[Federal Register Volume 59, Number 121 (Friday, June 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15234]


[[Page Unknown]]

[Federal Register: June 24, 1994]


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Part II





Department of Health and Human Services





_______________________________________________________________________



Health Care Financing Administration



_______________________________________________________________________



42 CFR Parts 410 and 414




Medicare Program; Refinements to Geographic Adjustment Factor Values 
and Other Policies Under the Physician Fee Schedule; Proposed Rule
DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 410 and 414

[BPD-789-P]
RIN 0938-AG52

 
Medicare Program; Refinements to Geographic Adjustment Factor 
Values and Other Policies Under the Physician Fee Schedule

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This proposed rule discusses changes to the geographic 
adjustment factor values and fee schedule payment areas, proposed 
relative value units for certain physician services, revisions to 
payment policies for specific physician services, and a change to the 
Medicare Volume Performance Standard. This proposed rule also discusses 
implementation of the Omnibus Budget Reconciliation Act of 1993 (Public 
Law 103-66) provision regarding payment for antigens. This provision 
places antigens under the physician fee schedule and subjects them to 
charge limits. This proposed rule solicits public comments on the 
proposed changes.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on August 
23, 1994.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-789-P, P.O. Box 7519, 
Baltimore, MD 21207-0519.
    If you prefer, you may deliver your written comments to one of the 
following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue 
SW., Washington, DC 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, 
Baltimore, MD 21207.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-789-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or Master Card 
number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 783-3238 or by faxing to (202) 512-
2250. The cost for each copy is $6. As an alternative, you can view and 
photocopy the Federal Register document at most libraries designated as 
Federal Depository Libraries and at many other public and academic 
libraries throughout the country that receive the Federal Register.

FOR FURTHER INFORMATION CONTACT: For further information concerning the 
proposed refinements to the geographic adjustment factor values and 
changes to the geographic practice cost indices and payment areas, 
contact Bob Ulikowski of the Health Care Financing Administration, 
(410) 966-5721. For issues related to the proposed relative value units 
for certain physician services and payment policies for specific 
physician services and supplies, contact Elizabeth Holland of the 
Health Care Financing Administration, (410) 966-1309.

SUPPLEMENTARY INFORMATION: To assist readers in referencing sections 
contained in this proposed rule, we are providing the following table 
of contents:

Table of Contents

I. Background
    A. Legislative History
    B. Recent Federal Register Publications
II. Specific Proposals for CY 1995
    A. GPCI Changes
    1. Development of the GPCIs
    2. Proposed Revised GPCIs
    a. Work GPCIs
    b. Practice Expense GPCIs
    c. Malpractice GPCIs
    3. Impact of Revised GPCIs
    B. Payment Area (Locality) Changes
    C. Work RVUs--RVUs for Carrier-Priced and Non-Medicare CPT Codes
    1. Methodology (Includes Table 1--AMA RUC Recommendations and 
HCFA's Proposed RVUs)
    2. RUC Recommendations That Were Not Accepted
    a. Reconstructive and Cosmetic Plastic Surgery
    b. Maxillofacial Surgery (CPT Codes 21137 through 21139 and 
21181)
    c. Respiratory System--Laryngoplasty (CPT Code 31582) for 
Laryngeal Stenosis, with Graft or Core Mold, Including Tracheotomy
    d. Vascular--Penile Revascularization (CPT Code 37788), Artery 
with or without Vein Graft
    e. Vestibuloplasty (CPT Codes 40840 through 40845)
    f. Urology
    g. Ophthalmology
    h. Newborn Care
    3. Comment Process for Proposed RVUs
    4. Establishment of Practice Expense and Malpractice Expense 
RVUs
    D. Separate Payment for Physician Care Plan Oversight Services
    1. Background
    2. Physicians Eligible To Receive Payment
    3. Level of Payment
    4. Budget Neutrality
    5. Conditions for Payment
    E. Payment for Multiple Surgical Procedures
    F. Application of Site-of-Service Payment Differential
    G. Bundled Services
    1. Generation and Interpretation of Automated Data (CPT Codes 
78890 and 78891)
    2. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
    H. RVUs for Doppler Echocardiography (CPT Code 93325)
    I. Nuclear Medicine
    J. End-Stage Renal Disease (ESRD)
    1. Hospital Inpatient Dialysis on the Same Day as an Evaluation 
and Management Service
    2. Payment for Outpatient ESRD-Related Services under the 
Physician Fee Schedule
    a. Development of the Monthly Capitation Payment (MCP)
    b. Proposed Inclusion of the MCP under the Physician Fee 
Schedule
    K. Services Considered to Be Medicare Part A Services
III. Implementation of the Omnibus Budget Reconciliation Act of 1993 
(Public Law 103-66)--Payment for Antigens (Allergen Immunotherapy)
    A. Background and Legislative Change
    B. CPT and HCPCS Codes
    C. Proposed RVUs
    D. Budget Neutrality
    E. Transition
IV. Change in the MVPS Calculation for FY 1996
V. Changes to the Regulations
VI. Collection of Information Requirements
VII. Response to Comments
VIII. Regulatory Impact Analysis
    A. Regulatory Flexibility Act
    B. Effects of Implementing Proposed Policy Changes to GPCIs
    C. Payment Area (Locality) Changes
    D. Effects of Proposed Work RVUs for Carrier-Priced and Non-
Medicare CPT Codes
    E. Effects of Proposed Payment Policy Revisions
    1. Separate Payment for Physician Care Plan Oversight Services
    2. Payment for Multiple Surgical Procedures
    3. Application of Site-of-Service Payment Differential
    4. Bundled Services
    a. Generation and Interpretation of Automated Data (CPT Codes 
78890 and 78891)
    b. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
    5. RVUs for Doppler Echocardiography (CPT Code 93325)
    6. Nuclear Medicine
    7. ESRD--Hospital Inpatient Dialysis on the Same Day as an 
Evaluation and Management Service
    8. Services Considered to be Medicare Part A Services
    F. Effects of Payment for Antigens (Allergen Immunotherapy)
    G. Change in the MVPS Calculation for FY 1996
    H. Rural Hospital Impact Statement

Text of Proposed Regulations

Addenda

Addendum A--1994 Geographic Practice Cost Indices by Medicare 
Carrier and Locality
Addendum B--1996 Geographic Practice Cost Indices by Medicare 
Carrier and Locality
Addendum C--1995 Geographic Practice Cost Indices by Medicare 
Carrier and Locality
Addendum D--Changes in Geographic Adjustment Factor 1996 vs. 1994
Addendum E--1996 Geographic Practice Cost Indices and Geographic 
Adjustment Factors for States with Multiple Localities
Addendum F--1995 Geographic Practice Cost Indices and Geographic 
Adjustment Factors for States with Multiple Localities
Addendum G--Reference Set with 1994 Work RVUs
Addendum H--Procedure Codes Subject to the Site-of-Service 
Differential

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

AMA--American Medical Association
ASC--Ambulatory surgical center
CF--Conversion factor
CFR--Code of Federal Regulations
CHER--Center for Health Economics Research
CMD--Carrier medical director
CMSA--Consolidated Metropolitan Statistical Area
CPT--[Physicians'] Current Procedural Terminology (4th Edition, 
1994, copyrighted by the American Medical Association)
CRNA--Certified registered nurse anesthetist
CY--Calendar year
ESRD--End-Stage Renal Disease
FMR--Fair market rental
FY--Fiscal year
GAF--Geographic adjustment factor
GAO--General Accounting Office
GPCI--Geographic practice cost index
HCFA--Health Care Financing Administration
HCPCS--HCFA Common Procedure Coding System
HHA--Home health agency
HHS--[Department of] Health and Human Services
HUD--[Department of] Housing and Urban Development
JCAI--Joint Council of Allergy and Immunology
MCP--Monthly capitation payment
MEI--Medicare Economic Index
MSA--Metropolitan Statistical Area
MVPS--Medicare volume performance standards
NF--Nursing facility
NTIS--National Technical Information Service
OBRA--Omnibus Budget Reconciliation Act
PC--Professional component
RFA--Regulatory Flexibility Act
RUC--[AMA Specialty Society] Relative [Value] Update Committee
RVU--Relative value unit
SNF--Skilled Nursing Facility
TC--Technical component
UI--Urban Institute

I. Background

A. Legislative History

    The Medicare program was established in 1965 by the addition of 
title XVIII to the Social Security Act (the Act). Until January 1, 
1992, Medicare paid for physicians' services based on a reasonable 
charge system. This system led to payment variations among types of 
services, physician specialties, and geographic areas. Thus, the 
Congress included a physician payment reform provision in the Omnibus 
Budget Reconciliation Act of 1989 (OBRA '89), Public Law 101-239, 
enacted on December 19, 1989.
    Section 6102 of OBRA '89 amended title XVIII of the Act by adding a 
new section 1848, ``Payment for Physicians' Services.'' This section 
contains three major elements:
    (1) A fee schedule for the payment of physicians' services;
    (2) A Medicare volume performance standard (MVPS) for the rates of 
increase in Medicare expenditures for physicians' services; and
    (3) Limits on the amounts that nonparticipating physicians can 
charge beneficiaries. The Act requires that payments under the fee 
schedule be based on national uniform relative value units (RVUs) based 
on the resources used in furnishing a service. Section 1848(c) of the 
Act requires that national RVUs be established for physician work, 
practice expense, and malpractice. The Omnibus Budget Reconciliation 
Acts of 1990 (OBRA '90) and 1993 (OBRA '93), Public Laws 101-508 and 
103-66, enacted on November 5, 1990, and August 10, 1993, respectively, 
contained several modifications and clarifications to the OBRA '89 
provisions that established the physician fee schedule.
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the geographic practice cost indices (GPCIs) at least 
every 3 years. This section also requires us to phase in the adjustment 
over 2 years and implement only one-half of any adjustment if more than 
1 year has elapsed since the last GPCI revision. The GPCIs were first 
implemented in 1992 and have not been reviewed since that time. Thus, 
we are required to complete the first GPCI review and implement only 
one-half of any adjustment by 1995 and one-half in 1996.
    The Act requires that payments vary among fee schedule areas 
according to geographic indices. In general, the fee schedule areas 
that existed under the prior reasonable charge system were retained 
under the fee schedule. A detailed discussion of fee schedule areas can 
be found in the June 5, 1991 proposed rule (56 FR 25832) and in the 
November 25, 1991 final rule (56 FR 59514). We are required by section 
1848(e)(1)(A) of the Act to develop separate indices to measure 
relative cost differences among fee schedule areas compared to the 
national average for each of the three fee schedule components. While 
requiring that the practice expense GPCIs and malpractice GPCIs reflect 
the full relative cost differences, the Act requires that the work 
indices reflect only one-quarter of the relative cost differences 
compared to the national average.

B. Recent Federal Register Publications

    We published a final rule on November 25, 1991, (56 FR 59502) to 
implement section 1848 of the Act by establishing a fee schedule for 
physicians' services furnished on or after January 1, 1992. In the 
November 1991 final rule (56 FR 59511), we stated our intention to 
update RVUs for new and revised codes in the American Medical 
Association's (AMA) Physicians' Current Procedural Terminology (CPT) 
through an ``interim RVU'' process every year. Our first update to the 
RVUs was published on November 25, 1992, as a final notice with a 60-
day comment period on new and revised RVUs only (57 FR 55914).
    On July 14, 1993, we published a proposed rule (58 FR 37994) to 
announce our intention to revise the refinement process used to 
establish physician work RVUs and to revise payment policies for 
specific physician services and supplies. On December 2, 1993, we 
published a final rule (58 FR 63626) announcing revised payment 
policies and RVUs for 1994 (we solicited comments on new and revised 
RVUs).

II. Specific Proposals for Calendar Year (CY) 1995

A. GPCI Changes

1. Development of the GPCIs
    The GPCIs were developed by a joint effort of the Urban Institute 
(UI) and the Center for Health Economics Research (CHER) under contract 
to HCFA. Indices were developed that measured the relative cost 
differences among areas compared to the national average in a market 
basket of goods. In this case, the market basket consists of the 
resources used in operating a private medical practice. The resource 
inputs are: physician work or net income; employee wages; office rent; 
medical equipment, supplies, and other miscellaneous expenses; and 
malpractice insurance. Employee wages, rents, and miscellaneous 
expenses are combined to comprise the practice expense component of the 
GPCIs. The weights of these components in the current and the proposed 
revised GPCIs are as follows: 

------------------------------------------------------------------------
                                                         Percentage of  
                                                       practice expense 
                   Input component                   -------------------
                                                       Current   Revised
                                                        GPCI      GPCI  
------------------------------------------------------------------------
Physician Work......................................      54.2      54.2
Practice Expense....................................      40.2      41.0
  Employee Wages....................................      15.7      16.3
  Rent..............................................      11.1      10.3
  Miscellaneous Expenses............................      13.4      14.4
Malpractice.........................................       5.6       4.8
                                                     -------------------
      Total.........................................     100.0     100.0
------------------------------------------------------------------------

