From Whom To Whom?..................... Federal Government to eligible
professionals who
satisfactorily participate in
the Physician Quality
Reporting System (PQRS).
------------------------------------------------------------------------

Table 50--Accounting Statement: Classification of Estimated Costs,
Transfer, and Savings
------------------------------------------------------------------------
Category Transfer
------------------------------------------------------------------------
CY 2016 Annualized Monetized Transfers $100 million.
of beneficiary cost coinsurance.
From Whom to Whom?..................... Federal Government to
Beneficiaries.
------------------------------------------------------------------------

I. Conclusion

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

List of Subjects

42 CFR Part 405

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

42 CFR Part 410

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

42 CFR Part 411

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

42 CFR Part 414

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

42 CFR Part 425

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

42 CFR Part 495

Administrative practice and procedure, Electronic health records,
Health facilities, Health professions, Health maintenance organizations
(HMO), Medicaid, Medicare, Penalties, Privacy, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth
below:

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

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

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

0
2. Section 405.400 is amended by revising the definition of ``Opt-out
period'' to read as follows:

Sec. 405.400 Definitions

* * * * *
Opt-out period means, with respect to an affidavit that meets the
requirements of Sec. 405.420, a 2-year period beginning on the date
the affidavit is signed, as specified by Sec. 405.410(c)(1) or Sec.
405.410(c)(2) as applicable, and each successive 2-year period unless
the physician or practitioner properly cancels opt-out in accordance
with Sec. 405.445.
* * * * *
0
3. Section 405.405 is amended by revising paragraph (b) to read as
follows:

Sec. 405.405 General rules.

* * * * *
(b) A physician or practitioner who enters into at least one
private contract with a Medicare beneficiary under the conditions of
this subpart, and who submits one or more affidavits in accordance with
this subpart, opts out of Medicare for the opt-out period described in
Sec. 405.400 unless the opt-out is terminated early according to Sec.
405.445.
* * * * *
0
4. Section 405.410 is amended by revising paragraphs (b), (c)(1),
(c)(2), and (d) to read as follows:

Sec. 405.410 Conditions for properly opting-out of Medicare.

* * * * *
(b) The physician or practitioner must submit an affidavit that
meets the specifications of Sec. 405.420 to each Medicare
Administrative contractor with which he or she would file claims absent
the opt-out.
(c) * * *
(1) The initial 2-year opt-out period begins the date the affidavit
meeting the requirements of Sec. 405.420 is signed, provided the
affidavit is filed within 10 days after he or she signs his or her
first private contract with a Medicare beneficiary.
(2) If the physician or practitioner does not timely file the opt-
out affidavit(s) as specified in the previous paragraph, the initial 2-
year opt-out period begins when the last such affidavit is filed. Any
private contract entered into before the last required affidavit is
filed becomes effective upon the filing of the last required affidavit,
and the furnishing of any items or services to a Medicare beneficiary
under such contract before the last required affidavit is filed is
subject to standard Medicare rules.
(d) A participating physician may properly opt-out of Medicare at
the beginning of any calendar quarter, provided that the affidavit
described in Sec. 405.420 is submitted to the participating
physician's Medicare Administrative contractors at least 30 days before
the beginning of the selected calendar quarter. A private contract
entered into before the beginning of the selected calendar quarter
becomes effective at the beginning of the selected calendar quarter,
and the furnishing of any items or services to a Medicare

[[Page 41951]]

beneficiary under such contract before the beginning of the selected
calendar quarter is subject to standard Medicare rules.
0
5. Section 405.415 is amended by revising paragraphs (h), (m), and (o)
to read as follows:

Sec. 405.415 Requirements of the private contract.

* * * * *
(h) State the expected or known effective date and the expected or
known expiration date of the current 2-year opt-out period.
* * * * *
(m) Be retained (original signatures of both parties required) by
the physician or practitioner for the duration of the current 2-year
opt-out period.
* * * * *
(o) Be entered into for each 2-year opt-out period.
0
6. Section 405.425 is amended by revising the introductory text to read
as follows:

Sec. 405.425 Effects of opting-out of Medicare.

If a physician or practitioner opts-out of Medicare in accordance
with this subpart, the following results obtain during the opt-out
period:
* * * * *
0
7. Section 405.435 is amended by revising paragraphs (a)(4), (b)(8),
and (d) to read as follows:

Sec. 405.435 Failure to maintain opt-out.

(a) * * *
(4) He or she fails to retain a copy of each private contract that
he or she has entered into for the duration of the current 2-year
period for which the contracts are applicable or fails to permit CMS to
inspect them upon request.
(b) * * *
(8) The physician or practitioner may not attempt to once more meet
the criteria for properly opting-out until the current 2-year period
expires.
* * * * *
(d) If a physician or practitioner demonstrates that he or she has
taken good faith efforts to maintain opt-out (including by refunding
amounts in excess of the charge limits to beneficiaries with whom he or
she did not sign a private contract) within 45 days of a notice from
the Medicare Administrative contractor of a violation of paragraph (a)
of this section, then the requirements of paragraphs (b)(1) through (8)
of this section are not applicable. In situations where a violation of
paragraph (a) of this section is not discovered by the Medicare
Administrative contractor during the current 2-year period when the
violation actually occurred, then the requirements of paragraphs (b)(1)
through (8) of this section are applicable from the date that the first
violation of paragraph (a) of this section occurred until the end of
the 2-year period during which the violation occurred (unless the
physician or practitioner takes good faith efforts, within 45 days of
any notice from the Medicare Administrative contractor that the
physician or practitioner failed to maintain opt-out, or within 45 days
of the physician's or practitioner's discovery of the failure to
maintain opt-out, whichever is earlier, to correct his or her
violations of paragraph (a) of this section. Good faith efforts
include, but are not limited to, refunding any amounts collected in
excess of the charge limits to beneficiaries with whom he or she did
not sign a private contract.
0
8. Section 405.445 is amended by revising the section heading and
paragraphs (a) and (b)(2) to read as follows:

Sec. 405.445 Properly cancel opt-out and early termination of opt-
out.

(a) A physician or practitioner may cancel opt-out by submitting a
written request (that indicates the physician or practitioner does not
want to extend the application of his or her affidavit for a subsequent
2-year period) with each Medicare contractor with which he or she would
file claims absent completion of opt-out, provided the written requests
are submitted not later than 30 days before the end of the previous 2-
year period.
(b) * * *
(2) Notify all Medicare contractors, with which he or she filed an
affidavit, of the termination of the opt-out no later than 90 days
after the effective date of the initial 2-year period.
* * * * *
0
9. Section 405.450 is amended by revising paragraph (a) to read as
follows:

Sec. 405.450 Appeals.

(a) A determination by CMS that a physician or practitioner has
failed to properly opt out, failed to maintain opt-out, failed to
timely renew opt-out, failed to privately contract, failed to properly
terminate opt-out, or failed to properly cancel opt-out is an initial
determination for purposes of Sec. 498.3(b) of this chapter.
* * * * *
0
10. Section 405.2410 is amended by revising paragraph (b)(1)
introductory text and (b)(1)(i) to read as follows:

Sec. 405.2410 Application of Part B deductible and coinsurance.

* * * * *
(b) * * *
(1) For RHCs that are authorized to bill on the basis of the
reasonable cost system--
(i) A coinsurance amount that does not exceed 20 percent of the
RHC's reasonable customary charge for the covered service; and
* * * * *
0
11. Section 405.2415 is amended by revising the section heading to read
as follows:

Sec. 405.2415 Incident to Services and direct supervision.

* * * * *
0
12. Section Sec. 405.2448 is amended by revising paragraph (a)(2) to
read as follows:

Sec. 405.2448 Preventive primary services.

(a) * * *
(2) Are furnished by a or under the direct supervision of a
physician, nurse practitioner, physician assistant, certified nurse
midwife, clinical psychologist or clinical social worker employed by or
under contract with the FQHC.
* * * * *
0
13. Section Sec. 405.2462 is amended by--
0
a. Revising paragraph (a) introductory text, the heading of paragraph
(b), and paragraphs (b)(1) and (c) introductory text.
0
b. Amending paragraph (b)(2) by removing the reference ``paragraphs
(e)(1) and (2)'' and adding in its place the reference ``paragraphs
(f)(1) and (2)''.
0
c. Redesignating paragraphs (d), (e), and (f) as paragraphs (e), (f),
and (g), respectively.
0
d. Adding paragraph (d).
0
e.. Revising newly redesignated paragraphs (e)(1)(i) and (ii).
0
f. Adding paragraph (g)(3).
The revisions and additions read as follows:

Sec. 405.2462 Payment for RHC and FQHC services.

(a) Payment to provider-based RHCs that are authorized to bill
under the reasonable cost system. A RHC that is authorized to bill
under the reasonable cost system is paid in accordance with parts 405
and 413 of this subchapter, as applicable, if the RHC is--
* * * * *
(b) Payment to independent RHCs that are authorized to bill under
the reasonable cost system. (1) RHCs that are authorized to bill under
the reasonable cost system are paid on the basis of an all-inclusive
rate for each

[[Page 41952]]

beneficiary visit for covered services. This rate is determined by the
MAC, in accordance with this subpart and general instructions issued by
CMS.
* * * * *
(c) Payment to FQHCs that are authorized to bill under the PPS. A
FQHC that is authorized to bill under the PPS is paid a single, per
diem rate based on the prospectively set rate for each beneficiary
visit for covered services. Except as noted in paragraph (d) of this
section, this rate is adjusted for the following:
* * * * *
(d) Payment to grandfathered tribal FQHCs. (1) A ``grandfathered
tribal FQHC'' is a FQHC that:
(i) Is operated by a tribe or tribal organization under the Indian
Self-Determination Education and Assistance Act (ISDEAA);
(ii) Was provider-based to an IHS hospital on or before April 7,
2000; and
(iii) Is not operating as a provider-based department of an IHS
hospital.
(2) A grandfathered tribal FQHC is paid at the Medicare outpatient
per visit rate as set annually by the IHS.
(3) The payment rate is not adjusted:
(i) By the FQHC Geographic Adjustment Factor;
(ii) For new patients, annual wellness visits, or initial
preventive physical examinations; or
(iii) Annually by the Medicare Economic Index or a FQHC PPS market
basket.
(4) The payment rate is adjusted annually by the IHS under the
authority of sections 321(a) and 322(b) of the Public Health Service
Act (42 U.S.C. 248 and 249(b)), Pub. L. 83-568 (42 U.S.C. 2001(a)), and
the Indian Health Care Improvement Act (25 U.S.C. 1601 et seq.).
(e) * * *
(1) * * *
(i) 80 percent of the lesser of the FQHC's actual charge or the PPS
encounter rate for FQHCs authorized to bill under the PPS; or
(ii) 80 percent of the lesser of a grandfathered tribal FQHC's
actual charge, or the outpatient rate for Medicare as set annually by
the IHS for tribal FQHCs that are authorized to bill at this rate.
* * * * *
(g) * * *
(3) FQHCs, RHCs, whether or not exempt from electronic reporting
under Sec. 424.32(d)(3) of this subchapter, are required to submit
HCPCS and other codes as required in reporting services furnished.
0
14. Section 405.2463 is amended by revising paragraph (c)(4)
introductory text to read as follows:

Sec. 405.2463 What constitutes a visit.