    The resource inputs and their weights were obtained from the AMA's 
Socioeconomic Characteristics of Medical Practice. The weights for the 
current GPCIs are from the AMA's 1987 survey, while the weights for the 
revised GPCIs are from the AMA's 1989 survey. The 1987 weights were the 
latest available when the current GPCIs were being developed. The 1989 
weights were used in revising the Medicare Economic Index (MEI) 
discussed in the November 1992 final rule (57 FR 55899). The MEI is a 
measure of annual increases in the cost of operating a private medical 
practice and is used in the annual update of the fee schedule 
conversion factor (CF). Since the GPCIs and the MEI use the same 
resource inputs to measure practice expenses--the GPCIs measure 
relative costs among areas while the MEI measures the national annual 
rate of increase in costs--we believe the same weights should be used.
    Once the components and their weights were determined, data sources 
had to be found that were widely and consistently available in all fee 
schedule areas to measure costs. After examining many sources, the 
following proxies were selected as the best available sources for 
measuring each component of the current GPCIs:
     Physician work--The median hourly earnings, based on a 20-
percent sample of 1980 census data, of workers in six professional 
specialty occupation categories (engineers, surveyors, and architects; 
natural scientists and mathematicians; teachers, counselors, and 
librarians; social scientists, social workers, and lawyers; registered 
nurses and pharmacists; writers, artists, and editors) with 5 or more 
years of college. Adjustments were made to produce a standard 
occupational mix in each area. The actual reported earnings of 
physicians were not used to adjust geographical differences in fees 
because these fees are, in large part, the determinants of the 
earnings. We believe that the earnings of physicians will vary among 
areas to the same degree that the earnings of other professionals vary.
     Employee wages--Median hourly wages of clerical workers, 
registered nurses, licensed practical nurses, and health technicians 
were also based on a 20-percent sample of 1980 census data.
     Office rents--Residential apartment rental data produced 
annually by the Department of Housing and Urban Development (HUD) were 
used because there were insufficient data on commercial rents across 
all fee schedule areas.
     Medical equipment, supplies, and other miscellaneous 
expenses--UI and CHER assumed that this component is represented by a 
national market and that costs do not vary appreciably among areas. 
This component's index is 1.000 for all areas to indicate no variation 
from the national average.
     Malpractice--Premiums in 1985 and 1986 for a mature 
``claims made'' policy (a policy that covers malpractice claims during 
the covered period) providing $100,000/$300,000 of coverage were used. 
Adjustments were made to incorporate the costs of $1 million/$3 million 
coverage and mandatory patient compensation fund requirements. Premium 
data were collected for physicians in three risk classes: low-risk 
(general practitioners who do not do surgery), moderate risk (general 
surgeons), and high-risk (orthopedic surgeons).
    The areas selected for measurement purposes were the Metropolitan 
Statistical Areas (MSAs). Non-MSA areas within a State were aggregated 
into one residual area. Using MSAs for measurement satisfied the 
criteria of (1) Homogeneity in resource input prices within the area, 
and (2) a large enough size so that market areas are self-contained to 
minimize border crossing; that is, physicians would not move their 
offices a few miles to secure higher payments and patients would tend 
to receive services within their area.
    The law requires, however, that the GPCIs reflect cost differences 
among fee schedule areas. Section 1848(j)(2) of the Act defines a fee 
schedule payment area as a locality that existed under the prior 
reasonable charge system. These reasonable charge localities were 
established by Medicare carriers on the basis of their knowledge of 
physician charging patterns and have changed little since the inception 
of the program in 1965. There is little consistency among carriers in 
locality structure. Some States contain a single locality, while others 
contain as many as 32 localities. Localities are unique to Medicare and 
do not necessarily correspond directly to political boundaries 
(counties or cities), geographic areas, or to the MSA/non-MSA 
structure. It was thus necessary to map Medicare localities to the MSA 
and non-MSA aggregation of GPCI data. Where localities crossed MSA 
boundaries, MSA indices were converted to Medicare locality indices by 
population weights.
    Detailed discussions of the methodology and data sources of the 
current GPCIs can be obtained by requesting the following studies from 
the National Technical Information Service (NTIS) by calling 1-800-553-
NTIS, or (703) 487-4650 in Springfield, Virginia:
     The Urban Institute GPCI report ``The Geographic Medicare 
Index: Alternative Approaches,'' NTIS PB89-216592.
     The supplement to ``The Geographic Medicare Index: 
Alternative Approaches,'' NTIS PB91-113506. This interim version was 
published in the September 4, 1990 notice for the model fee schedule 
(55 FR 36238).
     The Urban Institute report ``Refining the Malpractice 
Geographic Practice Cost Index,'' February 1991, NTIS PB91-155218. The 
related diskette is NTIS PB91-507491. This is the final version of the 
current GPCIs as published in the November 1991 final rule (56 FR 
59785).
2. Proposed Revised GPCIs
    The separate sections below on the revised GPCI components each 
contain a brief description of the differences in the current and the 
proposed revised GPCIs. The main criticism of the existing GPCIs is 
that they are outdated because they are based on old data; for example, 
1980 census data and 1985 and 1986 malpractice premiums, the most 
recent data available when the GPCIs were established. The revised 
GPCIs are based on the most current data available. As discussed in the 
brief descriptions of the revised indices, some minor changes from the 
current GPCI methodology were made in calculating some of the revised 
indices.
    One methodological change was made that applied across all indices. 
As mentioned earlier, under the current GPCIs, where Medicare 
localities crossed MSA boundaries, MSA indices were converted to 
locality indices by population weights. Medicare expenditure weights 
were not used because the expenditures under the reasonable charge 
system contained large differences unrelated to relative cost 
differences among areas. In calculating the proposed revised GPCIs, 
where localities crossed MSA boundaries, locality indices were 
calculated by weights based on full fee schedule RVUs, which do reflect 
relative cost differences among areas. Full fee schedule RVUs were used 
rather than actual 1993 payments because some fee schedule payments are 
still affected by the transition and, thus, still reflect some 
reasonable charge payment levels and will continue to do so until the 
fee schedule transition period is over in 1996. The advantages of RVU 
weighting are that (1) The GPCIs will more closely reflect physician 
practice costs in the area where the services are furnished, whereas 
population weights reflect costs where the population lives, and (2) 
budget neutrality is preserved when combining multiple localities into 
larger areas, such as statewide localities.
    a. Work GPCIs. Data from the 1990 20-percent sample of census data 
of median hourly earnings for the same six categories of professional 
specialty occupations as used in the current work GPCIs were used in 
calculating the revised work GPCIs. The current work GPCIs were 
calculated using 1980 census data of earnings for professionals with 5 
or more years of college. That sample was no longer available in the 
1990 census. The 1990 census educational classifications are by highest 
degree earned, rather than the 1980 census classification by years of 
schooling. Thus, it was not possible to obtain earnings exactly 
comparable to the 1980 data.
    For 1990, data are available for all education and advanced degree 
samples, but not for 5 or more years of college. We elected to use the 
all education sample because its larger sample sizes make it more 
stable and accurate in less populous areas. Although it could be argued 
that physicians' earnings might more closely approximate the earnings 
of professionals with advanced degrees, the differences between the all 
education and advanced degree indices were negligible in all but a few 
of the smallest localities. We believe that the small sample size of 
advanced degree occupations in these small localities may produce 
inaccurate results.
    The current work GPCIs utilize MSA-wide median wages for each 
county within an MSA. That is, all counties within an MSA are assigned 
the MSA-wide median wage even if there are wage variations within the 
MSA. We believe that this is appropriate for all but Consolidated 
Metropolitan Statistical Areas (CMSAs), the largest of the MSAs, such 
as New York. In these CMSAs, we replaced metropolitan-wide earnings 
with county-specific earnings. We believe that this change is 
appropriate because costs are, in fact, higher in central city areas 
(for example, Manhattan and San Francisco) than in the rest of the 
CMSA. County earnings better account for cost variations within these 
large metropolitan areas.
    The work GPCIs reflect only one-fourth of the relative cost 
differences as required by law.
    b. Practice expense GPCIs--(1) Employee Wage Indices. Data from the 
1990 20-percent sample of census data of median hourly earnings for the 
same categories of medical and clerical occupations used in the current 
practice expense GPCIs were used in the revised practice expense GPCIs. 
These revised GPCIs use 1990 rather than 1980 census data. As with the 
work GPCIs, county level data were used for CMSAs to better reflect the 
cost variations within these large metropolitan areas.
    (2) Office Rent Indices. As with the current practice expense 
GPCIs, HUD fair market rental (FMR) data for residential rents were 
again used as the proxy for physician office rents. The revised 
practice expense GPCIs reflect the final 1994 HUD FMRs. Like the work 
GPCIs and the employee wage index of the practice expense GPCIs, county 
level data were used in CMSAs to recognize the variations within the 
CMSA. This has the general effect of increasing the rent indices of 
Medicare localities comprised solely or primarily of central cities 
areas of CMSAs, for example, Manhattan and San Francisco.
    The major criticism of the practice expense GPCIs rent index is 
that residential rather than commercial rent data were used. As 
mentioned earlier, for constructing the GPCIs we needed data that were 
widely and consistently available across all fee schedule areas. As 
with the current GPCIs, in revising the GPCIs, we again searched for 
private sources of commercial rent data that were widely and 
consistently available.
    The private sources we found were not adequate. None of the sources 
contained data for nonmetropolitan areas, nor did any contain data for 
all metropolitan areas. The sources do not reflect the average 
commercial space in the area, but rather the particular type of space 
most relevant to the needs of the particular source's clients. In 
addition, the sample sizes were small. A comparison of the average 
rental for any particular city showed significant variation depending 
on the source. Also, we are not confident that the private commercial 
rent data that is available is representative of the type of office 
space used by physicians. In any case, the GPCIs measure relative 
differences among areas. We believe that commercial rents will 
generally vary among areas as residential rents vary.
    No national data are readily available for physician office rent. 
Thus, some proxy must be used for this portion of the index. In 
addition, commercial rent data are not available for all areas from 
published statistical sources. We believe that the HUD FMR data remain 
the best available data for constructing the office rental index. They 
are available for all areas, are updated on an annual basis, and are 
consistent among areas and from year to year. Moreover, physicians 
frequently locate in areas and office space that are residential rather 
than commercial, for example, in apartment complexes and small strip 
commercial centers adjacent to residential areas. Residential rents 
may, in fact, be a better measure of the differences among areas in the 
physician office market than a general commercial rental index.
    In any case, we are continuing to search for alternative sources of 
commercial rent data. We are currently analyzing rental data from the 
U.S. Postal Service, the General Services Administration, and the 
Internal Revenue Service. We are examining these data to assess their 
suitability for constructing rental indices.
    (3) Medical Equipment, Supplies, and Other Miscellaneous Expenses. 
As mentioned earlier, the GPCIs assume that this component has a 
national market and that input prices do not vary among geographic 
areas. We were unable to find any data sources that demonstrated price 
differences by geographic area. Anecdotal and interview data with 
suppliers and manufacturers were inconclusive. While some price 
differences may exist, they are more likely to be based on volume 
discounts rather than on geographic areas. Generally, it appears that 
manufacturers' prices do not vary among areas except for shipping 
costs. Since manufacturers and suppliers are located all over the 
country, shipping costs on the mainland do not vary significantly.
    We did consider an add-on for shipping costs to Alaska, Hawaii, and 
Puerto Rico to recognize the added shipping distance. We decided 
against an add-on because there were no data to indicate how much the 
costs of shipping medical equipment and supplies to these areas 
increased their costs. We were able to ascertain that commercial 
shippers like United Parcel Service and Federal Express generally 
charge about 10 percent more to ship to Puerto Rico and about 20 
percent more to ship to Alaska and Hawaii from the mainland. Medical 
equipment and supplies represent about 7 percent of physician practice 
costs. Even if shipping costs are 5 percent of the total equipment and 
supply costs, which we believe to be a high estimate, recognizing a 20-
percent increase in shipping costs would increase payment levels by 
only 0.07 percent (.20 x .05 x .07 = .0007). The medical equipment, 
supplies, and miscellaneous expense index for all areas will continue 
to be 1.000 in the revised GPCIs.
    c. Malpractice GPCIs. Malpractice premium data for a $1 million/$3 
million mature ``claims made'' policy were collected and mandatory 
patient compensation funds were considered. However, more recent and 
comprehensive malpractice insurance data were used in calculating the 
revised malpractice GPCIs. The revised malpractice GPCIs are based on 
1990 through 1992 premium data. Malpractice premiums are volatile and 
may change significantly from year to year. We decided to use the most 
recent 3-year average rather than the most recent single year to reduce 
the volatility and present a more accurate indication of malpractice 
premium trends over time.
    We collected data on more specialties and from more insurers than 
were used to construct the current index. We collected data on 20 
specialties, rather than on 3 as in the current malpractice GPCIs. The 
current malpractice GPCI data were largely drawn from a single 
nationwide insurer (St. Paul Fire and Marine) and were supplemented by 
several State-specific carriers in States in which St. Paul did not 
offer coverage. Subsequent analyses suggest that these data may no 
longer be representative of insurers operating in many States. For the 
revised malpractice GPCIs, data were collected from insurers that 
represent the great majority of the market in each State--about 82 
percent on average with 60 percent as the lowest State market share. We 
believe that the more recent and comprehensive data greatly improve the 
accuracy of the malpractice GPCIs.
    Detailed discussions of the technical aspects of the GPCIs 
including constructing a Laspereyes-type economic index, a discussion 
of other data sources that were examined and found to be inadequate 
and, therefore, not used, and many more detailed tables showing the 
differences among various alternatives for each of the GPCI studies can 
be obtained by requesting the following studies from NTIS by calling 1-
800-553-NTIS, or (703) 487-4650 in Springfield, Virginia:
     ``Updating the Geographic Practice Cost Index: Revised 
Cost Shares.'' Debra A. Dayhoff, John E. Schneider, and Gregory C. 
Pope. NTIS PB94-161072.
     ``Updating the Geographic Practice Cost Index: The 
Physician Work GPCI.'' Gregory C. Pope and Debra A. Dayhoff. NTIS PB94-
161080.
     ``Updating the Geographic Practice Cost Index: The 
Practice Expense GPCI.'' Gregory C. Pope, Debra A. Dayhoff, Angella R. 
Merrill, and Killard W. Adamache. NTIS PB94-161098.
     ``Updating the Geographic Practice Cost Index: The 
Malpractice GPCI.'' Stephen Zuckerman and Stephen Norton. NTIS PB94-
161106.
3. Impact of Revised GPCIs
    The proposed GPCIs would be implemented in a budget-neutral manner. 
They would not change the total national fee schedule payments that 
would have been made in 1995 had the current GPCIs been retained. The 
revised GPCIs will redistribute payments among fee schedule payment 
areas. The general geographic effects of this redistribution can be 
demonstrated by referring to Addenda A through F.
    Fee schedule payments are the product of the RVUs, the GPCIs, and 
the CF. The current GPCIs were used in computing the original 1992 
budget-neutral fee schedule CF. Updating the GPCIs changes the relative 
position of fee schedule areas compared to the national average. Since 
the changes represented by the proposed GPCIs could result in total 
payments either greater or less than what would have been paid if the 
GPCIs were not revised, it was necessary to rescale the proposed GPCIs 
to assure that their implementation is budget-neutral on a national 
basis. That is, the same total physician fee schedule payments would be 
made using the proposed GPCIs as would have been made were the current 
GPCIs retained.
    We calculated that the proposed GPCIs would have resulted in 
slightly lower total national payments under the fee schedule. Since 
the law requires that each of the fee schedule component RVUs--work, 
practice expense, and malpractice--are separately adjusted by their 
respective GPCIs, we adjusted each of the GPCI components separately. 
To assure budget-neutrality, it was necessary to increase the proposed 
work GPCIs by 0.073 percent; to increase the practice expense GPCIs by 
0.125 percent; and to increase the malpractice GPCIs by 2.307 percent. 
As all areas received the same percentage adjustments, the adjustments 
do not change the new relative positions among areas indicated by the 
proposed GPCIs.
    Addendum A contains the current GPCIs. Addendum B contains the 
proposed fully revised GPCIs that would be effective in 1996. Addendum 
C contains the transition GPCIs for 1995, that is, one-half of the 
effect of the revised GPCIs, as required by section 1848(e)(1)(C) of 
the Act. For example, the current GPCIs for Birmingham, Alabama from 
Addendum A are: work, 0.981; practice expense, 0.913; and malpractice, 
0.824. The revised 1996 GPCIs for Birmingham from Addendum B are: work, 
0.994; practice expense, 0.912; and malpractice, 0.927. Thus, the 
proposed work GPCI for Birmingham represents an increase of about 1.3 
percent, the revised practice expense GPCI represents a decrease of 
about 0.1 percent, and the revised malpractice GPCI represents an 
increase of about 12.5 percent. The 1995 transition GPCI changes shown 
in Addendum C would be about one-half of these amounts.
    Because the three GPCI components have different weights, the 
overall effect of the changes cannot be estimated by summing the 
effects of the work, practice expense, and malpractice changes. For 
example, summing the changes would indicate an increase for Birmingham 
of 13.7 percent.
    The overall effect of all three revised GPCI components on an area 
can be estimated by a comparison of area geographic adjustment factors 
(GAFs). The GAF for an area is the weighted composite of the three 
components. Using the revised practice cost weights in the table in 
section II.A.l, the current GAF for Birmingham is 0.946 
((.981 x .542)+(.913 x .410)+(.824 x .048)). The revised GAF is 0.957. 
Thus, the overall effect of the revised GPCIs on Birmingham would be to 
generally increase full fee schedule payments by about 1.2 percent. 
This is an estimate of the general overall effect on total payments 
across the entire Birmingham fee schedule area. Payment effects would 
vary for specific services as the component RVU weights for services 
vary from the GPCI component weights. (The closer the service component 
RVU weights are to the GPCI component weights, the closer the effect 
would be to the estimated GAF effect.) The effects on payments to 
individual physicians would vary depending on each physician's mix and 
volume of services. These are full fee schedule effects and do not 
reflect the 1992 through 1995 transition payment rules under which some 
payments are a blend of the fee schedule and the prior reasonable 
charge system.
    To facilitate a comparison of the overall effect of the current and 
revised GPCIs, Addendum D contains a comparison of existing and revised 
fee schedule area GAFs in descending order of change. As this Addendum 
shows, no area GAF would increase by more than 7.8 percent or decrease 
by more than about 8.4 percent under the revised GPCIs. Thus, area full 
fee schedule payments would generally change by no more than about 8 
percent under the revised GPCIs. Most areas would change by 
considerably less than this amount. About 75 percent of the areas would 
change by about 3 percent or less. Also, because of the 2-year 
transition, the effects in 1995 (the transition year) would be no more 
than one-half of the change indicated in Addendum D.
    A comparison of the GAFs yields a more comprehensive comparison of 
the effects of the revised GPCIs than does a comparison of the changes 
in the individual GPCIs. For example, the work GPCIs for San Francisco, 
California would increase from 1.038 to 1.068, an increase of 2.9 
percent. The malpractice GPCIs for San Francisco would decrease from 
1.370 to 0.596, a decrease of 56.5 percent. However, as mentioned 
earlier, the work component would represent about 54 percent, and the 
malpractice component would represent about 5 percent of total resource 
costs. Thus, the 2.9-percent increase in the work GPCIs would generally 
increase payments by about 1.6 percent, while the 57-percent decrease 
in the malpractice GPCIs would generally decrease payments by about 2.8 
percent, not 56.5 percent, in San Francisco. Overall, the San Francisco 
GAF would change from 1.163 to 1.153, a decrease of only about 0.9 
percent.
    Again we stress that the GPCIs measure relative cost differences 
among areas compared to the national average. The national average cost 
is represented by a value of about 1.000. (The value is not exactly 
1.000 because of the budget neutrality rescaling discussed earlier.) A 
revised GPCI showing a decrease from the current value does not 
necessarily mean that absolute costs of an individual physician or 
absolute area costs have decreased. Instead, it means that costs in 
that area have decreased compared to national average costs. For 
example, a change in the malpractice GPCI from 0.990 to 0.950 does not 
necessarily mean that malpractice premiums for that area have 
decreased. Instead, it means that the more recent and comprehensive 
1990 through 1992 malpractice data show that premiums in that area have 
decreased from 99 percent to 95 percent of the national average from 
the 1985 through 1986 premium data years.
    We have included two additional informational tables in Addenda E 
and F. Addendum E contains 1996 revised statewide GPCIs and GAFs for 
States currently containing multiple payment areas. Addendum F contains 
1995 transitional GPCIs and GAFs for these States. We are providing 
these tables so that States with multiple payment areas that are 
considering requesting a single statewide area can evaluate the effects 
of a change. These GPCIs are informational only and would have no 
effect unless a State changes to a single payment area.