* * * * *
(c) * * *
(4) For FQHCs billing under the PPS, and grandfathered tribal FQHCs
that are authorized to bill as a FQHC at the outpatient per visit rate
for Medicare as set annually by the Indian Health Service--
* * * * *
0
15. Section 405.2464 is amended by--
0
a. Revising the heading of paragraph (a), paragraphs (a)(1), (a)(2),
and (a)(5), the heading of paragraph (b), and paragraph (b)(1).
0
b. Adding paragraphs (c) and (d).
The revisions and additions read as follows:

Sec. 405.2464 Payment rate.

(a) Payment rate for RHCs that are authorized to bill under the
reasonable cost system. (1) Except as specified in paragraph (c) of
this section, a RHC that is authorized to bill under the reasonable
cost system is paid an all-inclusive rate that is determined by the MAC
at the beginning of the cost reporting period.
(2) The rate is determined by dividing the estimated total
allowable costs by estimated total visits for RHC services.
* * * * *
(5) The RHC may request the MAC to review the rate to determine
whether adjustment is required.
(b) Payment rate for FQHCs billing under the prospective payment
system. (1) Except as specified in paragraph (c) of this section, a per
diem rate is calculated by CMS by dividing total FQHC costs by total
FQHC daily encounters to establish an average per diem cost.
* * * * *
(c) Payment for chronic care management services. Payment to RHCs
and FQHCs for qualified chronic care management services is at the
physician fee schedule national average payment rate.
(d) Determination of the payment rate for FQHCs that are authorized
to bill as grandfathered tribal FQHCs. These rates are paid at the
outpatient per visit rate for Medicare as set annually by the Indian
Health Service for each beneficiary visit for covered services. There
are no adjustments to this rate.

Sec. 405.2467 [Amended]

0
16. Section 405.2467 is amended by removing paragraph (b) and
redesignating paragraphs (c) and (d) as paragraphs (b) and (c),
respectively.
0
17. Section 405.2469 is amended by revising paragraphs (a) and (b)(2)
and adding paragraph (b)(3) to read as follows:

Sec. 405.2469 FQHC supplemental payments.

(a) Eligibility for supplemental payments. FQHCs under contract
(directly or indirectly) with MA organizations are eligible for
supplemental payments for FQHC services furnished to enrollees in MA
plans offered by the MA organization to cover the difference, if any,
between their payments from the MA plan and what they would receive
under one of the following:
(1) The PPS rate if the FQHC is authorized to bill under the PPS;
or
(2) The Medicare outpatient per visit rate as set annually by the
Indian Health Service for grandfathered tribal FQHCs.
(b) * * *
(2) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHC PPS rate as set forth in this subpart,
less any amount the FQHC may charge as described in section
1857(e)(3)(B) of the Act; or
(3) Payments received by the FQHC from the MA plan as determined on
a per visit basis and the FQHC outpatient rate as set forth in this
section under paragraph (a)(2) of this section, less any amount the
FQHC may charge as described in section 1857(e)(3)(B) of the Act.
* * * * *

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

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

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

0
19. Section 410.26 is amended by revising paragraphs (a)(1) and (b)(5)
to read as follows:

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

(a) * * *
(1) Auxiliary personnel means any individual who is acting under
the supervision of a physician (or other practitioner), regardless of
whether the individual is an employee, leased employee, or independent
contractor of the physician (or other practitioner) or of the same
entity that employs or contracts with the physician (or other
practitioner), has not been excluded from the Medicare program or had
his or her Medicare enrollment revoked, and meets any applicable
requirements to provide the services, including licensure, imposed by
the State in which the services are being furnished.
* * * * *

[[Page 41953]]

(b) * * *
(5) Services and supplies must be furnished under the direct
supervision of the billing physician (or other billing practitioner)
who is enrolled under Medicare Part B at the time the services are
furnished. Services and supplies furnished incident to transitional
care management and chronic care management services can be furnished
under the general supervision of the physician (or other practitioner)
when these services or supplies are provided by clinical staff.
* * * * *
0
20. Section 410.41 is amended by revising paragraph (b) to read as
follows:

Sec. 410.41 Requirements for ambulance suppliers.

* * * * *
(b) Vehicle staff. A vehicle furnishing ambulance services must be
staffed by at least two people who meet the requirements of state and
local laws where the services are being furnished, and at least one of
the staff members must, for:
(1) BLS vehicles. (i) Be certified at a minimum as an emergency
medical technician-basic by the State or local authority where the
services are furnished; and
(ii) Be legally authorized to operate all lifesaving and life-
sustaining equipment on board the vehicle;
(2) ALS vehicles. (i) Meet the requirements of paragraph (b)(1) of
this section; and
(ii) Be certified as a paramedic or an emergency medical
technician, by the State or local authority where the services are
being furnished, to perform one or more ALS services.
* * * * *
0
21. Section 410.78 is amended by adding paragraph (b)(2)(ix) to read as
follows:

Sec. 410.78 Telehealth services.

* * * * *
(b) * * *
(2) * * *
(ix) A certified registered nurse anesthetist as described in Sec.
410.69.
* * * * *
0
22. Section 410.160 is amended by revising paragraph (b)(8) to read as
follows:

Sec. 410.160 Part B annual deductible.

* * * * *
(b) * * *
(8) Beginning January 1, 2011, for a surgical service, and
beginning January 1, 2015, for an anesthesia service, furnished in
connection with, as a result of, and in the same clinical encounter as
a planned colorectal cancer screening test. A surgical or anesthesia
service furnished in connection with, as a result of, and in the same
clinical encounter as a colorectal cancer screening test means--a
surgical or anesthesia service furnished on the same date as a planned
colorectal cancer screening test as described in Sec. 410.37.
* * * * *

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

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

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

0
24. Section 411.351 is amended by--
0
a. Amending the definition of ``Entity'' by revising paragraph (3).
0
b. Revising the definitions of `` `Incident to' services or services
`incident to' '', ``List of CPT/HCPCS Codes'', and ``Locum tenens
physician''.
0
c. Amending the definition of ``Parenteral and enteral nutrients,
equipment, and supplies'' by revising paragraphs (1) and (2).
0
d. Revising the definition of ``Physician in the group practice''.
0
e. Amending the definition of ``Remuneration'' by revising paragraph
(2).
The revisions read as follows:

Sec. 411.351 Definitions.

* * * * *
Entity * * *
(3) For purposes of this subpart, ``entity'' does not include a
physician's practice when it bills Medicare for the technical component
or professional component of a diagnostic test for which the anti-
markup provision is applicable in accordance with Sec. 414.50 of this
chapter and Pub. 100-04, Medicare Claims Processing Manual, Chapter 1,
Section 30.2.9, as amended or replaced from time to time.
* * * * *
``Incident to'' services or services ``incident to'' means those
services and supplies that meet the requirements of section
1861(s)(2)(A) of the Act, Sec. 410.26 of this chapter, and Pub. 100-
02, Medicare Benefit Policy Manual, Chapter 15, Sections 60, 60.1,
60.2, 60.3, and 60.4 as amended or replaced from time to time.
* * * * *
List of CPT/HCPCS Codes means the list of CPT and HCPCS codes that
identifies those items and services that are DHS under section 1877 of
the Act or that may qualify for certain exceptions under section 1877
of the Act. It is updated annually, as published in the Federal
Register, and is posted on the CMS Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/11_List_of_Codes.asp#TopOfPage.
Locum tenens physician (or substitute physician) is a physician who
substitutes in exigent circumstances for another physician, in
accordance with section 1842(b)(6)(D) of the Act and Pub. 100-04,
Medicare Claims Processing Manual, Chapter 1, Section 30.2.11, as
amended or replaced from time to time.
* * * * *
Parenteral and enteral nutrients, equipment, and supplies * * *
(1) Parenteral nutrients, equipment, and supplies, meaning those
items and supplies needed to provide nutriment to a patient with
permanent, severe pathology of the alimentary tract that does not allow
absorption of sufficient nutrients to maintain strength commensurate
with the patient's general condition, as described in Pub. 100-03,
Medicare National Coverage Determinations Manual, Chapter 1, Section
180.2, as amended or replaced from time to time; and
(2) Enteral nutrients, equipment, and supplies, meaning items and
supplies needed to provide enteral nutrition to a patient with a
functioning gastrointestinal tract who, due to pathology to or
nonfunction of the structures that normally permit food to reach the
digestive tract, cannot maintain weight and strength commensurate with
his or her general condition, as described in Pub. 100-03, Medicare
National Coverage Determinations Manual, Chapter 1, Section 180.2, as
amended or replaced from time to time.
* * * * *
Physician in the group practice means a member of the group
practice, as well as an independent contractor physician during the
time the independent contractor is furnishing patient care services (as
defined in this section) for the group practice under a contractual
arrangement directly with the group practice to provide services to the
group practice's patients in the group practice's facilities. The
contract must contain the same restrictions on compensation that apply
to members of the group practice under Sec. 411.352(g) (or the
contract must satisfy the requirements of the personal service
arrangements exception in Sec. 411.357(d)), and the independent
contractor's arrangement with the group practice must comply with the
reassignment

[[Page 41954]]

rules in Sec. 424.80(b)(2) of this chapter (see also Pub. 100-04,
Medicare Claims Processing Manual, Chapter 1, Section 30.2.7, as
amended or replaced from time to time). Referrals from an independent
contractor who is a physician in the group practice are subject to the
prohibition on referrals in Sec. 411.353(a), and the group practice is
subject to the limitation on billing for those referrals in Sec.
411.353(b).
* * * * *
Remuneration * * *
(2) The furnishing of items, devices, or supplies (not including
surgical items, devices, or supplies) that are used solely for one or
more of the following purposes:
(i) Collecting specimens for the entity furnishing the items,
devices or supplies;
(ii) Transporting specimens for the entity furnishing the items,
devices or supplies;
(iii) Processing specimens for the entity furnishing the items,
devices or supplies;
(iv) Storing specimens for the entity furnishing the items, devices
or supplies;
(v) Ordering tests or procedures for the entity furnishing the
items, devices or supplies; or
(vi) Communicating the results of tests or procedures for the
entity furnishing the items, devices or supplies.
* * * * *
0
25. Section 411.353 is amended by revising paragraphs (g)(1)(i) and
(ii) to read as follows:

Sec. 411.353 Prohibition on certain referrals by physicians and
limitations on billing.

* * * * *
(g) * * *
(1) * * *
(i) The compensation arrangement between the entity and the
referring physician fully complies with an applicable exception in
Sec. 411.355, Sec. 411.356 or Sec. 411.357, except with respect to
the signature requirement in Sec. 411.357(a)(1), Sec. 411.357(b)(1),
Sec. 411.357(d)(1)(i), Sec. 411.357(e)(1)(i), Sec. 411.357(e)(4)(i),
Sec. 411.357(l)(1), Sec. 411.357(p)(2), Sec. 411.357(q)
(incorporating the requirement contained in Sec. 1001.952(f)(4)),
Sec. 411.357(r)(2)(ii), Sec. 411.357(t)(1)(ii) or (t)(2)(iii) (both
incorporating the requirements contained in Sec. 411.357(e)(1)(i)),
Sec. 411.357(v)(7)(i), Sec. 411.357(w)(7)(i), Sec. 411.357(x)(1)(i),
or Sec. 411.357(y)(1); and
(ii) The parties obtain the required signature(s) within 90
consecutive calendar days immediately following the date on which the
compensation arrangement became noncompliant (without regard to whether
any referrals occur or compensation is paid during such 90-day period)
and the compensation arrangement otherwise complies with all criteria
of the applicable exception.
* * * * *
0
26. Section 411.354 is amended by revising paragraphs (c)(3)(i),
(d)(1), (d)(4) introductory text, (d)(4)(i), (d)(4)(iv)(A), and
(d)(4)(v) to read as follows:

Sec. 411.354 Financial relationship, compensation, and ownership or
investment interest.