B. Payment Area (Locality) Changes

    As stated earlier, section 1848(j)(2) of the Act defines a 
physician fee schedule payment area as the locality existing under the 
reasonable charge system. This section did not, however, delete section 
1842 of the Act, which gives us the authority to set localities. Thus, 
we believe that section 1848(j)(2) allows us to retain existing 
localities to facilitate changing to the physician fee schedule, but 
does not preclude us from making locality changes if warranted.
    There is little consistency among carriers in locality structure. 
In the June 1991 proposed rule (56 FR 25832) and the November 1991 
final rule (56 FR 59514) on the physician fee schedule, we stated that 
until we decide on ultimate large-scale changes, the only locality 
changes we would consider would be requests for converting individual 
States with multiple localities to a single statewide locality if ``* * 
* overwhelming support from the physician community for the changes can 
be demonstrated.'' This willingness to consider applications from 
physicians in a State for conversion to a statewide locality, if 
overwhelming support on the part of winning and losing physicians has 
been demonstrated, reflects our belief that statewide localities 
generally are preferable to the present Medicare localities because 
they simplify program administration and encourage physicians to 
practice in rural areas by reducing urban/rural payment differentials.
    We explained to States inquiring about conversions to a statewide 
payment area that these conversions involve taking a weighted average 
of the existing locality GPCIs to form a new statewide GPCI. This means 
that there may be ``losing'' (usually urban) areas, as well as 
``winning'' (usually rural) areas within a State if a conversion is 
made. Overall, the change is budget neutral within the State. We 
further informed these States that a simple resolution passed by the 
State medical society is not sufficient proof of overwhelming support 
for the change among both rural and urban physicians. To assist States 
in deciding whether to convert to a statewide payment area, we 
published an informational list of projected statewide GPCIs in the 
June 1991 proposed rule (56 FR 25972). A slightly revised list of 
projected statewide GPCIs was published in the December 1993 final rule 
(58 FR 63638).
    In most cases, States have been unable to generate the support of 
the losing physicians for the change. However, three States--Minnesota, 
Nebraska, and Oklahoma--were converted to statewide localities in 1992. 
(These conversions were announced in the November 1991 final rule (56 
FR 59514).) Two additional States--North Carolina and Ohio--were 
converted to statewide localities in 1994. (These conversions were 
announced in the December 1993 final rule (58 FR 63638).)
    We have since received formal petitions for statewide payment areas 
from Iowa and Pennsylvania. Only Iowa, however, presented evidence 
demonstrating sufficient support from ``losing'' areas to support the 
change. The Iowa Medical Society presented evidence that about 75 
percent of its members, including about 70 percent of members in 
``losing'' areas, support a statewide payment area. Therefore, we 
propose to convert Iowa to a statewide payment area effective January 
1, 1995.
    Section 1842 of the Act gives us the authority to set payment 
localities. We plan to review the existing payment locality structure 
for possible comprehensive changes in 1996. In the meantime, we will 
continue to consider statewide localities for those States in which 
physicians express a desire for a change. To ensure that the views of 
all physicians in an area are solicited and not just the views of 
physicians who are members of the State medical societies, we will, of 
course, announce any proposed changes in the criteria for establishing 
localities or proposed changes to payment areas as part of the 
rulemaking process for the physician fee schedule.

C. Work RVUs--Carrier-Price and Non-Medicare CPT Codes

    Several State Medicaid programs and commercial insurers have 
expressed interest in developing a resource-based fee schedule for 
physician services. To assist them, we are developing work RVUs for 
services not currently included in the Medicare physician fee schedule. 
These codes are currently noncovered, bundled, or carrier-priced under 
Medicare. We have no intention of changing our current payment policy 
regarding these services but, rather, wish to develop RVUs for these 
services to facilitate the adoption of the physician fee schedule by 
other payers.
1. Methodology (Includes Table 1--AMA RUC Recommendations and HCFA's 
Proposed RVUs)
    As described in the November 1991 final rule on the 1993 fee 
schedule (56 FR 59511), we established a process, considering 
recommendations received from the AMA Relative Value Update Committee 
(RUC), for establishing interim RVUs for codes. RUC was formed in 
November 1991 and grew out of a series of discussions between the AMA 
and the major national medical specialty societies. RUC is comprised of 
26 members; 22 are representatives of major specialty societies. The 
remaining members represent the AMA, the American Osteopathic 
Association, and the AMA's CPT Editorial Panel. The work of RUC is 
supported by an advisory committee made up of representatives of 65 
specialty societies in the AMA House of Delegates. RUC uses a small 
group survey method to produce work RVUs that are voted on by RUC, with 
a two-thirds vote required for acceptance. RUC then submits to us those 
accepted RVUs as recommended values.
    In December 1993, we received work RVU recommendations for 
approximately 90 codes from RUC. Physician panels consisting of carrier 
medical directors (CMDs) and HCFA staff reviewed the RUC 
recommendations by comparing them to other services on the fee schedule 
for which work RVUs had been established previously. The panels also 
considered the relationships among the codes for which we received RUC 
recommendations.
    Work RVUs were not assigned to CPT code 54440 (plastic operation of 
penis for injury) for reasons discussed below. We propose allowing 
carriers to price this procedure. Also, we are not proposing RVUs for 
18 preventive medicine procedures (CPT codes 99381 through 99404) for 
which we received RUC recommendations. We anticipate that these CPT 
codes will be revised and expect to receive new RUC recommendations for 
the revised codes. In addition, we received recommended RVUs for 
several transplant codes in December 1993. Since we were aware that RUC 
planned to address other transplant procedures in a subsequent meeting, 
we decided not to take action on the recommendations from the earlier 
meeting at this time. Instead, we plan to review the RUC RVUs for all 
transplant services during our refinement meeting scheduled for June 
1994. Of the remaining CPT codes, based on the review described above 
by carrier medical directors and HCFA staff, we propose accepting the 
RUC recommendations for approximately 50 percent of the codes and 
propose decreasing the RUC recommendations for approximately 50 percent 
of the codes.
    Table 1 is a listing of those codes for which we received 
recommended work RVUs. This table includes the following information:
     HCPCS (HCFA Common Procedure Coding System) code (Level 1 
HCPCS code). This is the CPT code for a service.
     Description. This is an abbreviated version of the 
narrative description of the code.
     RUC-recommended work RVUs. This column identifies the work 
RVUs recommended by RUC.
     HCFA proposed work RVUs. An asterisk identifies codes for 
which a discussion can be found in the narrative.

         Table 1.--AMA RUC Recommendations and HCFA's Proposals         
------------------------------------------------------------------------
                                                    RUC          HCFA   
HCPCS\1\              Description               recommended    proposed 
                                                 work RVUs    work RVUs 
------------------------------------------------------------------------
11950...  Therapy for contour defects.........         1.23      \2\0.85
11951...  Therapy for contour defects.........         1.73      \2\1.20
11952...  Therapy for contour defects.........         2.47      \2\1.71
11954...  Therapy for contour defects.........         2.71      \2\1.87
15775...  Hair transport punch grafts.........         5.31      \2\4.00
15776...  Hair transport punch grafts.........         7.44      \2\5.60
15850...  Removal of sutures..................         0.79         0.79
19396...  Design custom breast implant........         2.96      \2\1.70
21137...  Reduction of forehead...............        11.84      \2\9.50
21138...  Reduction of forehead...............        14.81     \2\11.85
21139...  Reduction of forehead...............        17.77     \2\14.22
21150...  Reconstruct midface, lefort.........        24.68        24.68
21151...  Reconstruct midface, lefort.........        27.64        27.64
21154...  Reconstruct midface, lefort.........        29.61        29.61
21155...  Reconstruct midface, lefort.........        33.56        33.56
21159...  Reconstruct midface, lefort.........        41.45        41.45
21160...  Reconstruct midface, lefort.........        45.40        45.40
21172...  Reconstruct orbit/forehead..........        27.14        27.14
21175...  Reconstruct orbit/forehead..........        32.57        32.57
21179...  Reconstruct entire forehead.........        21.71        21.71
21180...  Reconstruct entire forehead.........        24.68        24.68
21181...  Contour cranial bone lesion.........        15.30      \2\9.50
21182...  Reconstruct cranial bone............        31.58        31.58
21183...  Reconstruct cranial bone............        34.55        34.55
21184...  Reconstruct cranial bone............        37.51        37.51
21188...  Reconstruction of midface...........        21.71        21.71
30400...  Reconstruction of nose..............         9.87      \2\8.85
30410...  Reconstruction of nose..............        13.82      \2\9.95
30420...  Reconstruction of nose..............        16.62     \2\12.76
30430...  Revision of nose....................         7.40      \2\5.60
30435...  Revision of nose....................        13.57      \2\9.65
31582...  Revision of larynx..................        20.18     \2\16.32
31588...  Revision of larynx..................        11.95        11.95
31590...  Reinnervate larynx..................         6.43         6.43
31755...  Repair of windpipe..................        14.85        14.85
36460...  Transfusion service, fetal..........         6.66         6.66
37788...  Revascularization, penis............        22.70     \2\15.00
40840...  Reconstruction of mouth.............         9.87      \2\8.40
40842...  Reconstruction of mouth.............         9.87      \2\8.40
40843...  Reconstruction of mouth.............        13.82     \2\11.76
40844...  Reconstruction of mouth.............        18.26     \2\15.54
40845...  Reconstruction of mouth.............        21.32     \2\18.14
50320...  Removal of donor kidney.............        22.37     \2\16.16
54440...  Repair of penis.....................        11.84      \2\0.00
54670...  Repair of testis injury.............         6.50      \2\5.33
55870...  Electroejaculation..................         3.95      \2\0.30
61556...  Incise skull/sutures................        21.59        21.59
61557...  Incise skull/sutures................        21.71        21.71
61558...  Excision of skull/sutures...........        24.68        24.68
61563...  Excision of skull tumor.............        26.16        26.16
62115...  Reduction of skull defect...........        20.73        20.73
62116...  Reduction of skull defect...........        22.70        22.70
62117...  Reduction of skull defect...........        25.66        25.66
62120...  Repair skull cavity lesion..........        22.59        22.59
63700...  Repair of spinal herniation.........        15.79        15.79
63702...  Repair of spinal herniation.........        17.77        17.77
63704...  Repair of spinal herniation.........        19.74        19.74
63706...  Repair of spinal herniation.........        22.70        22.70
69300...  Revise external ear.................        10.86      \2\5.50
78351...  Bone mineral, dual photon...........         0.30         0.30
92015...  Refraction..........................         0.53      \2\0.38
92310...  Contact lens fitting................         1.18         1.18
92314...  Prescription of contact lens........         0.79      \2\0.64
92340...  Fitting of spectacles...............         0.37         0.37
92341...  Fitting of specatacles..............         0.51      \2\0.44
92342...  Fitting of spectacles...............         0.59      \2\0.51
92370...  Repair & adjust spectacles..........         0.49      \2\0.17
99431...  Initial care, normal newborn........         1.23      \2\0.74
99432...  Newborn care not in hospital........         1.28      \2\1.15
99433...  Normal newborn care, hospital.......         0.64      \2\0.44
99440...  Newborn rsuscitation................         2.96      \2\0.92
------------------------------------------------------------------------
\1\All numeric CPT HCPCS Copyright 1993 American Medical Association.   
\2\Discussion of HCFA rationale for proposed work RVUs follows this     
  table.                                                                

2. RUC Recommendations That Were Not Accepted
    The following is a summary of our rationale for not accepting 
particular RUC recommendations for assignment of RVUs for CPT codes 
that will appear in the 1995 CPT. It is arranged by type of service in 
CPT code order. In this summary, all references to assignment of RVUs 
pertain only to work RVUs unless we specify that they pertain to 
practice expense RVUs, malpractice expense RVUs, or total RVUs.
    a. Reconstructive and cosmetic plastic surgery. (1) Subcutaneous 
injection of ``filling'' material (CPT codes 11950 through 11952 and 
11954). The four CPT codes in this series are based on the amount of 
``filling'' material that ranges from less than 1 cc (CPT code 11950) 
to over 10 ccs (CPT code 11954). RUC recommended RVUs for each of these 
CPT codes of 1.23, 1.73, 2.47, and 2.71, respectively. We agree with 
the relative relationship among the CPT codes proposed by RUC but 
believe that the recommended RVUs are too high. We agree with RUC's use 
of CPT codes 11900 and 11901 (injection into skin lesions codes) as 
reference procedures. However, we do not believe that contouring 
involves as much work as RUC indicates. RUC recommended 1.23 RVUs for 
CPT code 11950, which is the injection of 1 cc or less. These RVUs are 
50 percent higher than the RVUs for CPT code 11901 (0.81 RVUs), which 
involve the injection of more than seven lesions. We do not believe 
that the difference in RVUs is as great as RUC recommends. We also used 
CPT code 20610 (injection into a major joint or bursa) as another 
reference code. This procedure involves 0.80 RVUs. Recognizing that CPT 
code 11950 involves more work than either of the two reference codes, 
we propose assigning it 0.85 RVUs. To determine RVUs for the other 
three codes, we first accepted RUC's relative relationships for the 
family of CPT codes. We then multiplied the ratio of .85 to 1.23 (69 
percent) by the RUC-recommended RVUs for CPT codes 11951, 11952, and 
11954, which resulted in RVUs of 1.20, 1.71, and 1.87, respectively.
    (2) Punch grafts for hair transplants (CPT codes 15775 and 15776). 
We agree with RUC's use of CPT code 15050 (pinch graft) as a reference 
service for valuing these CPT codes. However, we believe that the 
recommended RVUs, 5.31 for CPT code 15775 and 7.44 for CPT code 15776, 
are too high. The reference CPT code 15050 has a 90-day global period, 
and the hair transplant codes have no global period. Using the Harvard 
research team's data for intraservice work and same day preoperative 
and postoperative work, we first reduced the RVUs for CPT code 15050 to 
2.43 to make the global period comparable to that of the hair 
transplant codes. Because we believe that the work of CPT code 15775 is 
greater than that of a pinch graft but not double the work as RUC 
contends, we propose establishing 4.00 RVUs for CPT code 15775. We used 
the RUC relative relationships between these two codes to develop 5.60 
RVUs for CPT code 15776.
    (3) Preparation of moulage for custom breast implant (CPT code 
19396). RUC recommended 2.96 RVUs based on a multiple of the RVU 
assigned to CPT code 99241 (office consultation for a new or 
established patient). We agree with RUC's use of an evaluation and 
management code as a reference service but believe this procedure is 
comparable to CPT code 99204 (a new patient office visit lasting about 
45 minutes). Also RUC's recommended 2.96 RVUs are higher than those of 
CPT code 31622 (a bronchoscopy) although preparation of a moulage is of 
lower intensity. Therefore, we propose establishing 1.70 RVUs for this 
procedure.
    (4) Rhinoplasty (CPT codes 30400, 30410, 30420, 30430, and 30435). 
We propose decreasing all of RUC's recommended work RVUs for these CPT 
codes. RUC's survey data indicated that these services require an 
average of six post-hospital visits, including two level 4 office 
visits (CPT code 99214). We believe that these data overestimate past 
hospital work; this, in turn, contributed to an overestimation of the 
total work. In developing an RVU for CPT code 30400, we used three 
procedures as reference services: thyroid lobectomy (CPT code 60220, 
9.97 RVUs), appendectomy (CPT code 44950, 6.13 RVUs), and septoplasty 
(CPT code 30520, 5.61 RVUs). We believe that the work of CPT code 30400 
is less than that of CPT code 60220 but more than that of both CPT 
codes 44950 and 30520. Therefore, we are proposing 8.85 RVUs for CPT 
code 30400. These RVUs are comparable to the RVUs recommended by the 
Harvard research team rather than the RVUs recommended by RUC.
    In developing RVUs for CPT code 30410, we used major thoracotomy 
with exploration and biopsy (CPT code 32100, 10.18 RVUs) as a reference 
service. We believe that CPT code 30410 involves less work than a 
thoracotomy (CPT code 32100) and, therefore, prefer Harvard research 
team's recommended 9.95 RVUs, rather than the RUC recommendation of 
13.82 RVUs. We used CPT codes 30410 and 30520 (septoplasty) as the 
reference services for CPT code 30420 by summing the RVUs of the two 
services after applying the multiple-surgery rule to reduce the RVUs 
for the lesser valued service (CPT code 30520) by 50 percent. This 
resulted in 12.76 RVUs for CPT code 30420.
    The reference service we used for CPT code 30430 was a septoplasty 
(CPT code 30520, 5.61 RVUs). We believe a septoplasty requires slightly 
more work than CPT code 30430. Therefore, we propose assigning 5.60 
RVUs. These RVUs are comparable to the Harvard research team's 5.60 
RVUs, rather than RUC's recommendation of 7.40 RVUs.
    Because we believe that CPT code 30435 involves a similar level of 
work to CPT code 30410 (9.95 RVUs), we used RUC's rank ordering of 
these two codes (RUC rated CPT code 30435 slightly lower than CPT code 
30410) and, therefore, propose establishing 9.65 RVUs for CPT code 
30435.
    (5) Otoplasty (CPT code 69300). The full CPT description for this 
CPT code is ``otoplasty, protruding ear, with or without size 
reduction.'' In valuing this procedure, we interpreted the description 
as describing a unilateral procedure. However, the RUC vignette 
described a bilateral procedure, and RUC recommended 10.86 RVUs. We 
believe that the work for this procedure is approximately half of a 
complete rhinoplasty (CPT code 30410, 9.95 RVUs), less than an 
appendectomy (CPT code 44950, 6.13 RVUs) and slightly less than a 
septoplasty (CPT code 30520, 5.61 RVUs). Therefore, we propose 
establishing 5.50 RVUs for CPT code 69300. Also, we propose to 
establish a global period of 90 days as recommended by RUC.
    b. Maxillofacial surgery--(CPT codes 21137 through 21139 and 
21181). We believe that the RUC-recommended RVUs for procedures 
associated with forehead reductions (CPT codes 21137 through 21139) are 
too high but are correct in relation to each other. For CPT code 21137, 
RUC recommended 11.84 RVUs. We disagree, since a total lobectomy (CPT 
code 60220), which we believe is more complicated, is assigned 9.97 
RVUs. We believe that the work involved in performing CPT code 21137 is 
95 percent of that required for a total lobectomy. Therefore, we 
propose lowering the RVUs for CPT code 21137 by 5 percent resulting in 
9.50 RVUs.
    Since we agree with the RUC's recommended relationship among the 
procedures, we propose reducing proportionately the RVUs for CPT codes 
21138 and 21139. This results in an assignment of 11.85 RVUs for CPT 
code 21138 and 14.22 RVUs for CPT code 21139.
    We propose lowering the 15.30 RVUs recommended by RUC for CPT code 
21181 (reconstruction by contouring of benign tumor of cranial bones) 
to 9.50 making them the same for CPT code 21137. We believe this 
procedure is similar to that of CPT code 21137 and is more of a 
functional repair than a cosmetic repair and, therefore, the work 
involved is not as intense.
    c. Respiratory System--Laryngoplasty (CPT code 31582) for laryngeal 
stenosis, with graft or core mold, including tracheotomy. We disagree 
with RUC's recommended 20.18 RVUs for CPT code 31582. We believe the 
work of CPT code 31582 is similar to that of CPT code 31780 (excision 
of tracheal stenosis and anastomosis), which has 16.32 RVUs. Therefore, 
we propose lowering the RVUs for CPT code 31582 to 16.32. This 
comparison is validated by a comparison with CPT code 31580 (11.19 
RVUs), which involves 30 to 60 minutes less operative time and a 
shorter inpatient stay. A decrease of 5.13 RVUs adequately accounts for 
this difference.
    d. Vascular--Penile revascularization (CPT code 37788), artery with 
or without vein graft. We disagree with RUC's recommended 22.70 RVUs. 
We believe this procedure is not much more difficult than CPT code 
35656 (femoral-popliteal bypass graft), which is assigned 14.00 RVUs. 
Thus, we propose adding 1.00 RVU to the RVUs for CPT code 35656, which 
results in 15.00 RVUs for CPT code 37788.
    e. Vestibuloplasty (CPT codes 40840 through 40845). We believe the 
RUC-recommended RVUs for the vestibuloplasty CPT codes 40840 (9.87), 
40842 (9.87), 40843 (13.82), 40844 (18.26), and 40845 (21.32) are high 
in relation to other oral procedures. However, we do agree with the 
work relationship among the procedures. We believe that CPT code 40840 
(anterior vestibuloplasty) is no more difficult than CPT code 14060 
(adjacent tissue transfer or rearrangement, eyelids, nose, ears and/or 
lips; defect 10 square cm or less), which is assigned 8.40 RVUs. 
Therefore, we propose assigning 8.40 RVUs to CPT code 40840. This 
conclusion is supported by our belief that CPT code 40842 (unilateral 
posterior vestibuloplasty) is similar in nonoperative work to CPT code 
40654 (complex lip repair) (5.19 RVUs). We consider the greater 
operative work (about 60 minutes) of CPT code 40842 to be worth the 
additional 3.21 RVUs that would give it the same total RVUs (8.40) as 
CPT code 40840. Since we agree with the relationship established by RUC 
among CPT codes 40843 through 40845 and CPT codes 40840 and 40842, we 
propose retaining that relationship by applying a reduction of 14.9 
percent for each CPT code yielding 11.76 RVUs for CPT code 40843, 15.54 
RVUs for CPT code 40844, and 18.14 RVUs for CPT code 40845.
    f. Urology.
    (1) Donor nephrectomy with preparation and maintenance of homograft 
from a living donor (CPT code 50320). We disagree with RUC's 
recommended 22.37 RVUs. We believe this procedure is equivalent to CPT 
code 50220 (nephrectomy including partial ureterectomy, including rib 
resection), which has 16.16 RVUs. Therefore, we would assign 16.16 RVUs 
to CPT code 50320.
    (2) Plastic operation of penis for injury (CPT code 54440). We do 
not believe that the description for this procedure is sufficient to 
differentiate this procedure from the other plastic operation 
procedures of the penis (CPT codes 54352, 54360, 54380, 54385, and 
54390), which have RVUs that range from 11.52 to 24.11. In addition, 
the description of the intraservice work furnished by RUC states that 
``the variations and severity of the injuries differ and each repair is 
predicated on the type of injury * * * No case is the same * * * .'' 
Thus, we do not believe there is sufficient clinical documentation to 
support RUC's recommended 11.84 RVUs, which would place it in the 
family of plastic operations of the penis.
    Based on the description, we believe that the work reported for CPT 
code 54440 could be as justifiably compared to that of CPT code 13101 
(complex repair, trunk, 2.6 cm to 7.5 cm), a procedure with 3.91 RVUs, 
as with the more complex family above. However, because of the lack of 
specificity in the CPT code description, we propose continuing allowing 
carriers to price this procedure.
    (3) Suture or repair of testicular injury (CPT code 54670). RUC 
recommended 6.50 RVUs. We propose decreasing the RVUs for CPT code 
54670 to 5.33 based on the determination that the work involved is 
comparable to the higher end of the spectrum of work associated with 
CPT code 13132 (complex repair, forehead, cheeks, chin, mouth, neck, 
axillae, genitalia, hands and/or feet, 2.6 cm to 7.5 cm) (4.26 RVUs) 
and should be valued 25 percent more than CPT code 13132.
    (4) Electroejaculation (CPT code 55870). RUC recommended 3.95 RVUs. 
We propose decreasing the RVUs to 0.30. We believe that the work is 
similar to a level 1 emergency department visit (CPT code 99281), which 
has 0.28 RVUs. Also, the work is much less difficult than an ultrasound 
of the rectum (CPT code 76872), which has 0.70 RVUs or a diagnostic 
anoscopy (CPT code 46600), which has 0.51 RVUs. We believe that the 
time estimates furnished in the RUC recommendation are too high. If 
more intraoperative work than a proctoscopy is required, such as a 
catheterization to retrieve semen, we propose that the appropriate 
unusual services CPT modifier -22 be reported.
    g. Ophthalmology. (1) Determination of refractive state (CPT code 
92015). RUC recommended 0.53 RVUs for this procedure, slightly less 
than the 0.56 RVUs for its reference service CPT code 99213 (a 15-
minute office visit for an established patient). The RUC survey data, 
however, indicate that the intraservice time is 11 minutes. Because 11 
minutes correlates more closely to CPT code 99212 (a 10-minute office 
visit for established patient), we used CPT code 99212 (0.38 RVUs) as 
the reference service. Because we believe a determination of the 
refractive state to have slightly less intensity (work per unit time), 
we propose establishing 0.38 RVUs for CPT code 92015.
    (2) Prescription of optical and physical characteristics and 
fitting of contact lens and direction of fitting by an independent 
technician, except for aphakia (CPT code 92314). We accepted the RUC 
recommendation of 1.18 RVUs for the prescription and fitting of corneal 
lens, both eyes, except for aphakia (CPT code 92310). These RVUs are 93 
percent of the published 1.27 RVUs for CPT code 92312, which is the 
same service for aphakic patients. By accepting the RUC recommendation 
for CPT code 92310, we created a relationship between CPT codes that 
describe the same procedure except that one is ``for aphakia'' and one 
is ``except for aphakia.'' To be consistent in valuing the nonaphakic 
CPT codes at 93 percent of the comparable aphakic CPT codes, we propose 
reducing the RUC recommendation of 0.79 RVUs for CPT code 92314 to 0.64 
RVUs by multiplying the RVUs of corresponding CPT code 93216 (0.69 
RVUs) by 93 percent.
    (3) Fitting of spectacles, except for aphakia (CPT codes 92340 
through 92342). In this family of CPT codes, RUC recommended that the 
fitting of monofocal spectacles except for aphakia (CPT code 92340) 
should be assigned the same RVUs as CPT code 92352 (0.37 RVUs), which 
is the same service for aphakic patients. We agree with this 
equivalence. Also, we propose establishing 0.51 RVUs for CPT code 92342 
using the published 0.51 RVUs for CPT code 92353, which is the 
corresponding CPT code for aphakia. This results in a decrease from the 
RUC-recommended 0.59 RVUs. For the bifocal service (CPT code 92341), we 
propose establishing 0.44 RVUs for this CPT code by identifying the 
midpoint between the RVUs for CPT codes 92340 (0.37 RVUs) and 92342 
(0.51 RVUs). RUC recommended 0.51 RVUS, which is valued between the 
monofocal and multifocal services. Our proposal agrees with this rank 
order.
    (4) Repair and refitting of spectacles, except for aphakia (CPT 
code 92370). RUC recommended 0.49 RVUs. We reject RUC's use of CPT code 
99213 (office or other outpatient visit for the evaluation and 
management of an established patient, 0.56 RVUs) as a reference service 
because the median intraservice time of CPT code 92370 is 10 minutes 
and this procedure involves considerably less intensity than the work 
described under CPT code 99213. Since we believe the work intensity to 
be half that of an evaluation and management service, we propose 
establishing 0.17 RVUs for CPT code 92370, the same work value as CPT 
code 99211 (a 5 minute visit).
    h. Newborn care. (1) History and examination of the normal newborn 
infant (CPT code 99431). RUC recommended 1.23 RVUs for this CPT code. 
We believe these recommended RVUs, which are 15 percent higher than a 
level 1 hospital admission (CPT code 99221, 1.07 RVUs), are too high. 
We generally agree with the description of the work furnished to RUC 
but do not agree that the vignette used in the survey is consistent 
with the CPT code. The vignette states that issues such as feeding, 
immunizations, and car safety are discussed with both parents. We do 
not believe these services are included in this CPT code. We also 
disagree that the examination of a normal newborn requires more mental 
effort and judgment than the admission of a sick child or adult to the 
hospital. Therefore, we propose reducing the RVUs to 0.74, which is 
similar to a level two new patient visit (CPT code 99202).
    (2) Normal newborn care in other than a hospital or birthing room 
including physical examination of baby and conference(s) with parent(s) 
(CPT code 99432). RUC recommended 1.28 RVUs for this CPT code, which is 
0.05 RVUs higher than the recommended RVUs for normal newborn care in 
the hospital (CPT code 99431). Unlike the CPT code for normal newborn 
care in the hospital, this CPT code does include counseling. Therefore, 
we are not proposing to decrease the RVUs of CPT code 99432 as much as 
we are proposing to decrease the RVUs of CPT code 99431. We agree with 
the reference CPT code 99203 (level 3 office visit with a new patient 
(1.15 RVUs). We propose assigning the same RVUs of 1.15 to this normal 
newborn care code.
    (3) Subsequent hospital care for the evaluation and management of a 
normal newborn, per day (CPT code 99433). RUC recommended 0.65 RVUs for 
this CPT code. We disagree with these RVUs that are based on a 
comparison to a level 1 subsequent hospital care (CPT code 99231), 
which has 0.56 RVUs. The specialty society recommendation to RUC states 
that the work of the two CPT codes is the same but that more mental 
effort and judgment are needed. We disagree with this conclusion 
because we believe the intensity of work for a normal newborn is less 
than the intensity of work for a sick person in the hospital. 
Therefore, we propose assigning 0.44 RVUs to this CPT code.
    (4) Newborn resuscitation (CPT code 99440). RUC recommended 2.96 
RVUs based on a comparison to an hour of critical care (CPT code 99291, 
3.68 RVUs) and surveyed intraservice time of 45 minutes. We believe 
this recommendation is too high because the 45 minutes of intraservice 
time does not correspond to the actual time spent resuscitating the 
infant. We believe the survey has inadvertently included stand-by time 
for the C-section delivery that should be reported under CPT code 
99360. We agree that the critical care CPT code 99291 is the 
appropriate reference but believe a more typical time for newborn 
resuscitation would be 10 to 15 minutes. Therefore, we propose 
establishing 0.92 RVUs based on 15 minutes of physician work time 
compared to the critical care CPT code 99291 (3.68 RVUs) (3.68/4=0.92).
3. Comment Process for Proposed RVUs
    We will consider timely comments received on these proposed RVUs in 
developing final RVUs to be announced in the Federal Register in the 
fall of 1994, to be effective January 1, 1995.
    While we welcome comments in any format, we have found from past 
experience that the most useful comments have followed a particular 
format. We prefer receiving a clinical description of the service in 
question, and how the work of that service is analogous to one or more 
suitable reference services. Reference services should be commonly 
performed services with established work RVUs that are also fairly well 
understood outside their specialty. We have included a list of 
suggested reference services in Addendum G. On this list we have 
included the following services:
     Services that are commonly performed.
     Services that span the entire spectrum of work RVUs.
     At least three services furnished by each of the major 
specialties.
    If none of these services is suitable, we recommend choosing 
another service from the physician fee schedule and explaining why it 
is a better reference procedure.
    The clinical analogy for many services can be strengthened by 
dividing the service into the following three time segments and 
comparing these segments with the respective segments of the reference 
services:
     Preservice work--Work performed before the actual 
procedure such as review of records, solicitation of informed consent, 
and preparation of equipment. For surgical procedures with global 
periods, include estimates of the number, time, and type of visits from 
the day before surgery until the time the patient enters the operating 
room. The visit when the decision to operate is made and those visits 
preceding it should not be included.
     Intraservice work--The actual performance of the 
procedure. For evaluation and management services, this would be 
described as ``face-to-face'' time. For surgical procedures, include 
the entire time period from when the patient enters the operating room 
until the patient is discharged from the recovery room.
     Postservice work--Analysis of data collected from the 
encounter, preparation of a report, and communication of the results. 
For surgical procedures with global periods, include the number, time, 
and type of surgeon visits from the time the patient leaves the 
recovery room until the end of the global period. Also, distinguish 
inpatient from outpatient visits.
    In making these estimations, we encourage detailed clinical 
information such as data derived from operating logs, operative 
reports, and medical charts concerning the length of service, the 
amount of work performed before and after the service, and the length 
of stay in the hospital. The usefulness of these data is greatly 
enhanced if they are presented with comparable data for reference 
services. Also, we encourage evidence of why the data presented are 
nationally representative of the average work involved in providing the 
service.
    The concept of work involves more than just time; it is the product 
of time and ``intensity''. Intensity is best compared by breaking it 
into the following elements:
     Mental effort and judgment--Compare the service in 
question with a reference service as to the amount of clinical data 
that needs to be considered, the fund of knowledge required, the range 
of possible decisions, the number of factors considered in making a 
decision, and the complexity of how these factors interact.
     Technical skill and physical effort--One useful measure of 
skill is the point in training when a resident is expected to be able 
to perform the procedure. Physical effort can be compared by dividing 
services into tasks and making direct comparisons of tasks. In making 
comparisons, it is necessary to show that the differences in physical 
effort are not reflected accurately by differences in the time 
involved; if they are, considerations of physical effort amount to 
double counting.
     Psychological stress--Two kinds of psychological stress 
are usually associated with physician work. The first is the pressure 
involved when outcome is heavily dependent on skill and judgment and a 
mistake has serious consequences. The second relates to unpleasant 
conditions connected with the work that are not affected by skill or 
judgment. These circumstances would include situations with high rates 
of mortality or morbidity regardless of skill or judgment, difficult 
patients or families, or physician physical discomfort. Of the two 
forms of stress, only the former is fully accepted as an aspect of 
work; many consider the latter to be a highly variable function of 
physician personality.
    Intensity often varies significantly in the course of furnishing a 
service. One common mistake is to ``anchor,'' to treat points of 
maximum intensity during the service as the basis for comparing 
services. It is unlikely that the maximum is an accurate reflection of 
the average intensity of a service: a lengthy procedure that is simple 
except for a few moments of extreme intensity is probably less work 
than one of equal length during which a fairly high level of intensity 
is maintained throughout.
4. Establishment of Practice Expense and Malpractice Expense RVUs
     To the extent possible, we would use Medicare charge data 
to establish practice expense and malpractice expense RVUs for these 
codes. The RVUs would be calculated according to the statutory formula 
that requires us to apply historical practice cost shares to a base 
allowed charge for the service. To determine the practice cost shares, 
we would use data from the AMA's Socioeconomic Monitoring Survey for 
physician specialties.
    If Medicare charge data do not exist, are insufficient, or are 
unreliable for reasons such as variations in interpretation of the 
code, we propose to establish practice expense and malpractice expense 
RVUs by one of several extrapolation techniques. For example, if we 
have already established RVUs on the basis of reliable charge data for 
an analogous procedure with similar practice expenses, we propose to 
use the charges for the analogous code. If there is no analogous code, 
we would impute the practice expense and malpractice expense RVUs from 
the work RVUs. Essentially, we would derive the total RVUs from the 
work RVUs and then apply the practice cost shares for the specialty 
most closely associated with the procedure to determine the practice 
expense and malpractice expense RVUs. For example, if a procedure has 
6.00 work RVUs, and the specialty practice cost percentages for the 
specialty furnishing the service are 60-percent work, 30-percent 
practice expenses, and 10-percent malpractice, then the total RVUs are 
10.00 (6/.60), the practice expense RVUs would be 3.00 (.30 x 10), and 
the malpractice expense RVU would be 1.00 (.10 x 10).