* * * * *
(c) * * *
(3)(i) For purposes of paragraphs (c)(1)(ii) and (c)(2)(iv) of this
section, a physician who ``stands in the shoes'' of his or her
physician organization is deemed to have the same compensation
arrangements (with the same parties and on the same terms) as the
physician organization. When applying the exceptions in Sec. 411.355
and Sec. 411.357 to arrangements in which a physician stands in the
shoes of his or her physician organization, the ``parties to the
arrangements'' are considered to be--
(A) With respect to a signature requirement, the physician
organization and any physician who ``stands in the shoes'' of the
physician organization as required under paragraphs (c)(1)(ii) or
(c)(2)(iv)(A) of this section; and
(B) With respect to all other requirements of the exception,
including the relevant referrals and other business generated between
the parties, the entity furnishing DHS and the physician organization
(including all members, employees, and independent contractor
physicians).
* * * * *
(d) * * *
(1) Compensation is considered ``set in advance'' if the aggregate
compensation, a time-based or per-unit of service-based (whether per-
use or per-service) amount, or a specific formula for calculating the
compensation is set out in writing before the furnishing of the items
or services for which the compensation is to be paid. The formula for
determining the compensation must be set forth in sufficient detail so
that it can be objectively verified, and the formula may not be changed
or modified during the course of the arrangement in any manner that
takes into account the volume or value of referrals or other business
generated by the referring physician.
* * * * *
(4) A physician's compensation from a bona fide employer or under a
managed care contract or other arrangement for personal services may be
conditioned on the physician's referrals to a particular provider,
practitioner, or supplier, provided that the compensation arrangement
meets all of the following conditions. The compensation arrangement:
(i) Is set in advance for the term of the arrangement.
* * * * *
(iv) * * *
(A) The requirement to make referrals to a particular provider,
practitioner, or supplier is set out in writing and signed by the
parties.
* * * * *
(v) The required referrals relate solely to the physician's
services covered by the scope of the employment, the arrangement for
personal services, or the contract, and the referral requirement is
reasonably necessary to effectuate the legitimate business purposes of
the compensation arrangement. In no event may the physician be required
to make referrals that relate to services that are not provided by the
physician under the scope of his or her employment, arrangement for
personal services, or contract.
0
27. Section 411.356 is amended by revising paragraphs (a) introductory
text and (a)(1)(i) and (ii), and adding paragraph (a)(1)(iii) to read
as follows:

Sec. 411.356 Exceptions to the referral prohibition related to
ownership or investment interests.

* * * * *
(a) Publicly traded securities. Ownership of investment securities
(including shares or bonds, debentures, notes, or other debt
instruments) that at the time the DHS referral was made could be
purchased on the open market and that meet the requirements of
paragraphs (a)(1) and (a)(2) of this section.
(1) * * *
(i) Listed for trading on the New York Stock Exchange, the American
Stock Exchange, or any regional exchange in which quotations are
published on a daily basis, or foreign securities listed on a
recognized foreign, national, or regional exchange in which quotations
are published on a daily basis;
(ii) Traded under an automated interdealer quotation system
operated by the National Association of Securities Dealers; or
(iii) Listed for trading on an electronic stock market or over-the-
counter quotation system in which quotations are published on a daily
basis and

[[Page 41955]]

trades are standardized and publicly transparent.
* * * * *
0
28. Section 411.357 is amended by--
0
A. Revising paragraphs (a) introductory text, (a)(1) through (4),
(a)(5) introductory text, (a)(6), (a)(7), (b)(1) through (3), (b)(4)
introductory text, (b)(5), (b)(6), (c)(3), (d)(1)(iii), (d)(1)(iv),
(d)(1)(vii), (e)(1)(iii), (e)(1)(iv), (e)(4)(i), (e)(4)(iv), (e)(6),
(f)(2), (k)(2), (l) introductory text, (l)(1), (l)(2), (m)(1), (m)(2),
(m)(3), (m)(5), (p)(1)(ii)(A), (p)(2), (r)(2)(iv), (r)(2)(v), (s)(1),
(t)(2)(iv)(A).
0
B. Adding paragraphs (x) and (y).
The revisions and additions read as follows:

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

* * * * *
(a) Rental of office space. Payments for the use of office space
made by a lessee to a lessor if the arrangement meets the following
requirements:
(1) The lease arrangement is set out in writing, is signed by the
parties, and specifies the premises it covers.
(2) The term of the lease arrangement is at least 1 year. To meet
this requirement, if the lease arrangement is terminated with or
without cause, the parties may not enter into a new lease arrangement
for the same space during the first year of the original lease
arrangement.
(3) The space rented or leased does not exceed that which is
reasonable and necessary for the legitimate business purposes of the
lease arrangement and is used exclusively by the lessee when being used
by the lessee (and is not shared with or used by the lessor or any
person or entity related to the lessor), except that the lessee may
make payments for the use of space consisting of common areas if the
payments do not exceed the lessee's pro rata share of expenses for the
space based upon the ratio of the space used exclusively by the lessee
to the total amount of space (other than common areas) occupied by all
persons using the common areas.
(4) The rental charges over the term of the lease arrangement are
set in advance and are consistent with fair market value.
(5) The rental charges over the term of the lease arrangement are
not determined--
* * * * *
(6) The lease arrangement would be commercially reasonable even if
no referrals were made between the lessee and the lessor.
(7) If the lease arrangement expires after a term of at least 1
year, a holdover lease arrangement immediately following the expiration
of the lease arrangement satisfies the requirements of paragraph (a) of
this section if the following conditions are met:
(i) The lease arrangement met the conditions of paragraphs (a)(1)
through (6) of this section when the arrangement expired;
(ii) The holdover lease arrangement is on the same terms and
conditions as the immediately preceding arrangement; and
(iii) The holdover lease arrangement continues to satisfy the
conditions of paragraphs (a)(1) through (6) of this section.
(b) * * *
(1) The lease arrangement is set out in writing, is signed by the
parties, and specifies the equipment it covers.
(2) The equipment leased does not exceed that which is reasonable
and necessary for the legitimate business purposes of the lease
arrangement and is used exclusively by the lessee when being used by
the lessee (and is not shared with or used by the lessor or any person
or entity related to the lessor).
(3) The term of the lease arrangement is at least 1 year. To meet
this requirement, if the lease arrangement is terminated with or
without cause, the parties may not enter into a new lease arrangement
for the same equipment during the first year of the original lease
arrangement.
(4) The rental charges over the term of the lease arrangement are
set in advance, are consistent with fair market value, and are not
determined--
* * * * *
(5) The lease arrangement would be commercially reasonable even if
no referrals were made between the parties.
(6) If the lease arrangement expires after a term of at least 1
year, a holdover lease arrangement immediately following the expiration
of the lease arrangement satisfies the requirements of paragraph (b) of
this section if the following conditions are met:
(i) The lease arrangement met the conditions of paragraphs (b)(1)
through (5) of this section when the arrangement expired;
(ii) The holdover lease arrangement is on the same terms and
conditions as the immediately preceding lease arrangement; and
(iii) The holdover lease arrangement continues to satisfy the
conditions of paragraphs (b)(1) through (5) of this section.
(c) * * *
(3) The remuneration is provided under an arrangement that would be
commercially reasonable even if no referrals were made to the employer.
* * * * *
(d) * * *
(1) * * *
(iii) The aggregate services covered by the arrangement do not
exceed those that are reasonable and necessary for the legitimate
business purposes of the arrangement(s).
(iv) The term of each arrangement is for at least 1 year. To meet
this requirement, if an arrangement is terminated with or without
cause, the parties may not enter into the same or substantially the
same arrangement during the first year of the original arrangement.
* * * * *
(vii) If the arrangement expires after a term of at least 1 year, a
holdover arrangement immediately following the expiration of the
arrangement satisfies the requirements of paragraph (d) of this section
if the following conditions are met:
(A) The arrangement met the conditions of paragraphs (d)(1)(i)
through (vi) of this section when the arrangement expired;
(B) The holdover arrangement is on the same terms and conditions as
the immediately preceding arrangement; and
(C) The holdover arrangement continues to satisfy the conditions of
paragraphs (d)(1)(i) through (vi) of this section.
* * * * *
(e) * * *
(1) * * *
(iii) The amount of remuneration under the arrangement is not
determined in a manner that takes into account (directly or indirectly)
the volume or value of any actual or anticipated referrals by the
physician or other business generated between the parties; and
(iv) The physician is allowed to establish staff privileges at any
other hospital(s) and to refer business to any other entities (except
as referrals may be restricted under an employment or services
arrangement that complies with Sec. 411.354(d)(4)).
* * * * *
(4) * * *
(i) The writing in paragraph (e)(1) of this section is also signed
by the physician practice.
* * * * *
(iv) Records of the actual costs and the passed-through amounts are
maintained for a period of at least 6 years and made available to the
Secretary upon request.
* * * * *
(6)(i) This paragraph (e) applies to remuneration provided by a
federally qualified health center or a rural health

[[Page 41956]]