D. Separate Payment for Physician Care Plan Oversight Services

1. Background
    Under current Medicare policy, separate payment is not made for 
physician care plan oversight services. While the services are covered, 
they are considered part of the physician work involved in other 
services, both visits and procedures; payment for the visit or 
procedure encompasses payment for these services. We continue to 
believe that most of the tasks associated with care plan oversight are 
of this type and are accounted for in the pre- and post-work RVU 
components for the visit. However, we are aware that, in certain 
situations, physicians furnish significant medical management services 
for which our current policy may not provide adequate payment.
    In the July 1993 Federal Register, we solicited comments regarding 
a possible policy change to pay separately for case management 
services. We received comments from specialty groups and individuals 
indicating that physicians spend considerable time furnishing these 
services to patients. Most commenters believed that we should pay 
separately for these services and supported the use of the CPT codes 
for care plan oversight (99375 and 99376), which were established in 
1994. We believe the term ``care plan oversight'' more accurately 
describes the services referred to in our proposed rule than the term 
``case management.''
    The CPT defines care plan oversight (CPT code 99375) as ``physician 
supervision of patients under care of home health agencies, hospice or 
nursing facility patients (patient not present) requiring complex or 
multidisciplinary care modalities involving regular physician 
development and/or revision of care plans, review of subsequent reports 
of patient status, review of related laboratory and other studies, 
communication (including telephone calls) with other health care 
professionals involved in patient's care, integration of new 
information into the medical treatment plan and/or adjustment of 
medical therapy, within a 30-day period; 30-60 minutes.'' The second 
code, CPT code 99376, is for services requiring more than 60 minutes of 
physician time. These codes are included in the 1994 fee schedule as 
codes that are bundled into the visits or other procedures; separate 
payment for them is not allowed.
    We propose to allow separate payment for care plan oversight 
services furnished in 1995 but only for the oversight of beneficiaries 
who are receiving Medicare covered home health care services. We do not 
propose to recognize separate payment for care plan oversight for 
beneficiaries in hospices, beneficiaries under the care of a home 
health agency (HHA) but not receiving covered home health care, and 
beneficiaries residing in skilled nursing facilities (SNFs) and nursing 
facilities (NFs). Our reasons follow.
    With respect to patients who are under the care of HHAs who are not 
receiving Medicare covered HHA benefits, we do not believe that many 
cases require the type of complex care plan oversight for which we are 
proposing to pay. Some of these patients are not homebound and could 
see the physician in the office (although absences from the house to 
receive medical treatment do not affect a patient's ``homebound'' 
status for purposes of qualifying for home health benefits). Other 
patients are receiving nonskilled services and do not require 
substantive care plan oversight. With respect to hospice patients, we 
do not believe that we should allow a separate payment for care plan 
oversight services furnished to these patients because payment for 
these services is included in the prospective rates paid to the 
hospices. Separate payment for complex medical management would result 
in a duplication of Medicare payments for these services when furnished 
to hospice patients.
    As to SNF and NF patients, the work RVUs for the SNF and NF 
evaluation and management codes for new or established patients were 
specifically increased in 1993 by 0.21 for CPT code 99301, 0.63 for CPT 
code 99302, 0.91 for CPT code 99303, 0.07 for CPT code 99311, 0.22 for 
CPT code 99312, and 0.21 for CPT code 99313 to account for care plan 
oversight performed in conjunction with those visits. Physicians are 
required to see patients in SNFs for an initial comprehensive 
assessment at least once every 30 days for the first 90 days and at 
least once every 60 days thereafter. Also, physicians are required to 
perform reassessments annually and after any episodes when the 
patient's condition changes significantly. Therefore, the frequency of 
visits and payment for periodic reassessments ensure that physicians 
receive payment for care plan oversight services furnished to SNF 
patients.
    Although the home visit codes were also increased in 1993, we do 
not believe that a similar conclusion can be made for HHA patients 
since there is no direct correlation between those patients and the 
home visit codes. Further, the amount of care plan oversight required 
for HHA patients can be considerable. While we currently wish to limit 
payment for care plan oversight services to those furnished to patients 
receiving HHA services that are covered by Medicare, we will reconsider 
our decision to pay for these services in other situations in the 
future if we find good cause to do so.
    Since the conditions for which we would pay for these services 
differ from the CPT definition, we propose to establish a new alpha-
numeric code (level 2 HCPCS code).
2. Physicians Eligible to Receive Payment
    We believe, in general, only one physician is responsible for 
signing the plan of care for HHA patients. Furthermore, because the 
complex care plan oversight services for which we would pay require at 
least 30 minutes per month per patient, we believe that only one 
physician per month would meet our requirements. This policy conforms 
with the CPT instructions that only one physician may report services 
for a given period of time. We consider the care plan oversight 
services that are directly related to a surgical procedure and 
furnished during the global period of the surgery to be included in the 
global fee for the procedure. However, surgeons can be paid for care 
plan oversight during the global fee period if the service is not 
related to the surgery. (Modifier -24 with documentation would be used 
to report these services.) We expect that most of these services would 
be reported by primary care physicians.
    We would not allow payment to a physician who has a significant 
ownership interest in, or a significant financial or contractual 
relationship with, an HHA (see Sec. 424.22(d) regarding the limitations 
on certification of home health services).
3. Level of Payment
    We propose to establish one level of payment for all care plan 
oversight services requiring at least 30 minutes per month. We do not 
propose to establish a second level of payment for care plan oversight 
activities requiring 60 or more minutes, as indicated by the CPT 
definitions, because we believe that the typical case for which we 
propose payment requires 30 to 60 minutes per month.
    We believe the physician work involved in care plan oversight is 
similar to that described as hospital discharge day service (CPT code 
99238), and we would assign the same level of RVUs to the code we 
establish for care plan oversight. Currently CPT code 99238 is assigned 
1.63 total RVUs (1.07 work, 0.52 practice expense, and 0.06 
malpractice). We propose to subject these services to the CF for 
nonsurgical services other than primary care. We will make a final 
determination, based upon our review of the public comments, in the 
final rule.
4. Budget Neutrality
    As indicated above, we do not consider care plan oversight to be a 
new service. Medicare payment to the physician for covered visits and 
procedures has always included payment for covered care plan oversight 
services. Medicare has never paid separately for these covered services 
under the physician fee schedule. We also believe our long-standing 
policy of bundling care plan oversight into the primary service 
furnished by the physician has reflected physicians' historic billing 
practices in this regard. Since we do not consider care plan oversight 
to be a new service but rather an ``unbundling'' of the service from 
payment for existing services, we consider this a change requiring a 
budget neutrality adjustment.
    Section 1848(c)(2)(B) of the Act provides that adjustments in RVUs 
may not cause total fee schedule payments to differ by more than $20 
million from what they would have been had the adjustments not been 
made. We believe it is appropriate to adjust RVUs across all physician 
services to pay an additional amount for this service under the 
conditions described below.
    We would consider this adjustment to be ``interim'' for three 
years, during which time we would monitor the use of this service. If 
the use of this service is determined to be significantly higher than 
expected, we would make an additional adjustment to achieve budget 
neutrality.
5. Conditions for Payment
    We propose to allow separate payment for care plan oversight for a 
patient receiving HHA services that are covered by Medicare. The care 
plan oversight services must require recurrent physician supervision of 
therapy (patient not present) involving 30 or more minutes of the 
physician's time in a 30-day period. The patient must require complex 
or multidisciplinary care modalities involving regular physician 
development or revision of care plans, review of subsequent reports of 
patient status, review of related laboratory and other studies, 
communication (including telephone calls) with other health care 
professionals involved in the patient's care, integration of new 
information into the medical treatment plan, or adjustment of medical 
therapy. Since the conditions for which we would pay for these services 
differ from the CPT definition, we would establish a level 2 HCPCS code 
with the aforementioned definition.
    We would allow payment to one physician per patient during a 30-day 
period. We would not allow payment to a physician who has a significant 
financial or contractual relationship with an HHA (Sec. 424.22(d)). 
Furthermore, we would not allow payment unless the physician has seen 
the patient within the 6-month period before the 30-day period for 
which the physician first bills for care plan oversight to ensure 
physician involvement in establishing the plan of care.
    We would pay for this service during a global period of another 
service if the care plan oversight is documented to be unrelated to the 
surgery and identified by modifier -24. However, we would not pay for 
this service during the same month a physician bills for the hospital 
discharge under CPT code 99238 because the payment for CPT code 99238 
includes payment for care plan oversight.
    Physicians must document in their records the care plan oversight 
services they furnish, including the duration of time spent on the 
services for which payment is claimed. We plan to conduct post-pay 
monitoring on the use of these codes. The monitoring may be performed 
on a sample basis or focused on physicians who are high users of the 
code. The purpose of the monitoring would be, in part, to furnish 
additional provider education on the proper use of the code and the 
conditions for which Medicare recognizes payment.
    While we are proposing to establish an allowance for home health 
care plan oversight under the physician fee schedule, we have two major 
concerns that need to be resolved before we would implement the 
proposal. The first concern relates to the interaction of this proposal 
with another initiative to improve the Medicare home health benefit. We 
have begun a major review of this benefit and will be working with 
beneficiary and provider groups and other interested parties. Our 
examination will include the recent rapid cost growth as well as 
options for simplifying the benefit. Another purpose of this initiative 
is to examine options for assuring the quality of care and enhancing 
outcomes. Some of these options may require legislation. While this 
proposed rule is intended to reimburse physicians for carrying out 
responsibilities currently mandated by Medicare, the new home health 
initiative will also examine all home health requirements, including 
care plan oversight. One specific issue is the extent to which nurse 
practitioners and clinical nurse specialists can substitute for 
physicians in overseeing certain aspects of patient care. The OBRA '89 
amendments, for example, permit nurse practitioners and clinical nurse 
specialists to certify and recertify SNF care when working in 
collaboration with a physician. Therefore, we would like comments from 
beneficiaries, their families, consumer groups, physicians, nurses, and 
HHA providers regarding the following issues:
     To what extent are physicians involved in developing, 
monitoring, and altering the plan of care? What specific management 
activities do they perform and for what proportion of their caseload do 
these activities require 30 or more minutes each month?
     Which patient characteristics or services require 
physician case management and which do not?
     Can some patients who require case management be safely 
managed by nurses or nurse practitioners rather than physicians, and if 
so, what are their characteristics?
     Are there any lessons relevant to home health from the SNF 
experience in which nurse practitioners and clinical nurse specialists 
have been permitted to certify SNF care?
    We will consider the responses to these questions as well as 
recommendations resulting from the home health initiative when deciding 
whether to adopt or modify this proposal to reimburse physicians 
separately for care plan oversight services effective January 1, 1995.
    Our second major concern relates to the impact of the provision on 
beneficiaries, that is, additional beneficiary liability due to the 
coinsurance payments for care plan oversight. Since we would implement 
this in a budget-neutral manner by reducing the RVUs for all other 
services, the coinsurance amounts for all other physician services 
would actually decrease. We estimate that the average HHA beneficiary 
will be liable only for approximately $16 in coinsurance for care plan 
oversight services per year. We believe that approximately 75 percent 
of these beneficiaries have some type of supplemental insurance that 
will cover the additional coinsurance amount.
    Also, we are aware of concerns that beneficiaries may be liable for 
additional out-of-pocket expenses for services that they may not 
realize are being provided because the work in care plan oversight does 
not necessarily require a face-to-face encounter between the patient 
and the physician. We will work with HHA and physician groups to 
encourage providers to inform beneficiaries that physicians may bill 
and that Medicare will pay for these services when the specified 
conditions are met. Our discussions with medical societies indicate 
that physicians would do this as a matter of course. In addition, we 
would advise beneficiaries of this change in policy through special 
mailings or in the Explanation of Medicare Benefits.
    We considered requiring beneficiaries to designate a particular 
physician as the provider of care plan oversight. However, designating 
a physician would not qualify that physician for payment if the 
conditions were not met and could, therefore, place an unnecessary 
burden on the patient or the patient's family. In addition, it would be 
difficult and costly for the carriers to administer.
    Our reason for proposing separate payment for care plan oversight 
is to provide fair compensation for services physicians are already 
required to perform. Also, it has been suggested that paying for these 
services could be an incentive for greater physician involvement in the 
care of HHA beneficiaries.
    We request comments on all aspects of our proposal, and are 
particularly interested in receiving comments from beneficiaries, their 
families, beneficiary advocacy groups, physicians, and HHAs on 
beneficiary liability concerns.