clinic in the same manner as it applies to remuneration provided by a
hospital, provided that the arrangement does not violate the anti-
kickback statute (section 1128B(b) of the Act), or any Federal or State
law or regulation governing billing or claims submission.
(ii) The ``geographic area served'' by a federally qualified health
center or a rural health clinic is the area composed of the lowest
number of contiguous zip codes from which the federally qualified
health center or rural health clinic draws at least 90 percent of its
patients, as determined on an encounter basis. If the federally
qualified health center or rural health clinic draws fewer than 90
percent of its patients from all of the contiguous zip codes from which
it draws patients, the ``geographic area served'' by the federally
qualified health center or rural health clinic may include
noncontiguous zip codes, beginning with the noncontiguous zip code in
which the highest percentage of the federally qualified health center's
or rural health clinic's patients reside, and continuing to add
noncontiguous zip codes in decreasing order of percentage of patients.
The geographic area served by the federally qualified health center or
rural health clinic may include one or more zip codes from which the
federally qualified health center or rural health clinic draws no
patients, provided that such zip codes are entirely surrounded by zip
codes in the geographic area described above from which the federally
qualified health center or rural health clinic draws at least 90
percent of its patients.
(f) * * *
(2) The remuneration is provided under an arrangement that would be
commercially reasonable even if the physician made no referrals to the
entity.
* * * * *
(k) * * *
(2) The annual aggregate nonmonetary compensation limit in this
paragraph (k) is adjusted each calendar year to the nearest whole
dollar by the increase in the Consumer Price Index--Urban All Items
(CPI-U) for the 12-month period ending the preceding September 30. CMS
displays after September 30 each year both the increase in the CPI-U
for the 12-month period and the new nonmonetary compensation limit on
the physician self-referral Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/10_CPI-U_Updates.asp.
* * * * *
(l) Fair market value compensation. Compensation resulting from an
arrangement between an entity and a physician (or an immediate family
member) or any group of physicians (regardless of whether the group
meets the definition of a group practice set forth in Sec. 411.352)
for the provision of items or services (other than the rental of office
space) by the physician (or an immediate family member) or group of
physicians to the entity, or by the entity to the physician (or an
immediate family member) or a group of physicians, if the arrangement
meets the following conditions:
(1) The arrangement is in writing, signed by the parties, and
covers only identifiable items or services, all of which are specified
in writing.
(2) The writing specifies the timeframe for the arrangement, which
can be for any period of time and contain a termination clause,
provided that the parties enter into only one arrangement for the same
items or services during the course of a year. An arrangement may be
renewed any number of times if the terms of the arrangement and the
compensation for the same items or services do not change.
* * * * *
(m) * * *
(1) The compensation is offered to all members of the medical staff
practicing in the same specialty (but not necessarily accepted by every
member to whom it is offered) and is not offered in a manner that takes
into account the volume or value of referrals or other business
generated between the parties.
(2) Except with respect to identification of medical staff on a
hospital Web site or in hospital advertising, the compensation is
provided only during periods when the medical staff members are making
rounds or are engaged in other services or activities that benefit the
hospital or its patients.
(3) The compensation is provided by the hospital and used by the
medical staff members only on the hospital's campus. Compensation,
including, but not limited to, internet access, pagers, or two-way
radios, used away from the campus only to access hospital medical
records or information or to access patients or personnel who are on
the hospital campus, as well as the identification of the medical staff
on a hospital Web site or in hospital advertising, meets the ``on
campus'' requirement of this paragraph (m) of this section.
* * * * *
(5) The compensation is of low value (that is, less than $25) with
respect to each occurrence of the benefit (for example, each meal given
to a physician while he or she is serving patients who are hospitalized
must be of low value). The $25 limit in this paragraph (m)(5) is
adjusted each calendar year to the nearest whole dollar by the increase
in the Consumer Price Index--Urban All Items (CPI-I) for the 12 month
period ending the preceding September 30. CMS displays after September
30 each year both the increase in the CPI-I for the 12 month period and
the new limits on the physician self-referral Web site at http://www.cms.hhs.gov/PhysicianSelfReferral/10_CPI-U_Updates.asp.
* * * * *
(p) * * *
(1) * * *
(ii) * * *
(A) A percentage of the revenue raised, earned, billed, collected,
or otherwise attributable to the services performed or business
generated in the office space or to the services performed on or
business generated through the use of the equipment; or
* * * * *
(2) The compensation arrangement described in Sec.
411.354(c)(2)(ii) is set out in writing, signed by the parties, and
specifies the services covered by the arrangement, except in the case
of a bona fide employment relationship between an employer and an
employee, in which case the arrangement need not be set out in writing,
but must be for identifiable services and be commercially reasonable
even if no referrals are made to the employer.
* * * * *
(r) * * *
(2) * * *
(iv) The hospital, federally qualified health center, or rural
health clinic does not determine the amount of the payment in a manner
that takes into account (directly or indirectly) the volume or value of
any actual or anticipated referrals by the physician or any other
business generated between the parties.
(v) The physician is allowed to establish staff privileges at any
hospital(s), federally qualified health center(s), or rural health
clinic(s) and to refer business to any other entities (except as
referrals may be restricted under an employment arrangement or services
arrangement that complies with Sec. 411.354(d)(4)).
* * * * *
(s) * * *
(1) The professional courtesy is offered to all physicians on the
entity's bona fide medical staff or in such entity's local community or
service area, and the offer does not take into account

[[Page 41957]]

the volume or value of referrals or other business generated between
the parties;
* * * * *
(t) * * *
(2) * * *
(iv) * * *
(A) An amount equal to 25 percent of the physician's current annual
income (averaged over the previous 24 months), using a reasonable and
consistent methodology that is calculated uniformly; or
* * * * *
(x) Assistance to employ a nonphysician practitioner. (1)
Remuneration provided by a hospital to a physician to employ a
nonphysician practitioner to provide patient care services, if all of
the following conditions are met:
(i) The arrangement is set out in writing and signed by the
hospital, the physician, and the nonphysician practitioner.
(ii) The arrangement is not conditioned on--
(A) The physician's referrals to the hospital; or
(B) The nonphysician practitioner's referrals to the hospital.
(iii) The remuneration from the hospital--
(A) Does not exceed the lower of--
(1) 50 percent of the actual salary, signing bonus, and benefits
paid by the physician to the nonphysician practitioner during a period
not to exceed the first 2 consecutive years of employment; or
(2) An amount calculated by subtracting all receipts attributable
to services furnished by the nonphysician practitioner from the actual
salary, signing bonus, and benefits paid to the nonphysician
practitioner by the physician during a period not to exceed the first 2
consecutive years of employment; and
(B) Is not determined in a manner that takes into account (directly
or indirectly) the volume or value of any actual or anticipated
referrals by--
(1) The physician (or any physician in the physician's practice) or
other business generated between the parties; or
(2) The nonphysician practitioner (or any nonphysician practitioner
in the physician's practice) or other business generated between the
parties.
(iv) The salary, signing bonus, and benefits paid to the
nonphysician practitioner by the physician does not exceed fair market
value for the patient care services furnished by the nonphysician
practitioner to patients of the physician's practice.
(v) The nonphysician practitioner has not, within 3 years of
becoming employed by the physician (or the physician organization in
whose shoes the physician stands under Sec. 411.354(c) of this
subpart)--
(A) Practiced in the geographic area served by the hospital; or
(B) Been employed or otherwise engaged to provide patient care
services by a physician or a physician organization that has a medical
practice site located in the geographic area served by the hospital,
regardless of whether the nonphysician practitioner furnished services
at the medical practice site located in the geographic area served by
the hospital.
(vi) The nonphysician practitioner--
(A) Is a bona fide employee of the physician or the physician
organization in whose shoes the physician stands under Sec. 411.354(c)
of this subpart; and
(B) Furnishes only primary care services to patients of the
physician's practice.
(vii) The physician does not impose practice restrictions on the
nonphysician practitioner that unreasonably restrict the nonphysician
practitioner's ability to provide patient care services in the
geographic area served by the hospital.
(viii) The arrangement does not violate the anti-kickback statute
(section 1128B(b) of the Act), or any Federal or State law or
regulation governing billing or claims submission.
(2) Records of the actual amount of remuneration provided under
paragraph (x)(1) of this section by the hospital to the physician, and
by the physician to the nonphysician practitioner, must be maintained
for a period of at least 6 years and made available to the Secretary
upon request.
(3) For purposes of this paragraph (x), ``nonphysician
practitioner'' means a physician assistant as defined in section
1861(aa)(5) of the Act, a nurse practitioner or clinical nurse
specialist as defined in section 1861(aa)(5) of the Act, or a certified
nurse-midwife as defined in section 1861(gg) of the Act.
(4) For purposes of paragraphs (x)(1)(ii)(B) and (x)(1)(iii)(B)(2)
of this section, ``referral'' means a request by a nonphysician
practitioner that includes the provision of any designated health
service for which payment may be made under Medicare, the establishment
of any plan of care by a nonphysician practitioner that includes the
provision of such a designated health service, or the certifying or
recertifying of the need for such a designated health service, but not
including any designated health service personally performed or
provided by the nonphysician practitioner.
(5) For purposes of paragraph (x)(1) of this section, ``geographic
area served by the hospital'' has the meaning set forth in paragraph
(e)(2) of this section.
(6)(i) This paragraph (x) applies to remuneration provided by a
federally qualified health center or a rural health clinic in the same
manner as it applies to remuneration provided by a hospital.
(ii) The ``geographic area served'' by a federally qualified health
center or a rural health clinic has the meaning set forth in paragraph
(e)(6)(ii) of this section.
(y) Timeshare arrangements. Remuneration provided by a licensee to
a licensor under an arrangement for the use of the licensor's premises,
equipment, personnel, items, supplies or services if the following
conditions are met:
(1) The arrangement is set out in writing, signed by the parties,
and specifies the premises, equipment, personnel, items, supplies, and
services covered by the arrangement.
(2) The licensor is a hospital or physician organization.
(3) The licensed premises, equipment, personnel, items, supplies
and services are used predominantly for the provision of evaluation and
management services to patients.
(4) The licensed equipment is--
(i) Located in the office suite where the evaluation and management
services are furnished;
(ii) Not used to furnish designated health services other than
those incidental to the evaluation and management services furnished by
the physician at the time of the patient's evaluation and management
visit; and
(iii) Not advanced imaging equipment, radiation therapy equipment,
or clinical or pathology laboratory equipment (other than equipment
used to perform CLIA-waived laboratory tests).
(5) The arrangement is not conditioned on the licensee's referral
of patients to the licensor.
(6) The compensation over the term of the arrangement is set in
advance, consistent with fair market value, and not determined--
(i) In a manner that takes into account (directly or indirectly)
the volume or value of referrals or other business generated between
the parties; or
(ii) Using a formula based on--
(A) A percentage of the revenue raised, earned, billed, collected,
or otherwise attributable to the services provided by the licensee
while using the licensor's premises, equipment, personnel, items,
supplies or services; or
(B) Per-unit of service license fees that are not time-based, to
the extent that

[[Page 41958]]

such fees reflect services provided to patients referred by the
licensor to the licensee.
(7) The arrangement would be commercially reasonable even if no
referrals were made between the parties.
(8) The arrangement does not violate the anti-kickback statute
(section 1128B(b) of the Act) or any Federal or State law or regulation
governing billing or claims submission.
0
29. Section 411.361 is amended by revising paragraph (d) to read as
follows:

Sec. 411.361 Reporting requirements.

* * * * *
(d) Reportable financial relationships. For purposes of this
section, a reportable financial relationship is any ownership or
investment interest, as defined at Sec. 411.354(b) or any compensation
arrangement, as defined at Sec. 411.354(c), except for ownership or
investment interests that satisfy the exceptions set forth in Sec.
411.356(a) or Sec. 411.356(b) regarding publicly traded securities and
mutual funds.
* * * * *
0
30. Section 411.362 is amended by--
0
a. Amending paragraph (a) by adding the definitions of ``Ownership or
investment interest'' and ``Public advertising for the hospital'' in
alphabetical order.
0
b. Revising paragraphs (b)(3)(ii)(C), (c)(2)(iv), (c)(2)(v), and (c)(5)
introductory text.
The additions and revisions read as follows:

Sec. 411.362 Additional requirements concerning physician ownership
and investment in hospitals.