E. Payment for Multiple Surgical Procedures

    We propose to revise our regular multiple surgery reduction rules 
to base payment on the lesser of the actual charge or 100 percent of 
the fee schedule amount for the procedure with the highest fee schedule 
payment and to base payment on the lesser of the actual charge or 50 
percent of the fee schedule amount for the second through the fifth 
surgical procedures when the procedures are performed on the same 
patient on the same day by the same surgeon. Surgical procedures beyond 
the fifth procedure would be priced by carriers ``by report'' based on 
documentation of the services furnished.
    We currently reduce payment for subsequent surgeries when a 
physician performs more than one surgery on a patient on the same day. 
We also reduce payment for the second procedure when a physician does a 
bilateral procedure (for example, bilateral knee replacements). We 
implemented the multiple and bilateral surgery reduction policies when 
the fee schedule was implemented in 1992 because carriers had 
historically reduced payment when more than one surgery was performed 
by a physician for a patient on the same day. The carriers and we 
believed that there was less physician work involved when a physician 
did multiple procedures on the same day than when the surgeries were 
performed separately.
    We currently have three different sets of multiple surgery rules: 
special dermatology rules, special endoscopy rules, and standard 
multiple surgery rules. The special dermatology rules base payment for 
the highest priced procedure on the lesser of the actual charge or 100 
percent of the fee schedule amount, base payment for the second through 
fifth procedures on the lesser of the actual charge or 50 percent of 
the fee schedule amount, and base payment for subsequent procedures 
``by report.'' The special endoscopy rules base payment for the highest 
priced procedure on the lesser of the actual charge or 100 percent of 
the fee schedule amount (unless the regular multiple procedure rules 
apply to it) and base payment for subsequent procedures in the same 
endoscopy family on the incremental increase in payment over the base 
code. We are not proposing changes to the special dermatology rules or 
the endoscopy rules.
    The standard multiple surgery rules that apply to most other 
surgical procedures require carriers to rank the procedures by payment 
amount in descending order and base payment for the highest priced 
procedure on the lesser of the actual charge or 100 percent of the fee 
schedule payment. Carriers base payment for the second procedure at 50 
percent; the third, fourth, and fifth procedures at 25 percent each; 
and procedures subsequent to the fifth procedure ``by report.'' In 
addition, the bilateral procedure policy (a variation of multiple 
surgery but treated as a different policy) requires carriers to base 
payment for the first procedure on the lesser of the actual charge or 
100 percent of the fee schedule payment and to base payment for the 
second procedure on the lesser of the actual charge or 50 percent of 
the fee schedule payment for the code.
    Many physicians have objected to the standard multiple procedure 
reductions. They believe the work included in the global payment for 
the surgery is not reduced when they do more than one procedure on the 
same day and, therefore, that they should be paid the full global fee 
for all procedures they perform on a patient on the same day. As a 
result of these comments, we contracted for a study of the work in 
multiple and bilateral surgical procedures. This study was performed by 
the research team at the Harvard School of Public Health that furnished 
the data on which the work RVUs for many services in the fee schedule 
are based. The results of this study are available from NTIS by calling 
1-800-553-NTIS, or (703) 487-4650 in Springfield, Virginia and 
requesting the following study:
     ``A National Study of Resource Based Relative Value Scales 
for Physician Services: MFS Refinement Final Report; Phase IV.'' Hsiao, 
Braun, Dunn, Cohen, Dernberg, Sacher, and Stamenovic. Department of 
Health Policy and Management, Harvard School of Public Health. HCFA 
contract 500-92-0025. July 30, 1993. NTIS PB94-115094.
    The Harvard study found that when more than one procedure is 
performed on the same day, the level of physician work for each 
subsequent procedure is approximately 50 percent of what the work would 
have been had each procedure been the only procedure performed that 
day. This finding implies that an appropriate multiple surgery 
reduction would be to pay 100 percent for the highest priced procedure 
and 50 percent for the second and subsequent procedures. In addition, 
the Harvard study found that when the physician performs a bilateral 
procedure, the work required by the second procedure is only 40 percent 
of the work that would have been required had both procedures not been 
done on the same day.
    Based on the findings of this study, we propose to revise the 
current multiple surgery policy to base payment on the lesser of the 
actual charge or 100 percent of the fee schedule for the highest priced 
service and the lesser of the actual charge or 50 percent of the fee 
schedule for the second through the fifth services. Under this proposed 
change, the standard multiple surgery policy would be identical to the 
current special dermatology policy that now applies to some dermatology 
services. This change would also simplify Medicare policy because we 
would have two rather than three multiple surgery policies since the 
services now under the special dermatology policy and those under the 
standard multiple surgery policy would be under the same multiple 
surgery policy.
    Carriers would continue to pay for surgical procedures subsequent 
to the fifth procedure on a ``by report'' basis. We believe that this 
review of the documentation for procedures after the fifth procedure is 
necessary to ensure proper coding and payment for these services. The 
frequency of more than five surgeries performed by the same physician 
on the same day is very small, and the study did not look at these 
occurrences. Moreover, our CMDs advise us that review of these 
occurrences often results in a determination that the services are 
incorrectly coded, or, rarely, a finding that the case is an 
extraordinarily difficult situation in which more payment may be 
appropriate than the multiple surgery rules would otherwise permit. 
Therefore, we continue to believe that ``by report'' review and payment 
is appropriate for the sixth and subsequent procedures performed on the 
same day.
    We are not proposing any changes to the current policy for payment 
of bilateral procedures at this time, notwithstanding the findings of 
the Harvard study that it may be appropriate to decrease our payment 
from 150 percent to 140 percent when the service is bilateral. As we 
indicated above, the bilateral policy is a variation of the multiple 
surgery policy. We prefer to retain a consistent policy of payment at 
50 percent for a second surgical procedure performed on the same day as 
another surgery even when the second procedure is the same CPT code as 
the first.

F. Application of Site-of-Service Payment Differential

    Services that are performed more than 50 percent of the time in 
office settings are subject to a payment limit if they are performed in 
hospital outpatient departments and inpatient settings. For these 
procedures, the practice expense RVUs are reduced by 50 percent. This 
limitation reflects the fact that practice expenses are lower for 
services performed in hospital settings using hospital equipment, 
personnel, and space. Because procedures that are on the list of 
Medicare-approved ASC procedures are generally furnished less than 50 
percent of the time in office settings, these procedures are not 
subject to this reduction.
    We used 1989 data to establish the current list of ASC procedures 
subject to this site-of-service limitation. We propose to update this 
list using 1993 data to be effective for services furnished on or after 
January 1, 1995. To avoid any concern about the statistical validity of 
the data for low volume procedures, we would exclude any procedure 
performed less than 100 times annually. However, if the procedure is 
part of a ``family'' of codes that are otherwise on the site-of-service 
list, we would include it even if the volume is less than the 100-
procedure threshold. (The current list excludes all procedures with 
volumes less than 1,000 in 1989.)
    In addition, we propose to add certain procedures to the list that 
were proposed for removal from the list of approved ASC procedures. 
(The proposed notice listing the proposed deletions was entitled 
``Proposed Additions to and Deletions from the Current List of Covered 
Procedures for Ambulatory Surgical Centers'' and was published in the 
Federal Register on December 14, 1993 (58 FR 65357).) If these 
procedures are ultimately not removed from the ASC list by the time we 
publish the final rule, the procedures would not be included as 
additions to the list.
    The procedures we propose to add to the site-of-service list based 
on the more current data and the criteria outlined above are in 
Addendum H. We propose removing the following procedures from the site-
of-service list: 

------------------------------------------------------------------------
     HCPCS                             Description                      
------------------------------------------------------------------------
29530...........  Strapping of knee.                                    
36425...........  Establish access to vein.                             
36500...........  Insertion of catheter, vein.                          
64425...........  Injection for nerve block.                            
64640...........  Injection treatment of nerve.                         
92018...........  New eye exam and treatment.                           
96440...........  Chemotherapy, intracavitary.                          
99275...........  Confirmatory consultation.                            
------------------------------------------------------------------------

G. Bundled Services

1. Generation and Interpretation of Automated Data (CPT Codes 78890 and 
78891)
    The CPT states that CPT codes 78890 and 78891 should be reported in 
addition to a primary procedure. The Medicare charge data show that in 
1992 (the latest year for which we have complete data), CPT codes 78890 
and 78891 were billed in addition to a primary procedure only 12.7 
percent and 2.5 percent of the time, respectively. The data indicate 
that these codes are being used incorrectly.
    In addition, the work involved in the primary procedures with which 
CPT codes 78890 and 78891 have been billed includes the generation and 
interpretation of automated data. The RVUs for these primary 
procedures, for example, nuclear medicine procedures and cardiac stress 
tests, include a data component.
    Therefore, we propose to bundle payment for CPT codes 78890 and 
78891 into the payment for the primary procedure and assign a ``B'' 
status indicator to show that payment would be bundled into the payment 
for another service. By bundling these CPT codes, we avoid paying twice 
for the same service. We do not believe that separate payment should be 
made for these codes. We would redistribute the RVUs associated with 
CPT codes 78890 and 78891 across all codes.
2. Noninvasive Ear or Pulse Oximetry (CPT Code 94760)
    At present, we allow separate payment for pulse oximetry testing 
(CPT code 94760) under the fee schedule. However, we believe this is a 
simple monitoring test that should be considered part of the larger 
procedure with which it is performed. Pulse oximetry is performed 
either as part of anesthesia monitoring or as part of a study or 
assessment such as sleep studies and pulmonary function tests. 
Therefore, we propose to assign a ``B'' status indicator to CPT code 
94760. Thus, payment for this procedure would be bundled into the RVUs 
of the procedure requiring the pulse oximetry testing. Because pulse 
oximetry may be performed in conjunction with a variety of physician 
services, we propose to implement this in a budget-neutral manner by 
redistributing the current RVUs across all services.

H. RVUs for Doppler Echocardiography (CPT Code 93325)

    We are proposing to redistribute the RVUs assigned to CPT code 
93325 (Doppler color flow velocity mapping). In 1992, the procedure was 
classified as a technical component (TC) service only (without a 
professional component (PC)). As a result of the refinement process for 
physician work RVUs, for 1993 we assigned 0.07 physician work RVUs to 
the code, and we established a PC for the procedure. We redistributed 
slightly more than half of the practice expense and malpractice RVUs to 
the PC from the TC. As a result, the PC was assigned 0.07 work RVUs, 
1.44 practice expense RVUs, and 0.13 malpractice RVUs, and the TC was 
assigned 1.40 practice expense and 0.12 malpractice RVUs. While 
physicians and other entities billing for the complete or global 
services were unaffected by this change, physiological laboratories 
billing the TC saw their payments reduced by more than one-half. As a 
result of comments received, we propose to adjust the practice expense 
and malpractice RVUs as follows:

------------------------------------------------------------------------
                                    Practice                            
       Modifier          Work       expense       Malpractice     Total 
------------------------------------------------------------------------
-26...................     0.07            0.04            0.01     0.12
TC....................     0.00            2.79            0.24     3.03
Global................     0.07            2.83            0.25    3.15 
------------------------------------------------------------------------

    The practice expense and malpractice RVUs were determined by using 
practice expense data for cardiovascular disease specialists and 
extrapolating from the work RVUs using the methodology discussed in the 
November 1991 final rule (56 FR 59569).

I. Nuclear Medicine

    The American College of Nuclear Physicians and The Society of 
Nuclear Medicine have brought a matter to our attention involving 
certain nuclear medicine multiple diagnostic procedures. The issue was 
not previously addressed in our regulations or instructions. The 
organizations noted that most carriers are denying payment for one of 
the procedures when both are performed on the same day. They also 
believed that, for patients with certain malignancies, it is necessary 
to perform a whole body planar study before a SPECT study, both to 
determine if tomography is needed and to deduce the region to be 
selectively imaged. They proposed that the CPT modifier -51 for 
multiple procedures be used in these situations, which would result in 
full fee schedule payment for the procedure with the highest payment 
level and a 50-percent payment for the second procedure. The procedures 
in question follow:
     CPT code 78306 (Bone imaging; whole body) when followed by 
CPT code 78320 (Bone imaging; SPECT).
     CPT code 78802 (Radionuclide localization of tumor; whole 
body) when followed by CPT code 78803 (Tumor localization; SPECT).
     CPT code 78806 (Radionuclide localization of abscess; 
whole body) when followed by CPT code 78807 (Radionuclide localization 
of abscess; SPECT).
    We propose to implement the suggestion for the 1995 physician fee 
schedule.