(a) * * *
Ownership or investment interest means for purposes of this section
a direct or indirect ownership or investment interest in a hospital.
(1) A direct ownership or investment interest in a hospital exists
if the ownership or investment interest in the hospital is held without
any intervening persons or entities between the hospital and the owner
or investor.
(2) An indirect ownership or investment interest in a hospital
exists if--
(i) Between the owner or investor and the hospital there exists an
unbroken chain of any number (but no fewer than one) of persons or
entities having ownership or investment interests; and
(ii) The hospital has actual knowledge of, or acts in reckless
disregard or deliberate ignorance of, the fact that the owner or
investor has some ownership or investment interest (through any number
of intermediary ownership or investment interests) in the hospital.
(3) An indirect ownership or investment interest in a hospital
exists even though the hospital does not know, or acts in reckless
disregard or deliberate ignorance of, the precise composition of the
unbroken chain or the specific terms of the ownership or investment
interests that form the links in the chain.
* * * * *
Public advertising for the hospital means any public communication
paid for by the hospital that is primarily intended to persuade
individuals to seek care at the hospital.
(b) * * *
(3) * * *
(ii) * * *
(C) Disclose on any public Web site for the hospital and in any
public advertising for the hospital that the hospital is owned or
invested in by physicians. Any language that would put a reasonable
person on notice that the hospital may be physician-owned would be
deemed a sufficient statement of physician ownership or investment. For
purposes of this section, a public Web site for the hospital does not
include, by way of example: Social media Web sites; electronic patient
payment portals; electronic patient care portals; and electronic health
information exchanges.
* * * * *
(c) * * *
(2) * * *
(iv) Average bed capacity. Is located in a State in which the
average bed capacity in the State is less than the national average bed
capacity during the most recent fiscal year for which HCRIS, as of the
date that the hospital submits its request, contains data from a
sufficient number of hospitals to determine a State's average bed
capacity and the national average bed capacity. CMS will provide on its
Web site State average bed capacities and the national average bed
capacity. For purposes of this paragraph, ``sufficient number'' means
the number of hospitals, as determined by CMS that would ensure that
the determination under this paragraph would not materially change
after additional hospital data are reported.
(v) Average bed occupancy. Has an average bed occupancy rate that
is greater than the average bed occupancy rate in the State in which
the hospital is located during the most recent fiscal year for which
HCRIS, as of the date that the hospital submits its request, contains
data from a sufficient number of hospitals to determine the requesting
hospital's average bed occupancy rate and the relevant State's average
bed occupancy rate. A hospital must use filed hospital cost report data
to determine its average bed occupancy rate. CMS will provide on its
Web site State average bed occupancy rates. For purposes of this
paragraph, ``sufficient number'' means the number of hospitals, as
determined by CMS that would ensure that the determination under this
paragraph would not materially change after additional hospital data
are reported.
* * * * *
(5) Community input and timing of complete request. Upon submitting
a request for an exception and until the hospital receives a CMS
decision, the hospital must disclose on any public Web site for the
hospital that it is requesting an exception and must also provide
actual notification that it is requesting an exception, in either
electronic or hard copy form, directly to hospitals whose data are part
of the comparisons in paragraphs (c)(2)(ii) and (c)(3)(ii) of this
section. Individuals and entities in the hospital's community may
provide input with respect to the hospital's request no later than 30
days after CMS publishes notice of the hospital's request in the
Federal Register. Such input must take the form of written comments.
The written comments must be either mailed or submitted electronically
to CMS. If CMS receives written comments from the community, the
hospital has 30 days after CMS notifies the hospital of the written
comments to submit a rebuttal statement.
* * * * *
0
31. Section 411.384 is amended by revising paragraph (b) to read as
follows:

Sec. 411.384 Disclosing advisory opinions and supporting information.

* * * * *
(b) Promptly after CMS issues an advisory opinion and releases it
to the requestor, CMS makes available a copy of the advisory opinion
for public inspection during its normal hours of operation and on the
CMS Web site.
* * * * *

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

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

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

0
33. Section 414.90 is amended by--
0
a. Adding paragraphs (j)(8) and (j)(9).
0
b. Revising paragraphs (k) introductory text, and (k)(2).

[[Page 41959]]

0
c. Redesignating paragraphs (l)(4) and (l)(5) as (k)(4) and (l)(4),
respectively.
0
d. Adding new paragraph (k)(5).

Sec. 414.90 Physician Quality Reporting System (PQRS).

* * * * *
(j) * * *
(8) Satisfactory reporting criteria for individual eligible
professionals for the 2018 PQRS payment adjustment. An individual
eligible professional who wishes to meet the criteria for satisfactory
reporting for the 2018 PQRS payment adjustment must report information
on PQRS quality measures identified by CMS in one of the following
manners:
(i) Via claims. (A) For the 12-month 2018 PQRS payment adjustment
reporting period--
(1)(i) Report at least 9 measures, covering at least 3 of the NQS
domains AND report each measure for at least 50 percent of the eligible
professional's Medicare Part B FFS patients seen during the reporting
period to which the measure applies. Of the measures reported, if the
eligible professional sees at least 1 Medicare patient in a face-to-
face encounter, the eligible professional will report on at least 1
measure contained in the proposed cross-cutting measure set. If less
than 9 measures apply to the eligible professional, the eligible
professional must report on each measure that is applicable, AND report
each measure for at least 50 percent of the Medicare Part B FFS
patients seen during the reporting period to which the measure applies.
Measures with a 0 percent performance rate would not be counted.
(ii) [Reserved]
(2) [Reserved]
(B) [Reserved]
(ii) Via qualified registry. (A) For the 12-month 2018 PQRS payment
adjustment reporting period--
(1)(i) Report at least 9 measures, covering at least 3 of the NQS
domains AND report each measure for at least 50 percent of the eligible
professional's Medicare Part B FFS patients seen during the reporting
period to which the measure applies. Of the measures reported, if the
eligible professional sees at least 1 Medicare patient in a face-to-
face encounter, the eligible professional will report on at least 1
measure contained in the proposed cross-cutting measure set. If less
than 9 measures apply to the eligible professional, the eligible
professional must report on each measure that is applicable to the
eligible professional, AND report each measure for at least 50 percent
of the Medicare Part B FFS patients seen during the reporting period to
which the measure applies.
(ii) Report at least 1 measures group and report each measures
group for at least 20 patients, a majority of which much be Medicare
Part B FFS patients.
(2) Measures with a 0 percent performance rate or measures groups
containing a measure with a 0 percent performance rate will not be
counted.
(B) [Reserved]
(iii) Via EHR direct product. For the 12-month 2018 PQRS payment
adjustment reporting period, report 9 measures covering at least 3 of
the NQS domains. If an eligible professional's direct EHR product or
EHR data submission vendor product does not contain patient data for at
least 9 measures covering at least 3 domains, then the eligible
professional must report all of the measures for which there is
Medicare patient data. An eligible professional must report on at least
1 measure for which there is Medicare patient data.
(iv) Via EHR data submission vendor. For the 12-month 2018 PQRS
payment adjustment reporting period, report 9 measures covering at
least 3 of the NQS domains. If an eligible professional's direct EHR
product or EHR data submission vendor product does not contain patient
data for at least 9 measures covering at least 3 domains, then the
eligible professional would be required to report all of the measures
for which there is Medicare patient data. An eligible professional
would be required to report on at least 1 measure for which there is
Medicare patient data.
(9) Satisfactory reporting criteria for group practices for the
2018 PQRS payment adjustment. A group practice who wishes to meet the
criteria for satisfactory reporting for the 2018 PQRS payment
adjustment must report information on PQRS quality measures identified
by CMS in one of the following manners:
(i) Via the GPRO web interface. For the 12-month 2018 PQRS payment
adjustment reporting period, for a group practice of 25 or more
eligible professionals, report on all measures included in the web
interface; AND populate data fields for the first 248 consecutively
ranked and assigned beneficiaries in the order in which they appear in
the group's sample for each module or preventive care measure. If the
pool of eligible assigned beneficiaries is less than 248, then the
group practice must report on 100 percent of assigned beneficiaries. In
some instances, the sampling methodology will not be able to assign at
least 248 patients on which a group practice may report, particularly
those group practices on the smaller end of the range of 25-99 eligible
professionals. If the group practice is assigned less than 248 Medicare
beneficiaries, then the group practice must report on 100 percent of
its assigned beneficiaries. A group practice must report on at least 1
measure for which there is Medicare patient data.
(ii) Via qualified registry. For a group practice of 2 or more
eligible professionals, for the 12-month 2018 PQRS payment adjustment
reporting period, report at least 9 measures, covering at least 3 of
the NQS domains. Of these measures, if a group practice sees at least 1
Medicare patient in a face-to-face encounter, the group practice would
report on at least 1 measure in the cross-cutting measure set. If less
than 9 measures covering at least 3 NQS domains apply to the group
practice, the group practice would report on each measure that is
applicable to the group practice, AND report each measure for at least
50 percent of the group's Medicare Part B FFS patients seen during the
reporting period to which the measure applies. Measures with a 0
percent performance rate would not be counted.
(iii) Via EHR direct product. For a group practice of 2 or more
eligible professionals, for the 12-month 2018 PQRS payment adjustment
reporting period, report 9 measures covering at least 3 domains. If the
group practice's direct EHR product or EHR data submission vendor
product does not contain patient data for at least 9 measures covering
at least 3 domains, then the group practice must report all of the
measures for which there is Medicare patient data. A group practice
must report on at least 1 measure for which there is Medicare patient
data.
(iv) Via EHR data submission vendor. For a group practice of 2 or
more eligible professionals, for the 12-month 2018 PQRS payment
adjustment reporting period, report 9 measures covering at least 3
domains. If the group practice's direct EHR product or EHR data
submission vendor product does not contain patient data for at least 9
measures covering at least 3 domains, then the group practice must
report all of the measures for which there is Medicare patient data. A
group practice must report on at least 1 measure for which there is
Medicare patient data.
(v) Via a certified survey vendor in addition to a qualified
registry. For a group practice of 25 or more eligible professionals
that elects to report via a certified survey vendor in addition to a
qualified registry for the 12-month 2018 PQRS payment adjustment
reporting period, the group practice must have all

[[Page 41960]]

CAHPS for PQRS survey measures reported on its behalf via a CMS-
certified survey vendor, and report at least 6 additional measures,
outside of CAHPS for PQRS, covering at least 2 of the NQS domains using
the qualified registry. If less than 6 measures apply to the group
practice, the group practice must report on each measure that is
applicable to the group practice. Of the additional measures that must
be reported in conjunction with reporting the CAHPS for PQRS survey
measures, if any eligible professional in the group practice sees at
least 1 Medicare patient in a face-to-face encounter, the group
practice must report on at least 1 measure in the cross-cutting measure
set.
(vi) Via a certified survey vendor in addition to a direct EHR
product or EHR data submission vendor. For a group practice of 25 or
more eligible professionals that elects to report via a certified
survey vendor in addition to a direct EHR product or EHR data
submission vendor for the 12-month 2018 PQRS payment adjustment
reporting period, the group practice must have all CAHPS for PQRS
survey measures reported on its behalf via a CMS-certified survey
vendor, and report at least 6 additional measures, outside of CAHPS for
PQRS, covering at least 2 of the NQS domains using the direct EHR
product or EHR data submission vendor product. If less than 6 measures
apply to the group practice, the group practice must report all of the
measures for which there is patient data. Of the additional 6 measures
that must be reported in conjunction with reporting the CAHPS for PQRS
survey measures, a group practice would be required to report on at
least 1 measure for which there is Medicare patient data.
(vii) Via a certified survey vendor in addition to the GPRO web
interface. (A) For a group practice of 25 or more eligible
professionals, for the 12-month 2018 PQRS payment adjustment reporting
period, the group practice must have all CAHPS for PQRS survey measures
reported on its behalf via a CMS-certified survey vendor. In addition,
the group practice must report on all measures included in the GPRO web
interface; AND populate data fields for the first 248 consecutively
ranked and assigned beneficiaries in the order in which they appear in
the group's sample for each module or preventive care measure. If the
pool of eligible assigned beneficiaries is less than 248, then the
group practice must report on 100 percent of assigned beneficiaries. A
group practice will be required to report on at least 1 measure for
which there is Medicare patient data.
(viii) If the CAHPS for PQRS survey is applicable to the practice,
group practices comprised of 25 or more eligible professionals who
elect to use the GPRO web interface must administer the CAHPS for PQRS
survey.
(k) Satisfactory participation requirements for the payment
adjustments for individual eligible professionals and group practices.
In order to satisfy the requirements for the PQRS payment adjustment
for a particular program year through participation in a qualified
clinical data registry, an individual eligible professional, as
identified by a unique TIN/NPI combination, or group practice must meet
the criteria for satisfactory participation as specified in paragraph
(k)(3) for such year, by reporting on quality measures identified by a
qualified clinical data registry during a reporting period specified in
paragraph (k)(1) of this section, using the reporting mechanism
specified in paragraph (k)(2) of this section.
* * * * *
(2) Reporting mechanism. An individual eligible professional or
group practice who wishes to meet the criteria for satisfactory
participation in a qualified clinical data registry must use the
qualified clinical data registry to report information on quality
measures identified by the qualified clinical data registry.
* * * * *
(5) Satisfactory participation criteria for individual eligible
professionals and group practices for the 2018 PQRS payment adjustment.
An individual eligible professional or group practice who wishes to
meet the criteria for satisfactory participation in a QCDR for the 2018
PQRS payment adjustment must report information on quality measures
identified by the QCDR in the following manner:
(i) For the 12-month 2018 PQRS payment adjustment reporting period,
report at least 9 measures available for reporting under a QCDR
covering at least 3 of the NQS domains, and report each measure for at
least 50 percent of the eligible professional's patients. Of these
measures, report on at least 3 outcome measures, or, if 3 outcomes
measures are not available, report on at least 2 outcome measures and
at least 1 of the following types of measures--resource use, patient
experience of care, or efficiency/appropriate use.
(ii) [Reserved]
* * * * *
0
34. Section 414.94 is added to Subpart B to read as follows:

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

(a) Basis and scope. This section implements the following
provisions of the Act:
(1) Section 1834(q)--Recognizing Appropriate Use Criteria for
Certain Imaging Services.
(2) Section 1834(q)(1)--Program Established.
(3) Section 1834(q)(2)--Establishment of Applicable Appropriate Use
Criteria.
(b) Definitions. As used in this section unless otherwise
indicated--
Advanced diagnostic imaging service means an imaging service as
defined in section 1834(e)(1)(B) of the Act.
Applicable imaging service means an advanced diagnostic imaging
service (as defined in section 1834(e)(1)(B) of the Act for which the
Secretary determines--
(i) One or more applicable appropriate use criteria apply;
(ii) There are one or more qualified clinical decision support
mechanisms listed; and
(iii) One or more of such mechanisms is available free of charge.
Applicable setting means a physician's office, a hospital
outpatient department (including an emergency department), an
ambulatory surgical center, and any other provider-led outpatient
setting determined appropriate by the Secretary.
Appropriate use criteria (AUC) means criteria only developed or
endorsed by national professional medical specialty societies or other
provider-led entities, to assist ordering professionals and furnishing
professionals in making the most appropriate treatment decision for a
specific clinical condition for an individual. To the extent feasible,
such criteria must be evidence-based. AUC are a collection of
individual appropriate use criteria. Individual criteria is information
presented in a manner that links: A specific clinical condition or
presentation; one or more services; and, an assessment of the
appropriateness of the service(s).
Furnishing professional means a physician (as defined in section
1861(r) of the Act) or a practitioner described in section
1842(b)(18)(C) of the Act who furnishes an applicable imaging service.
Ordering professional means a physician (as defined in section
1861(r) of the Act) or a practitioner described in section
1842(b)(18)(C) of the Act who orders an applicable imaging service.
Priority clinical areas means clinical topics, clinical topics and
imaging modalities, or imaging modalities identified by CMS through
annual rulemaking and in consultation with stakeholders which may be
used in the

[[Page 41961]]

determination of outlier ordering professionals.
Provider-led entity means a national professional medical specialty
society, or an organization that is comprised primarily of providers
and is actively engaged in the practice and delivery of healthcare.
Specified applicable appropriate use criteria means AUC developed,
modified or endorsed by a qualified provider-led entity.
(c) Qualified provider-led entities. Provider-led entities (PLEs)
must follow appropriate, evidence-based processes for the development
of AUC and demonstrate adherence to the requirements below to be
qualified by CMS. AUC developed, modified or endorsed by qualified PLEs
are specified applicable AUC. Qualified PLEs may develop AUC, modify
AUC developed by another entity, or provide endorsement to AUC
developed by other entities.
(1) Requirements for developing, modifying or endorsing AUC. All of
the following requirements must be met:
(i) An evidentiary review process that includes:
(A) A systematic literature review of the clinical topic and
relevant imaging studies; and
(B) An assessment of the evidence using a formal, published and
widely recognized methodology for grading evidence. Consideration of
relevant published consensus statements by professional medical
specialty societies must be part of the evidence assessment.
(ii) At least one multidisciplinary team with autonomous
governance, decision making and accountability for developing,
modifying or endorsing AUC. At a minimum the team must be comprised of
three members including one with expertise in the clinical topic
related to the criterion and one with expertise in the imaging modality
related to the criterion.
(iii) A publicly transparent process for identifying potential
conflicts of interest of members on the multidisciplinary team. The
following information is identified and made timely available in
response to a public request for a period of not less than 5 years,
coincident with the AUC publication of the related recommendation:
(A) Direct or indirect financial relationships that exist between
individuals or the spouse or minor child of individuals who have
substantively participated in the development of AUC and companies or
organizations that may financially benefit from the AUC. This may
include, for example, compensation arrangements such as salary, grant,
speaking or consulting fees, contract, or collaboration agreements
between individuals or the spouse or minor child of individuals who
have substantively participated in the development of AUC and companies
or organizations that may financially benefit from the AUC.
(B) Ownership or investment interests between individuals or the
spouse or minor child of individuals who have substantively
participated in the development of AUC and companies or organizations
that may financially benefit from the AUC.
(iv) Individual criteria must be published on the provider-led
entity's Web site and include an identifying title, authors, and key
references used to establish the evidence. If relevant to a CMS
identified priority clinical area, such a statement must be included.
(v) Key points in individual criteria must be identified as
evidence-based or consensus-based, and graded in terms of strength of
evidence using a formal, published and widely recognized methodology.
(vi) The provider-led entity must have a transparent process for
the timely and continual updating of each criterion.
(vii) The provider-led entity's process for developing, modifying
or endorsing AUC is publicly posted on the entity's Web site.
(2) Process to identify qualifying provider-led entities. Provider-
led entities must meet all of the following criteria:
(i) Provider-led entities must submit an application to CMS that
documents adherence to each of the AUC development requirements
outlined in paragraph (c)(1) of this section;
(ii) Applications will be accepted by CMS only from provider-led
entities that meet the definition in paragraph (b) of this section;
(iii) Applications must be received by CMS annually by January 1;
(iv) All approved provider-led entities from each year of
submissions will be posted to the CMS Web site by June 30; and
(v) Qualified provider-led entities are required to re-apply every
6 years. The application must be submitted by January 1 during the 5th
year of their approval.
(d) Identifying priority clinical areas. (1) CMS must identify
priority clinical areas through annual rulemaking and in consultation
with stakeholders.
(2) CMS will consider incidence and prevalence of disease, volume
variability of utilization, and strength of evidence for imaging
services. We will also consider applicability of the clinical area to a
variety of care settings and to the Medicare population.
(3) The Medicare Evidence Development & Coverage Advisory Committee
(MEDCAC) may make recommendations to CMS.
(4) Priority clinical areas will be used by CMS to identify outlier
ordering professionals (section 1834(q)(5) of the Act).
(e) Identification of non-evidence based AUC. (1) CMS will accept
public comment to facilitate identification of individual or groupings
of AUC that fall within a priority clinical area and are not evidence-
based. CMS may also independently identify AUC of concern.
(2) The evidentiary basis of the identified AUC may be reviewed by
the MEDCAC.
0
35. Section 414.605 is amended by revising the definition of ``Basic
life support (BLS)'' to read as follows:

Sec. 414.605 Definitions.

* * * * *
Basic life support (BLS) means transportation by ground ambulance
vehicle and medically necessary supplies and services, plus the
provision of BLS ambulance services. The ambulance must be staffed by
at least two people who meet the requirements of state and local laws
where the services are being furnished. Also, at least one of the staff
members must be certified, at a minimum, as an emergency medical
technician-basic (EMT-Basic) by the State or local authority where the
services are furnished and be legally authorized to operate all
lifesaving and life-sustaining equipment on board the vehicle. These
laws may vary from State to State.
* * * * *

Sec. 414.610 [Amended]

0
36. In Sec. 414.610, amend paragraphs (c)(1)(ii) introductory text and
(c)(5)(ii), by removing the date ``March 31, 2015'' and adding in its
place the date ``December 31, 2017''.
0
37. Section 414.904 is amended by revising paragraph (j) to read as
follows:

Sec. 414.904 Average sales price as the basis for payment.

* * * * *
(j) Biosimilar biological products. Effective January 1, 2016, the
payment amount for a biosimilar biological drug product (as defined in
Sec. 414.902) for all NDCs assigned to such product is the sum of the
average sales price of all NDCs assigned to the biosimilar biological
products included within the same billing and payment code as
determined under section 1847A(b)(6) of the Act and 6 percent of the
amount determined under section 1847A(b)(4)

[[Page 41962]]

of the Act for the reference drug product (as defined in Sec.
414.902).
0
38. Section 414.1205 is amended by adding the definition of ``Certified
registered nurse anesthetist (CRNA)'' and ``Physician assistant (PA),
nurse practitioner (NP), and clinical nurse specialist (CNS)'' in
alphabetical order to read as follows:

Sec. 414.1205 Definitions.

* * * * *
Certified registered nurse anesthetist (CRNA) has the same meaning
given this term under section 1861(bb)(2) of the Act.
* * * * *
Physician assistant (PA), nurse practitioner (NP), and clinical
nurse specialist (CNS) have the same meanings given these terms under
section 1861(aa)(5) of the Act.
* * * * *
0
39. Section 414.1210 is amended by--
0
a. Revising paragraph (a)(4), (b)(2)(i)(B), (b)(2)(i)(C), (b)(2)(i)(D),
(b)(3)(i), (b)(4) and (c).
0
b. Adding paragraphs (b)(2)(i)(E), (b)(2)(i)(F), (b)(3)(ii) and
(b)(3)(iii).
The revisions and additions read as follows:

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

(a) * * *
(4) For the CY 2018 payment adjustment period, to nonphysician
eligible professionals who are physician assistants, nurse
practitioners, clinical nurse specialists, and certified registered
nurse anesthetists in groups with 2 or more eligible professionals and
to physician assistants, nurse practitioners, clinical nurse
specialists, and certified registered nurse anesthetists who are solo
practitioners based on the performance period for the payment
adjustment period as described at Sec. 414.1215.
(b) * * *
(2) * * *
(i) * * *
(B) The quality composite score is calculated under Sec.
414.1260(a) using quality data reported by the ACO for the performance
period through the ACO GPRO Web interface as required under Sec.
425.504(a)(1) of this chapter or another mechanism specified by CMS and
the ACO all-cause readmission measure. Groups and solo practitioners
that participate in two or more ACOs during the applicable performance
period receive the quality composite score of the ACO that has the
highest numerical quality composite score. For the CY 2018 payment
adjustment period, the CAHPS for ACOs survey also will be included in
the quality composite score.
(C) For the CY 2017 payment adjustment period, the value-based
payment modifier adjustment will be equal to the amount determined
under Sec. 414.1275 for the payment adjustment period, except that if
the ACO does not successfully report quality data as described in
paragraph (b)(2)(i)(B) of this section for the performance period, such
adjustment will be equal to -4% for groups with 10 or more eligible
professionals and equal to -2% for groups with two to nine eligible
professionals and for solo practitioners. If the ACO has an assigned
beneficiary population during the performance period with an average
risk score in the top 25 percent of the risk scores of beneficiaries
nationwide, and a group or solo practitioner that participates in the
ACO during the performance period is classified as high quality/average
cost under quality-tiering for the CY 2017 payment adjustment period,
the group or solo practitioner receives an upward adjustment of +3x
(rather than +2x) if the group has 10 or more eligible professionals or
+2x (rather than +1x) if a solo practitioner or the group has two to
nine eligible professionals.
(D) For the CY 2018 payment adjustment period, the value-based
payment modifier adjustment will be equal to the amount determined
under Sec. 414.1275 for the payment adjustment period, except that if
the ACO does not successfully report quality data as described in
paragraph (b)(2)(i)(B) of this section for the performance period, such
adjustment will be equal to the downward payment adjustment amounts
described at Sec. 414.1270(d)(1). If the ACO has an assigned
beneficiary population during the performance period with an average
risk score in the top 25 percent of the risk scores of beneficiaries
nationwide, and a group or solo practitioner that participates in the
ACO during the performance period is classified as high quality/average
cost under quality-tiering for the CY 2018 payment adjustment period,
the group or solo practitioner receives an upward adjustment of +3x
(rather than +2x) if the group has 10 or more eligible professionals,
+2x (rather than +1x) if a solo practitioner or the group has two to
nine eligible professionals, or +2.0x (rather than +1.x) if a solo
practitioner or group consisting of nonphysician eligible
professionals.
(E) For the CY 2017 payment adjustment period and each subsequent
calendar year payment adjustment period, the value-based payment
modifier for groups and solo practitioners that participate in an ACO
under the Shared Savings Program during the applicable performance
period is determined as described under Sec. 414.1210(b)(2),
regardless of whether any eligible professionals in the group or the
solo practitioner also participate in an Innovation Center model during
the performance period.
(F) The same value-based payment modifier adjustment will be
applied in the payment adjustment period to all groups based on size as
specified under Sec. 414.1275 and solo practitioners that participated
in the ACO during the performance period.
* * * * *
(3) * * *
(i) For the CY 2017 payment adjustment period, the value-based
payment modifier is waived under section 1115A(d)(1) of the Act for
physicians in groups with 2 or more eligible professionals and for
physicians who are solo practitioners that participate in the Pioneer
ACO Model or the Comprehensive Primary Care (CPC) Initiative during the
performance period for the payment adjustment period as described at
Sec. 414.1215.
(ii) For the CY 2018 payment adjustment period, the value-based
payment modifier is waived under section 1115A(d)(1) of the Act for
physicians and nonphysician eligible professionals in groups with 2 or
more eligible professionals and for physicians and nonphysician
eligible professionals who are solo practitioners that participate in
the Pioneer ACO Model or the Comprehensive Primary Care (CPC)
Initiative during the performance period for the payment adjustment
period as described at Sec. 414.1215.
(iii) For purposes of the value-based payment modifier, a group or
solo practitioner is considered to be participating in the Pioneer ACO
Model or CPC Initiative if at least one eligible professional billing
under the TIN in the performance period for the payment adjustment
period as described at Sec. 414.1215 is participating in the Pioneer
ACO Model or CPC Initiative in the performance period.
(4) Application of the value-based payment modifier to participants
in other similar Innovation Center models. (i) For the CY 2017 payment
adjustment period, the value-based payment modifier is waived under
section 1115A(d)(1) of the Act for physicians in groups with 2 or more
eligible professionals and for physicians who are solo practitioners
that participate in other similar Innovation Center models during the
performance period for the payment adjustment period as described at
Sec. 414.1215.
(ii) For the CY 2018 payment adjustment period, the value-based

[[Page 41963]]

payment modifier is waived under section 1115A(d)(1) of the Act for
physicians and nonphysician eligible professionals in groups with 2 or
more eligible professionals and for physicians and nonphysician
eligible professionals who are solo practitioners that participate in
other similar Innovation Center models during the performance period
for the payment adjustment period as described at Sec. 414.1215.
(iii) For purposes of the value-based payment modifier, a group or
solo practitioner is considered to be participating in a similar
Innovation Center model if at least one eligible professional billing
under the TIN in the performance period for the payment adjustment
period as described at Sec. 414.1215 is participating in the similar
model in the performance period.
(c) Group size and composition determination. (1) The list of
groups of physicians subject to the value-based payment modifier for
the CY 2015 payment adjustment period is based on a query of PECOS on
October 15, 2013. For each subsequent calendar year payment adjustment
period, the list of groups and solo practitioners subject to the value-
based payment modifier is based on a query of PECOS that occurs within
10 days of the close of the Physician Quality Reporting System group
registration process during the applicable performance period described
at Sec. 414.1215. Groups are removed from the PECOS-generated list if,
based on a claims analysis, the group did not have the required number
of eligible professionals, as defined in Sec. 414.1210(a), that
submitted claims during the performance period for the applicable
calendar year payment adjustment period. Solo practitioners are removed
from the PECOS-generated list if, based on a claims analysis, the solo
practitioner did not submit claims during the performance period for
the applicable calendar year payment adjustment period.
(2) Beginning with the CY 2016 payment adjustment period, the size
of a group during the applicable performance period will be determined
by the lower number of eligible professionals as indicated by the
PECOS-generated list or claims analysis.
(3) For the CY 2018 payment adjustment period, the composition of a
group during the applicable performance period will be determined based
on whether the group includes physicians, physician assistants, nurse
practitioners, clinical nurse specialists, certified registered nurse
anesthetists, and/or other types of nonphysician eligible professionals
as indicated by the PECOS-generated list or claims analysis.
0
40. Section 414.1215 is amended by adding paragraph (d) to read as
follows:

Sec. 414.1215 Performance and payment adjustment periods for the
value-based payment modifier.

* * * * *
(d) The performance period is calendar year 2016 for value-based
payment modifier adjustments made in the calendar year 2018 payment
adjustment period.
0
41. Section 414.1235 is amended by adding paragraphs (c)(4) and (c)(5)
to read as follows:

Sec. 414.1235 Cost measures.

* * * * *
(c) * * *
(4) Beginning with the CY 2016 payment adjustment period, the cost
measures of a group and solo practitioner subject to the value-based
payment modifier are adjusted to account for the group's and solo
practitioner's specialty mix, by computing the weighted average of the
national specialty specific expected costs and comparing this to the
group's actual risk adjusted costs. Each national specialty-specific
expected cost is weighted by the proportion of Part B payments incurred
by each specialty within the group.
(5) The national specialty-specific expected costs referenced in
paragraph (c)(4) of this section are derived by calculating, for each
specialty, the weighted average of the risk-adjusted costs computed
across all groups, where the weight for each group is equal to the
number of beneficiaries attributed to the group, times the number of
eligible professionals in the group with the relevant specialty, times
the proportion of eligible professionals in the group with the relevant
specialty.
0
42. Section 414.1250 is amended by revising paragraph (a) to read as
follows:

Sec. 414.1250 Benchmarks for quality of care measures.

(a) The benchmark for quality of care measures reported through the
PQRS using the claims, registries, or web interface is the national
mean for that measure's performance rate (regardless of the reporting
mechanism) during the year prior to the performance period. In
calculating the national benchmark, solo practitioners' and groups' (or
individual eligible professionals' within such groups) performance
rates are weighted by the number of beneficiaries used to calculate the
solo practitioners' or groups' (or individual eligible professionals'
within such groups) performance rate. Beginning with the CY 2016
performance period, eCQMs reported via EHRs are excluded from the
overall benchmark for quality of care measures and separate benchmarks
are used for eCQMs. The eCQM benchmark is the national mean for the
measure's performance rate during the year prior to the performance
period. In calculating the national benchmark, solo practitioners' and
groups' (or individual eligible professionals' within such groups)
performance rates are weighted by the number of beneficiaries used to
calculate the solo practitioners' or groups' (or individual eligible
professionals' within such groups) performance rate.
* * * * *
0
43. Section 414.1255 is amended by revising paragraph (b) and removing
paragraph (c) to read as follows:

Sec. 414.1255 Benchmarks for cost measures.

* * * * *
(b) Beginning with the CY 2016 payment adjustment period, the
benchmark for each cost measure is the national mean of the performance
rates calculated among all groups and solo practitioners that meet the
minimum number of cases for that measure under Sec. 414.1265(a). In
calculating the national benchmark, groups and solo practitioners'
performance rates are weighted by the number of beneficiaries used to
calculate the group or solo practitioner's performance rate.
0
44. Section 414.1265 is amended by adding paragraph (a)(2), and
revising paragraph (b) to read as follows:

Sec. 414.1265 Reliability of measures.

* * * * *
(a) * * *
(2) Starting with the CY 2017 payment adjustment period, the
Medicare Spending Per Beneficiary measure described at Sec.
414.1235(a)(6) is an exception to this paragraph (a). In a performance
period, if a group or a solo practitioner has fewer than 100 cases for
this MSPB measure, that measure is excluded from its domain and the
remaining measures in the domain are given equal weight.
(b)(1) For the CY 2015 payment adjustment period, if a reliable
quality of care composite or cost composite cannot be calculated,
payments will not be adjusted under the value-based payment modifier.
(2) Beginning with the CY 2016 payment adjustment period, a group
and a solo practitioner subject to the value-based payment modifier
will receive a quality composite score that is classified as
``average'' under Sec. 414.1275(b)(1) if such group and solo
practitioner do not have at least one quality measure that

[[Page 41964]]

meets the minimum number of cases under paragraph (a) of this section.
(3) Beginning with the CY 2016 payment adjustment period, a group
and a solo practitioner subject to the value-based payment modifier
will receive a cost composite score that is classified as ``average''
under Sec. 414.1275(b)(2) if such group and solo practitioner do not
have at least one cost measure that meets the minimum number of cases
under paragraph (a) of this section.
0
45. Section 414.1270 is amended by removing paragraphs (b)(5) and
(c)(5), and adding paragraph (d) to read as follows:

Sec. 414.1270 Determination and calculation of Value-Based Payment
Modifier adjustments.

* * * * *
(d) For the CY 2018 payment adjustment period:
(1) A downward payment adjustment of -2.0 percent will be applied
to a group with two to nine eligible professionals and a solo
practitioner, a downward payment adjustment of -4.0 percent will be
applied to a group with 10 or more eligible professionals, and a
downward payment adjustment of -2.0 percent will be applied to a group
or solo practitioner consisting of nonphysician eligible professionals
subject to the value-based payment modifier if, during the applicable
performance period as defined in Sec. 414.1215, the following apply:
(i) Such group does not meet the criteria as a group to avoid the
PQRS payment adjustment for CY 2018 as specified by CMS; and
(ii) Fifty percent of the eligible professionals in such group do
not meet the criteria as individuals to avoid the PQRS payment
adjustment for CY 2018 as specified by CMS; or
(iii) Such solo practitioner does not meet the criteria as an
individual to avoid the PQRS payment adjustment for CY 2018 as
specified by CMS.
(2) For a group composed of 10 or more eligible professionals that
is not included in paragraph (d)(1) of this section, the value-based
payment modifier adjustment will be equal to the amount determined
under Sec. 414.1275(c)(4)(i).
(3) For a group composed of between two to nine eligible
professionals and a solo practitioner that are not included in
paragraph (d)(1) of this section, the value-based payment modifier
adjustment will be equal to the amount determined under Sec.
414.1275(c)(4)(ii).
(4) For a group and a solo practitioner consisting of nonphysician
eligible professionals that are not included in paragraph (d)(1) of
this section, the value-based payment modifier adjustment will be equal
to the amount determined under Sec. 414.1275(c)(4)(iii).
(5) If at least 50 percent of the eligible professionals in the
group meet the criteria as individuals to avoid the PQRS payment
adjustment for CY 2018 as specified by CMS, and all of those eligible
professionals use a qualified clinical data registry and CMS is unable
to receive quality performance data for them, the quality composite
score for such group will be classified as ``average'' under Sec.
414.1275(b)(1).
0
46. Section 414.1275 is amended by adding paragraphs (c)(4) and (d)(3)
to read as follows:

Sec. 414.1275 Value-based payment modifier quality-tiering scoring
methodology.

(c) * * *
(4) The following value-based payment modifier percentages apply to
the CY 2018 payment adjustment period:
(i) For physicians, physician assistants, nurse practitioners,
clinical nurse specialists, and certified registered nurse anesthetists
in groups with 10 or more eligible professionals:

CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physicians, Physician
Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in
Groups With 10 or More Eligible Professionals
----------------------------------------------------------------------------------------------------------------
Average
Cost/quality Low quality quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................ +0.0% +2.0x * +4.0x *
Average Cost.................................................... -2.0% +0.0% +2.0x *
High Cost....................................................... -4.0% -2.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups eligible for an additional +1.0x if reporting Physician Quality Reporting System quality measures and
average beneficiary risk score is in the top 25 percent of all beneficiary risk scores, where `x' represents
the upward payment adjustment factor.

(ii) For physicians, physician assistants, nurse practitioners,
clinical nurse specialists, and certified registered nurse anesthetists
in groups with two to nine eligible professionals and physician solo
practitioners:

CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physicians, Physician
Assistants, Nurse Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in
Groups With Two to Nine Eligible Professionals and Physician Solo Practitioners
----------------------------------------------------------------------------------------------------------------
Average
Cost/quality Low quality quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................ +0.0% +1.0x * +2.0x *
Average Cost.................................................... -1.0% +0.0% +1.0x *
High Cost....................................................... -2.0% -1.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting Physician Quality Reporting System
quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores,
where `x' represents the upward payment adjustment factor.

(iii) For physician assistants, nurse practitioners, clinical nurse
specialists, and certified registered nurse anesthetists in groups that
consist of nonphysician eligible professionals, and solo practitioners
who are physician assistants, nurse practitioners, clinical nurse
specialists, and certified registered nurse anesthetists:

[[Page 41965]]

CY 2018 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach for Physician Assistants, Nurse
Practitioners, Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists in Groups Consisting of
Nonphysician Eligible Professionals, and Solo Practitioners Who Are Physician Assistants, Nurse Practitioners,
Clinical Nurse Specialists, and Certified Registered Nurse Anesthetists
----------------------------------------------------------------------------------------------------------------
Average
Cost/quality Low quality quality High quality
----------------------------------------------------------------------------------------------------------------
Low Cost........................................................ +0.0% +1.0x * +2.0x *
Average Cost.................................................... +0.0% +0.0% +1.0x *
High Cost....................................................... +0.0% +0.0% +0.0%
----------------------------------------------------------------------------------------------------------------
* Groups and solo practitioners eligible for an additional +1.0x if reporting Physician Quality Reporting System
quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores,
where `x' represents the upward payment adjustment factor.

(d) * * *
(3) Groups and solo practitioners subject to the value-based
payment modifier that have an attributed beneficiary population with an
average risk score in the top 25 percent of the risk scores of
beneficiaries nationwide and for the CY 2018 payment adjustment period
are subject to the quality-tiering approach, receive a greater upward
payment adjustment as follows:
(i) Classified as high quality/low cost receive an upward
adjustment of +5x (rather than +4x) if the group has 10 or more
eligible professionals, +3x (rather than +2x) if a solo practitioner or
the group has two to nine eligible professionals, or +3x (rather than
+2x) if a solo practitioner or group consisting of nonphysician
eligible professionals; and
(ii) Classified as either high quality/average cost or average
quality/low cost receive an upward adjustment of +3x (rather than +2x)
if the group has 10 or more eligible professionals, +2x (rather than
+1x) if a solo practitioner or the group has two to nine eligible
professionals, or +2x (rather than +1x) if a solo practitioner or group
consisting of nonphysician eligible professionals.

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
47. The authority citation for part 425 continues to read as follows:

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

0
48. Section 425.20, as amended on June 9, 2015 (80 FR 32833) and
effective on August 10, 2015, is further amended in the definition of
``Primary care services'' by--
0
a. Revising paragraph (2) introductory text.
0
b. Adding paragraph (2)(v).
0
c. Adding paragraph (4).
The revision and additions read as follows:

Sec. 425.20 Definitions.

* * * * *
Primary care services * * *
(2) For performance year 2016 as follows:
* * * * *
(v) G0463 for services furnished in ETA hospitals.
* * * * *
(4) For performance years 2017 and subsequent years as follows:
(i) 99201 through 99215.
(ii) 99304-99318 (excluding claims including the POS 31 modifier)
and 99319-99340
(iii) 99341 through 99350.
(iv) 99495, 99496 and 99490.
(v) G0402 (the code for the Welcome to Medicare visit).
(vi) G0438 and G0439 (codes for the annual wellness visits).
(vii) Revenue center codes 0521, 0522, 0524, 0525 submitted by
FQHCs (for services furnished prior to January 1, 2011), or by RHCs.
(viii) G0463 for services furnished in ETA hospitals.
0
49. Section 425.102 is amended by--
0
a. Adding paragraph (a)(8).
0
b. In paragraph (b), removing the phrase ``eligible participate'' and
adding in its place the phrase ``eligible to participate''.
The addition reads as follows:

Sec. 425.102 Eligible providers and suppliers.

(a) * * *
(8) Teaching hospitals that have elected under Sec. 415.160 of
this chapter to receive payment on a reasonable cost basis for the
direct medical and surgical services of their physicians.
* * * * *
0
50. Section 425.402, as amended on June 9, 2015 (80 FR 32841) and
effective on August 10, 2015, is further amended by adding paragraph
(d) to read as follows:

Sec. 425.402 Basic assignment methodology.

* * * * *
(d) When considering services furnished by ACO professionals in
teaching hospitals that have elected under Sec. 415.160 of this
subchapter to receive payment on a reasonable cost basis for the direct
medical and surgical services of their physicians in the assignment
methodology under paragraph (b) of this section, CMS uses an estimated
amount based on the amounts payable under the physician fee schedule
for similar services in the geographic location of the teaching
hospital as a proxy for the amount of the allowed charges for the
service.
0
51. Section 425.502 is amended by adding paragraph (a)(5) to read as
follows:

Sec. 425.502 Calculating the ACO quality performance score.

(a) * * *
(5) CMS reserves the right to redesignate a measure as pay for
reporting when the measure owner determines the measure no longer
aligns with clinical practice or causes patient harm.
* * * * *

Sec. 425.504 [Amended]

0
52. In Sec. 425.504--
0
a. Amend paragraph (a)(1) by removing the phrase ``their ACO provider/
suppliers who are eligible professionals'' and adding in its place the
phrase ``eligible professionals who bill under the TIN of an ACO
participant''.
0
b. Amend paragraphs (b)(1) and (c)(1) by removing the phrase ``their
ACO providers/suppliers who are eligible professionals'' and adding in
its place the phrase ``eligible professionals who bill under the TIN of
an ACO participant''.
0
c. Amend paragraphs (a)(2)(ii), (b)(2)(ii), (b)(3) and (c)(3), by
removing the phrase ``its ACO providers/suppliers who are eligible
professionals'' and adding in its place the phrase ``eligible
professionals who bill under the TIN of an ACO participant''.
0
d. Amend paragraphs (a)(2)(i), (b)(2)(i), and (c)(2) by removing the
phrase ``ACO providers/suppliers that are eligible professionals'' and
adding in

[[Page 41966]]

its place the phrase ``eligible professionals who bill under the TIN of
an ACO participant''.
0
e. Amend paragraphs (a)(3), (a)(4), and (b)(4), by removing the phrase
``ACO providers/suppliers who are eligible professionals'' and adding
in its place the phrase ``eligible professionals who bill under the TIN
of an ACO participant''.
0
f. Amend paragraph (b)(3) by removing the phrase ``each ACO supplier/
provider who is an eligible professional'' and adding in its place the
phrase ``each eligible professional who bills under the TIN of an ACO
participant''.
0
g. Amend paragraph (c)(3) by removing the phrase ``each ACO provider/
supplier who is an eligible professional'' and adding in its place the
phrase ``each eligible professional who bills under the TIN of an ACO
participant''.

PART 495--STANDARDS FOR THE ELECTRONIC HEALTH RECORD TECHNOLOGY
INCENTIVE PROGRAM

0
53. The authority citation for part 495 continues to read as follows:

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

0
54. In Sec. 495.4 the definition of ``Certified electronic health
record technology (CEHRT)'', as proposed to be revised on March 30,
2015 (80 FR 16795), is proposed to be further amended by revising
paragraphs (1)(ii)(C)(2) and (2)(iii)(B) to read as follows:

Sec. 495.4 Definitions.

* * * * *
Certified electronic health record technology (CEHRT) * * *
(1) * * *
(ii) * * *
(C) * * *
(2) Clinical quality measure certification criteria that support
the calculation and reporting of clinical quality measures at 45 CFR
170.314(c)(2) and (c)(3); or 45 CFR 170.315(c)(2), (c)(3)(i) and
(c)(3)(ii); and can be electronically accepted by CMS if the provider
is submitting electronically.
* * * * *
(2) * * *
(iii) * * *
(B) Clinical quality measure certification criteria that support
the calculation and reporting of clinical quality measures under the
2015 Edition certification criteria 45 CFR 170.315(c)(2), (c)(3)(i) and
(c)(3)(ii), and can be electronically accepted by CMS.
* * * * *

Dated: June 24, 2015.
Andrew M. Slavitt,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: June 30, 2015.
Sylvia M. Burwell,
Secretary, Department of Health and Human Services.
[FR Doc. 2015-16875 Filed 7-8-15; 4:15 pm]
BILLING CODE 4120-01-P

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Proposed rule.
Contact		Donta Henson, (410) 786-1947 for any physician payment issues not identified below.
FR Citation		80 FR 41685
RIN Number		0938-AS40
CFR Citation		42 CFR 405 42 CFR 410 42 CFR 411 42 CFR 414 42 CFR 425 42 CFR 495
CFR Associated		Administrative Practice and Procedure; Health Facilities; Health Professions; Kidney Diseases; Medical Devices; Medicare; Reporting and Recordkeeping Requirements; Rural Areas; X-Rays; Laboratories; Physician Referral; Electronic Health Records; Health Maintenance Organizations (hmo); Medicaid; Penalties and Privacy

80 FR 41685 - Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016

DEPARTMENT OF HEALTH AND HUMAN SERVICESCenters for Medicare & Medicaid Services

Federal Register Volume 80, Issue 135 (July 15, 2015)

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