J. End-Stage Renal Disease (ESRD)

1. Hospital Inpatient Dialysis on the Same Day as an Evaluation and 
Management Service
    Presently, under the physician fee schedule we pay for the 
physician services associated with dialysis (CPT codes 90935, 90937, 
90945, and 90947) in hospital inpatient settings. (In outpatient 
settings, these services are included in the monthly capitation fee 
(CPT codes 90918 through 90922).) Hospital inpatient dialysis is 
considered to be a global service; that is, a single fee is paid for 
all necessary services normally furnished with the procedure. Hospital 
inpatient dialysis has been assigned a 0-day global period. This means 
that payment is not made for a visit by the same physician on the same 
day that he or she bills the dialysis service unless the visit was not 
related to the treatment of the patient's ESRD and the service was not, 
and could not have been, furnished during the dialysis treatment.
    In general, for evaluation and management services furnished in 
hospital settings, only one evaluation and management service can be 
billed per day. This includes, for example, multiple hospital visits on 
the same day and a hospital visit and inpatient psychotherapy service. 
One of the few exceptions that existed was ventilation management; 
however, effective January 1, 1994, payment is not made for both 
ventilation management and a hospital visit on the same day as stated 
in the December 1993 final rule (58 FR 63640). We consider physician 
dialysis services to be an evaluation and management service and 
believe dialysis should be treated similarly to all other evaluation 
and management services. Like ventilation management, dialysis 
management consists of evaluating the patient, making medical 
decisions, and writing orders for therapy to be furnished by hospital 
staff. Therefore, we propose to pay for either an evaluation and 
management code or a dialysis code, but not both, on the same day. 
Thus, physicians would no longer be paid for dialysis in addition to an 
evaluation and management service, even if the evaluation and 
management service is billed under CPT modifier -25.
    In selecting the level of evaluation and management service to 
bill, physicians may, as indicated above, bill either the hospital 
visit or the dialysis service. Moreover, in selecting the level of the 
hospital visit that may be billed, the physician could consider the 
management of dialysis in determining the appropriate level of 
evaluation and management code. If it is appropriate, the physician may 
also bill the applicable prolonged service code in addition to the 
evaluation and management code. If a dialysis service and an evaluation 
and management service performed on the same day are both billed, the 
dialysis service may be paid, but the evaluation and management service 
will be rejected.
    We propose implementing the proposal in a budget neutral manner by 
redistributing the payment for an evaluation and management service 
performed on the same day as dialysis into the payment for the dialysis 
service. We would determine the current evaluation and management 
payment allowed when dialysis and evaluation and management are 
performed on the same day and make the appropriate adjustments to the 
work, practice expense, and malpractice RVUs to each of the four 
dialysis codes so that the payments remain budget neutral.
    The following example using CPT code 90935 illustrates the proposed 
methodology for increasing the work, practice expense, and malpractice 
RVUs:
     Determine the aggregate allowed amounts and allowed 
services for CPT code 90935 (hemodialysis with a single physician 
evaluation).
     Determine the aggregate allowed amounts for the evaluation 
and management services performed on the same day as CPT code 90935.
     Divide the aggregate allowed payment for CPT code 90935 
and evaluation and management services performed on the same day by the 
product of the sum of the national CF and the aggregate allowed 
services for CPT code 90935. This computation results in the increased 
total RVUs for CPT code 90935.
     Apportion the additional RVUs to the work, practice 
expense, and malpractice RVUs currently assigned to CPT code 90935 
based on the current RVU shares.
2. Payment for Outpatient ESRD-Related Services Under the Physician Fee 
Schedule
    a. Development of the monthly capitation payment (MCP). The MCP was 
implemented in 1983 in accordance with section 1881(b)(3) of the Act. 
It is a prospective, comprehensive, monthly payment for all outpatient 
ESRD-related physicians' services. The payment amount was originally 
set based on the most current reasonable charge data available (fiscal 
year (FY) 1981) for internists' office visits for established patients 
adjusted by a factor for home dialysis patients, reflecting the fact 
that physician effort for a home patient is 70 percent that of a 
facility patient. The payment amounts for the original MCP ranged from 
a minimum of $144 to a maximum of $220 reflecting the geographical 
variation in physicians' billing patterns. In 1985, the General 
Accounting Office (GAO) found that the relative physician effort for 
home dialysis patients should have been 26 percent of the effort for a 
patient dialyzed in a facility (GAO study GAO/HRD-85-14). Accordingly, 
in 1986, the MCP was reduced resulting in a current range of payment 
amounts from a minimum of $132 to a maximum of $203 and an average of 
approximately $180. These services are reported with CPT codes 90918 
through 90921.
    b. Proposed inclusion of the MCP under the physician fee schedule. 
We are proposing to include the MCP (CPT codes 90918 through 90921) 
under the physician fee schedule. Physicians' services are defined in 
section 1848(j)(3) of the Act as items and services described in, among 
other provisions, section 1861(s)(1). Those section 1861(s)(1) 
physicians' services include services furnished to beneficiaries with 
ESRD. However, at the inception of the fee schedule, we relied on the 
authority in section 1848(j)(3) to exclude these services from the fee 
schedule, in part because the authority to pay a comprehensive monthly 
rate for services to ESRD patients was derived from section 1881(b)(3).
    We now propose instead to include the physicians' monthly routine 
professional services furnished to ESRD patients in the fee schedule. 
We believe, and understand that the nephrologists agree, that payment 
for these services should be established in the same way as all other 
physicians' services.
    We are not proposing RVUs for these codes at this time. While the 
Harvard Phase I study assigned a work RVU of 1.60 RVUs to the service, 
concerns were expressed about the vignette used to survey the 
procedure. In light of these concerns and since RUC is currently 
reviewing the work for this service, we are not proposing an RVU now. 
Rather, we are requesting comments from nephrologists and other 
interested parties on the work RVU for this service and the basis for 
their recommendations. Commenters may consider the original Harvard 
RVU, the results of the RUC process, and any other information in 
making their recommendations. We plan to take these comments and the 
RVU proposed by RUC into account in establishing an interim final work 
RVU for the service for 1995. As with all interim RVUs, the RVU will be 
subject to comment and may be modified based on these comments for 
services furnished in 1996.
    We propose to base the practice expense and malpractice expense 
RVUs on current payment allowances by applying the nephrologists' 
practice expense shares to the current allowance. We would apply the 
nonsurgical update to these codes. The MCP is paid to physicians for 
physicians' services. Therefore, this change will have no impact on 
payments to ESRD facilities for facility services.

K. Services Considered To Be Medicare Part A Services

    Therapeutic apheresis (CPT code 36520) is included in the current 
fee schedule as a professional service with work RVUs. However, after 
further consideration, we do not believe this service requires 
physician work but rather that it is performed by the physician's 
staff. Moreover, because this procedure is usually performed in a 
hospital by hospital staff, payment is part of the Part A payment to 
the hospital. Therefore, we propose to remove the physician work RVUs 
for this code from the fee schedule and make this code an ``incident-
to'' service on the fee schedule. The practice expense and malpractice 
expense RVUs for CPT code 36520 were originally calculated on a 
historical charge basis. We recalculated those RVUs for the ``incident-
to'' code using the historical charges for this procedure. We propose 
to assign the following RVUs for this ``incident-to'' service: Practice 
expense--1.87; malpractice expense--0.12; total RVUs--1.99. Under this 
proposed rule, the code could be billed for the service only if it is 
performed in the office. The savings resulting from this proposal would 
be included in the budget-neutrality calculations for CY 1995.

III. Implementation of Omnibus Budget Reconciliation Act of 1993--
Payment for Antigens (Allergen Immunotherapy)

A. Background and Legislative Change

    Under allergen immunotherapy, patients with allergies are injected 
subcutaneously with extracts of the specific agents to which they are 
allergic. At the outset, small amounts are injected, but the dosage is 
gradually increased until a maintenance level is achieved and the 
patient is desensitized. The allergen extracts used for this therapy 
are called antigens.
    Medicare coverage for antigens prepared by a physician is 
established in section 1861(s)(2)(G) of the Act, and they are currently 
paid for under the reasonable charge payment method. Unlike many other 
services for which Medicare payment is made to physicians, antigens 
were not included within the scope of services paid under the Medicare 
physician fee schedule. This was changed by section 13518 of OBRA '93. 
Subject to the Secretary's discretion, that section made services 
covered under section 1861(s)(2)(G) of the Act--that is, antigens 
prepared by a physician--subject to the Medicare physician fee 
schedule. This change is effective for services furnished beginning 
January 1, 1995.
    In this proposed rule, we describe the RVUs and other policy 
provisions that we plan to implement in bringing antigens under the 
Medicare physician fee schedule.

B. CPT and HCPCS Codes

    There are five J codes (level 2 HCPCS codes) that represent 
antigens in the 1994 HCPCS. Those codes are:

------------------------------------------------------------------------
   HCPCS code                           Description                     
------------------------------------------------------------------------
J0220...........  Injection, allergy desensitization, aqueous           
                   preparation.                                         
J0230...........  Injection, allergy desensitization, Allpyral.         
J0240...........  Injection, allergy desensitization, emulsion not      
                   specified.                                           
J7010...........  Vial of allergy vaccine, single dose.                 
J7020...........  Vial of allergy vaccine, multiple dose.               
------------------------------------------------------------------------

    These codes are infrequently used and do not represent a 
significant number of Medicare-allowed charges. (In 1993, there were 
only about 380,000 allowed services, representing $2.3 million.) 
Instead of using these J codes, most physicians bill for antigens under 
appropriate CPT codes. We are proposing to eliminate the use of these 
antigen J codes, thereby requiring all physicians to bill under the CPT 
codes.
    To understand the antigen CPT codes and their use by allergists, we 
consulted with the Joint Council of Allergy and Immunology (JCAI). The 
JCAI is an organization of allergists and immunologists whose sponsors 
are the American Academy of Allergy and Immunology and the American 
College of Allergy and Immunology.
    Within the CPT codes there are currently three types of codes. The 
first type is the injection-only code. It does not include the extract 
or the preparation of the extract. CPT code 95115 represents a single 
injection, and CPT code 95117 represents multiple (that is, two or 
more) injections. Because they do not include antigen extract, these 
codes are already being paid under the Medicare physician fee schedule 
and have been paid in that manner since fee schedule payments began in 
January 1992.
    The second type of antigen code is the extract/extract preparation 
code. These codes represent the preparation of the antigen, the antigen 
extract itself, and the physician's assessment of the history and skin 
testing to determine which antigens to use, in which concentrations, 
and in what volumes. These codes include CPT code 95144 (single dose 
vials) and CPT code 95165 (multiple dose vials). However, for stinging 
insect venoms, the extract/extract preparation codes are the following:
     CPT code 95145, multiple dose vials for single venom.
     CPT code 95146, multiple dose vials for two venoms.
     CPT code 95147, multiple dose vials for three venoms.
     CPT code 95148, multiple dose vials for four venoms.
     CPT code 95149, multiple dose vials for five venoms.
    Also, a final extract/extract preparation CPT code is 95170 
(multiple dose vials of whole body extract of biting insect or other 
arthropod). For all of these codes, the biller is required to specify 
the number of doses for which he or she is billing. For the venom 
extracts, if a code represents more than one venom, when there is one 
dose of each venom furnished, that constitutes one overall dose for the 
code. In other words, in order for there to be one dose of a multiple 
venom code, there has to be one dose of each of the venoms.
    The third type of antigen code is the complete service code. These 
codes include the injection as well as the extract and the extract 
preparation. The complete service codes include:
     CPT code 95120, single injection, including extract. This 
code is equivalent to CPT code 95115 plus CPT code 95165 (one dose).
     CPT code 95125, multiple injections, including extract. 
This code is equivalent to CPT code 95117 plus CPT code 95165 (two 
doses). We have been advised that the complete CPT codes (95120 and 
95125) never equal the single dose vial CPT code 95144 plus CPT code 
95115 or CPT code 95117 because there are virtually no circumstances 
when an allergist who is administering an injection should be doing so 
from a single dose vial. Supposedly, all allergists administering the 
shots themselves do so from multiple dose vials. They mix and furnish 
single dose vials only for administration by some other physician and 
that other physician would be billing an injection-only code--either 
CPT code 95115 or 95117.)
     CPT code 95130, injection for single stinging insect 
venom. This code is equivalent to CPT code 95115 plus CPT code 95145 
(one dose of one venom).
     CPT code 95131, injections for two stinging insect venoms. 
This code is equivalent to CPT code 95117 plus CPT code 95146 (one dose 
each of two venoms--which is equal to one overall dose of code CPT code 
95146).
     CPT code 95132, injections for three stinging insect 
venoms. This code is equivalent to CPT code 95117 plus CPT code 95147 
(one dose each of three venoms--which is equal to one overall dose of 
CPT code 95147).
     CPT code 95133, injections for four stinging insect 
venoms. This code is equivalent to CPT code 95117 plus CPT code 95148 
(one dose each of four venoms--which is equal to one overall dose of 
CPT code 95148).
     CPT code 95134, injections for five stinging insect 
venoms. This code is equivalent to CPT code 95117 plus CPT code 95149 
(one dose each of five venoms--which is equal to one overall dose of 
CPT code 95149).
    The first two types of CPT code (that is, injection-only and 
extract/extract preparation) are frequently used in situations when the 
allergist who prepares and furnishes the extract does not perform the 
injection. In many cases, those injections may be furnished by primary 
care physicians to whom the allergist has sent the extract for a 
particular patient. In those instances, the injection code is billed by 
the primary care physician and the extract/extract preparation code is 
billed by the allergist. About 50 percent of allergists also use these 
two types of codes in tandem, rather than billing the complete service 
code. In other words, they bill separately for the two services that 
they furnish. The complete service codes are billed by the other half 
of the allergists when they furnish both the injection and the extract.
    We are proposing to no longer permit payment under the complete 
service codes. Although approximately half of the allergists are using 
these codes, we believe that it is virtually impossible to guarantee 
accurate payment under them. As has been recommended to us by JCAI, 
payment for the complete codes should be the same as payment for the 
equivalent component codes. However, in our judgment, that cannot be 
accomplished under the ``complete'' codes. For example, CPT code 95120 
is equivalent to CPT code 95115 plus CPT code 95165, one dose. Thus, we 
would recommend single or constant RVUs for CPT code 95120--equalling 
one injection and one dose of extract. Presumably, if on the same day 
an allergist provides a 10-dose vial to a patient and also gives one 
dose of it in one injection, the allergist could bill either CPT code 
95120 and CPT code 95165 (nine doses), or the allergist could bill CPT 
code 95115 (single injection) plus CPT code 95165 (10 doses). The 
payment result would be the same, but we believe that the first 
approach is too complicated and prone to errors on the part of both 
physicians and Medicare carriers. Similarly, we are not entirely 
convinced that no allergists furnishing injections would bill for CPT 
code 95144 (single dose vial of extract). Under our payment system, a 
complete service code must have a one per dose price. However, that is 
not possible if more than one option for furnishing the complete 
service is available and those options have different resource costs. 
If indeed an allergist does furnish and inject from a single dose vial, 
then the pricing of the complete service is not easily determined. The 
price for the complete service could be the sum of the injection plus a 
dose from a multiple dose vial or the sum of the injection plus a dose 
from a single dose vial. The permutations of what the complete codes 
could represent are numerous and, therefore, no single appropriate 
price could be established. Finally, we believe the terminology of CPT 
codes 95120 and 95125 is confusing and could lead some nonallergists to 
bill these codes if they provide allergenic extract furnished by an 
allergist who has also billed for the extract using CPT code 95144 or 
CPT code 95165. Therefore, we propose keeping billing and pricing 
simple by having only component billing and eliminating the use of the 
complete codes. Commenters recommending retaining the complete codes 
should address our concerns about establishing one fair price for each 
complete code (although the code might represent more than one means of 
delivering the service and those means have different resource costs).

C. Proposed RVUs

    We are proposing to accept the RVUs that have been recommended to 
us by JCAI. The JCAI recommendations include not only RVUs for the 
antigen codes, but also RVUs for the injection-only codes. The JCAI 
recommendations for the injection-only codes are slightly less than the 
1994 RVUs for those codes. The proposed RVUs are:

----------------------------------------------------------------------------------------------------------------
                                                                        Practice     Malpractice                
                      CPT Code                             Work         expense        expense         Total    
----------------------------------------------------------------------------------------------------------------
95115...............................................  .............  .37..........  .02..........  .39.         
95117...............................................  .............  .49..........  .02..........  .51.         
95144...............................................  .06/dose.....  .13/dose.....  .01/dose.....  .20/dose.    
95165...............................................  .06/dose.....  .10/dose.....  .01/dose.....  .17/dose.    
95145...............................................  .06/dose.....  .34/dose.....  .03/dose.....  .43/dose.    
95146...............................................  .06/dose.....  .62/dose.....  .03/dose.....  .71/dose.    
95147...............................................  .06/dose.....  .92/dose.....  .03/dose.....  1.01/dose.   
95148...............................................  .06/dose.....  .92/dose.....  .03/dose.....  1.01/dose.   
95149...............................................  .06/dose.....  1.15/dose....  .03/dose.....  1.24/dose.   
95170...............................................  .06/dose.....  .35/dose.....  .03/dose.....  .44/dose.    
----------------------------------------------------------------------------------------------------------------

D. Budget Neutrality

    Section 13518 of OBRA '93 requires that, in 1995, we spend the same 
for antigens under the fee schedule that we would have spent for them 
under the current payment system. Because of the variations in the 
current payment system, it is impossible to implement this budget 
neutrality requirement. Currently, there is wide variation in the way 
in which Medicare carriers pay for antigens. Some pay per dose. Some 
pay on the basis of volume, and still others pay on the basis of volume 
and concentration. There is no single reliable and uniform unit of 
service across all carriers. This means, therefore, that we are unable 
to precisely relate current frequencies to those that would occur under 
the fee schedule and, in the absence of doing so, we are unable to 
guarantee budget neutrality within the antigen category. We believe, 
however, that the allowances being proposed are reasonable, and we have 
no basis for concluding that they would result in either increased or 
decreased expenditures compared with the existing system.
    Since CPT codes 95115 and 95117 (injection-only) are currently paid 
under the physician fee schedule and since we propose changes in the 
allowances for these services, we are subjecting these RVU changes to 
the overall budget neutrality adjustment for fee schedule changes (that 
is, the $20 million threshold).

E. Transition

    Because of the wide variation in the carriers' current descriptions 
of antigen services, we are not proposing transition to the full fee 
schedule. Instead, antigen fee schedule payments would, from the 
outset, be based on the full fee schedule amount. In our judgment, it 
is appropriate to transition payments only when the units of service 
are the same, or at least roughly the same, under the old and new 
payment systems. In this way, one would be transitioning payments only, 
not the definitions of the services. Since we have no assurance that 
most carriers use the antigen definitions to be used under the fee 
schedule, we propose no transition from those prior carrier payment 
amounts.

IV. Change in the MVPS Calculation for FY 1996

    We propose changing the method for calculating the MVPS for FY 1996 
by expanding the medical and other health services in the performance 
standard to include clinical laboratory tests performed in hospital 
outpatient settings. Currently, the performance standard includes 
clinical laboratory services performed in physicians' offices and in 
independent laboratories.
    The MVPS, as defined in the December 29, 1989 notice (54 FR 53819), 
currently excludes clinical laboratory services furnished in hospital 
outpatient departments because the hospital cost reports related to 
these services were not readily available under data collection systems 
in place at the time. Because we now have the capacity to use this 
information, and because physicians are responsible for the volume and 
intensity of tests performed regardless of the setting, we propose to 
include clinical laboratory services furnished in hospital outpatient 
departments in the MVPS calculation beginning in FY 1996. The physician 
fee schedule update would, therefore, be affected by this change 
beginning CY 1998.

V. Changes to the Regulations

    In Sec. 410.152(b)(4), concerning payment under Part B, we would 
recognize that payment may be based on other payment methodologies (for 
example, the physician fee schedule) than simply on a reasonable change 
basis.
    In Sec. 414.2 (``Definitions''), we would add the definition of 
``antigens'' under the definition of ``physicians' services.''
    In Sec. 414.4 (``Fee schedule areas''), in paragraph (b), we would 
add Iowa as an additional statewide fee schedule area.
    We would add a new Sec. 414.39 (``Special rules for payment of care 
plan oversight'').
    In Sec. 414.314 (``Monthly capitation payment method''), we would 
revise paragraph (c) (``Determination of payment amount'') to indicate 
that the MCP is paid under the Medicare physician fee schedule 
described in part 414. We would also remove paragraph (d) 
(``Publication of payment amount'') of this section because the MCP 
rate would be published with all other physician services paid under 
the physician fee schedule.

VI. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.).

VII. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, 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, if we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

VIII. Regulatory Impact Analysis

A. Regulatory Flexibility Act

    We generally prepare a regulatory flexibility analysis that is 
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612) unless the Secretary certifies that a rule would not have 
a significant economic impact on a substantial number of small 
entities. For purposes of the RFA, all physicians are considered to be 
small entities.
    This proposed rule would not have a significant economic impact on 
a substantial number of small entities. Nevertheless, we are preparing 
a regulatory flexibility analysis because the provisions of this rule 
are expected to have varying effects on the distribution of Medicare 
physician payments across specialties and across geographic areas. We 
anticipate that virtually all of the approximately 500,000 physicians 
who furnish covered services to Medicare beneficiaries would be 
affected by one or more provisions of this rule. In addition, 
physicians who are paid by private insurers for non-Medicare services 
would be affected to the extent that they are paid by private insurers 
that choose to use the proposed RVUs. However, with few exceptions, we 
expect that the impact would be limited.
    If these proposals result in increases in Medicare payment amounts, 
beneficiary liability would also increase because the coinsurance 
amounts would increase. In addition, if nonparticipating physicians do 
not accept assignment, the amount that they may bill above the fee 
schedule amount would also increase because the limiting charge for the 
service would increase. If a proposal results in a decrease in Medicare 
payment amounts or the bundling of payment for one service into payment 
for another, beneficiary liability would decrease.
    With respect to the proposal to include the MCP under the Medicare 
physician fee schedule, we are unable to estimate the impact at this 
time because we are not proposing RVUs for the service.
    Section 1848(c)(2)(B) of the Act requires that adjustments to RVUs 
in a year may not cause the amount of expenditures for the year to 
differ by more than $20 million from the amount of expenditures that 
would have been made if these adjustments had not been made. If this 
threshold is exceeded, we make adjustments to the RVUs in order to 
preserve budget neutrality. The proposals discussed in sections B 
through F below would have no impact on total Medicare expenditures 
because the effects of these changes would be neutralized in the 
establishment of RVUs for 1995.
    In accordance with the provisions of Executive Order 12866, this 
proposed rule was reviewed by the Office of Management and Budget.

B. Effects of Implementing Proposed Changes to GPCIs

    The revised GPCIs would be implemented in a budget-neutral manner. 
They would not change the total national physician fee schedule 
payments that would have been made in 1995 had the current GPCIs been 
retained. The revised GPCIs would merely redistribute payments among 
fee schedule payment areas. The general geographic effects of this 
redistribution are set forth in Addendum D.
    The overall effect of the GPCI changes cannot be estimated by 
summing the effects of the work, practice expense, and malpractice 
changes. Merely summing the changes would result in an incorrect 
increase or decrease. The effects are not additive because each of the 
three GPCI components have different weights. A complete discussion, 
with examples, of the revised GPCIs can be found in section II.A.3. of 
this proposed rule.
    Again, we stress that the GPCIs measure relative cost differences 
among areas compared to the national average. The national average cost 
is represented by a value of about 1.0. (It is not exactly 1.0 because 
of budget-neutrality rescaling.) A revised GPCI showing a decrease from 
the current value does not necessarily mean that absolute costs of an 
individual physician or absolute costs in an area have decreased. 
Rather, it means that costs in that area have decreased compared to 
national average costs. In other words, national average costs 
increased more than did area costs.

C. Payment Area (Locality) Changes

    The change to convert Iowa to a statewide payment area effective 
January 1, 1995, would be made on a budget-neutral basis within the 
State. However, some modest redistribution in payments could occur 
within the State. From our past experience, redistribution of payments 
would flow from urban areas, which usually have had higher GPCIs before 
the change, to rural areas, which usually have had lower GPCIs before 
the change. We estimate this redistribution to be generally in the 
range of 1 to 3 percent. These estimates represent aggregate effects 
among the areas of the State. The effect on individual physicians would 
vary depending on factors such as the mix and volume of their services 
to Medicare beneficiaries.

D. Effects of Proposed Work RVUs for Carrier-Priced and Non-Medicare 
CPT Codes

    We are proposing to create RVUs for 11 CPT codes for services not 
covered by Medicare and for 60 codes for services that are currently 
carrier-priced. An example of a service not covered by Medicare is CPT 
code 92340 (fitting of monofocal spectacles, except for aphakia). In 
general, the services that are currently carrier-priced are rarely 
furnished to Medicare beneficiaries. An example of a carrier-priced 
service is CPT code 99431 (history and examination of the normal 
newborn infant). This effort would benefit State Medicaid programs and 
private insurers that base their payment, in whole or in part, on the 
Medicare physician fee schedule. We are not able to estimate the total 
national impact of the creation of these RVUs because we do not know 
the frequency of the use of RVUs by payers other than Medicare. Also, 
we do not know how third-party payments based on our RVUs would compare 
to the payments currently made by these payers.

E. Effects of Proposed Payment Policy Revisions

1. Separate Payment for Physician Care Plan Oversight Services
    We propose to pay for care plan oversight services for patients 
receiving HHA services that are covered by Medicare. We propose to 
establish a fee schedule payment amount based on 1.63 RVUs, which, by 
applying the nonsurgical CF, results in a monthly payment amount of 
approximately $54.
    Preliminary studies based on HHA utilization data indicate that 
payment for this service would be allowed for approximately 5.25 
million claims per year and would result in increased Medicare 
expenditures of approximately $210 million for 1995. Thus, we estimate 
that a reduction of approximately 0.7 percent in the RVUs for other 
services would be required to offset this amount to retain budget 
neutrality. We would consider this adjustment to be ``interim'' for 
three years, during which time we would monitor utilization of this 
service. If utilization is significantly higher than our estimate, we 
would make an additional adjustment to achieve budget neutrality.
    If we implement this policy, beneficiaries overall would not 
sustain any change in coinsurance amounts or out-of-pocket costs. 
Because we are making this a budget-neutral change, we would therefore 
be reducing the allowed fee for all other physician services in order 
to pay for care plan oversight. We estimate that the average HHA 
beneficiary would be liable for approximately $16 in coinsurance for 
care plan oversight services each year. Since an estimated 75 percent 
of beneficiaries have either Medigap policies or Medicaid coverage for 
the coinsurance amounts, only a limited number of beneficiaries would 
see any financial impact due to this change. Approximately 10 percent 
of beneficiaries receive services from nonparticipating physicians. 
These beneficiaries would be liable for any amount that exceeds the 
Medicare-approved amount up to the limiting charge for this service. We 
believe the additional monthly amount because of the limiting charge 
provision would be approximately $8. Any impact on physicians who do 
not furnish this service would result from our reducing the RVUs for 
other physician services to achieve budget neutrality.
2. Payment for Multiple Surgical Procedures
    We propose to revise our method of payment for multiple surgical 
procedures performed on the same patient on the same day by the same 
physician. We currently have three different sets of multiple surgery 
rules. We are not proposing to change the dermatology or endoscopy 
multiple surgery rules. We are proposing to revise only the standard 
multiple surgery rule that currently requires carriers to rank the 
procedures by payment amount and base payment on the highest priced 
procedure at the lesser of actual charges or 100 percent of the fee 
schedule amount; the second procedure at 50 percent; the third, fourth, 
and fifth procedures at 25 percent; and procedures subsequent to the 
fifth procedure ``by report'' based on documentation of the services 
furnished.
    We propose to revise the current standard multiple surgery policy 
to base payment to physicians on the lesser of actual charges or 100 
percent for the highest priced procedure, and the lesser of actual 
charges or 50 percent for the second through fifth procedures. 
Procedures performed subsequent to the fifth procedure would continue 
to be paid ``by report'' based on documentation of the services 
furnished. Under this proposed change, the standard multiple surgery 
policy would be the same as the current policy that applies to multiple 
dermatology procedures. This change in payment policy would simplify 
carrier payment procedures because we would have two, rather than 
three, multiple surgery policies.
    Preliminary studies of 1992 utilization and cost data indicate that 
this change to the 100/50/50/50/50 percent payment policy would result 
in increased Medicare payments of approximately $37 million, were it 
not for the budget-neutrality adjustment to all RVUs that we would make 
if we implement this change. Our preliminary estimate is that this 
change would require a reduction in all RVUs of about 0.1 percent. This 
estimate may change in the final rule based on a review of 1993 
utilization and the level of the updates for 1995.
    If we implement this proposal, beneficiary liability would increase 
because the coinsurance for the third through fifth services would 
increase. This would occur because physicians who perform multiple 
procedures that are now paid on the basis of the lesser of the actual 
charge or 25 percent of the fee schedule payment for the third through 
fifth procedures would be paid twice as much for the third through 
fifth procedures performed on the same day for a patient, and the 
coinsurance is a fixed percent of the amount Medicare pays. In 
addition, the amount that nonparticipating physicians may bill over the 
fee schedule amount if they do not accept assignment would also 
increase because the limiting charge is a percent of the fee schedule 
amount. However, beneficiary liability may be reduced slightly in the 
aggregate as a result of slightly lower payments for other services.
    Physicians who do not perform the surgical procedures to which this 
policy applies may have the RVUs for the services they perform slightly 
reduced as a result of this policy change.
3. Application of Site-of-Service Payment Differential
    We propose to revise the current list of surgical procedures 
subject to the site-of-service limitation using 1993 data. The revised 
list would be effective for services furnished beginning January 1, 
1995. To avoid any concern about the statistical validity of the data 
for low volume procedures, we would exclude any procedure performed 
less than 100 times a year unless the procedure is part of a ``family'' 
of codes that meets the requirements to be on the site-of-service list. 
We are proposing to add approximately 230 codes and remove 8 codes from 
the site-of-service list based on 1993 data and criteria. Were it not 
for budget-neutrality adjustments, we estimate that these additions 
would result in an $11.9 million reduction in Medicare payments.
4. Bundled Services
    The proposed bundling of the following services would mean that 
physicians who are currently billing for and receiving separate payment 
for the services would no longer do so.
    a. Generation and interpretation of automated data (CPT codes 78890 
and 78891). These two codes should be billed in addition to the primary 
procedure, but in CY 1992, CPT codes 78890 and 78891 were billed in 
combination with another procedure only 12.7 and 2.5 percent of the 
time, respectively. The data indicate that these codes are being 
reported incorrectly. We would implement the proposal to bundle these 
codes into the codes for the primary procedure in a budget-neutral 
manner by redistributing the RVUs currently assigned to CPT codes 78890 
and 78891 across all codes. The expenditure for these services in CY 
1992 was $1.6 million for approximately 38,000 services. The effect of 
this change on individual physicians would be minimal.
    b. Noninvasive ear or pulse oximetry (CPT code 94760). We propose 
that payment for this procedure be considered bundled into the RVUs of 
the procedure requiring the pulse oximetry testing. We would implement 
this proposal in a budget-neutral manner by redistributing the 0.27 
RVUs currently assigned to CPT code 94760 across all services. The 
expenditure for this procedure in CY 1992 was $5.3 million for 4 
million services. Since both the RVUs and the current frequency for 
code 94760 are small, any effect of redistributing the RVUs over all 
services would be minimal.
5. RVUs for Doppler Echocardiography (CPT Code 93325)
    We are proposing to redistribute the RVUs assigned to CPT code 
93325 (Doppler color flow velocity mapping). This procedure was 
originally classified as a TC service only, without a PC. As a result 
of the refinement process for 1993, we established a PC for the 
procedure primarily at the expense of the TC. While physicians and 
other entities billing for the complete or global services were 
unaffected by this change, physiological laboratories billing the TC 
saw their payments reduced by more than one-half.
    If adopted, this proposed rule would approximately double the fee 
schedule payment amount for the TC of CPT code 93325 when the service 
is furnished in nonhospital settings. Payment for the PC of the 
procedure in settings such as hospitals, in which the PC only is 
billed, would be reduced by over 90 percent. Global payments for 
procedures furnished in physicians' offices and other nonhospital 
settings would be unaffected by adoption of this proposed rule.
6. Nuclear Medicine
    It is our understanding that many carriers currently do not pay for 
the second procedure of certain nuclear medicine multiple diagnostic 
procedures. However, we believe that patients with certain malignancies 
may require multiple nuclear medicine diagnostic procedures. Under this 
proposal, carriers would pay the full fee schedule payment for the 
procedure with the highest payment and 50 percent for the second 
procedure. We believe that the overall effect of this proposal would be 
minimal. If there are carriers that currently pay in full for the 
second procedure, payments for these services would be reduced. 
Further, there would be a slight increase in payments by carriers that 
currently do not pay for the second procedure.
7. ESRD--Hospital Inpatient Dialysis on the Same Day as an Evaluation 
and Management Service
    We consider physician dialysis services to be an evaluation and 
management service and believe dialysis should be treated similarly to 
all other evaluation and management services. Therefore, we propose to 
pay for either an evaluation and management code or a physician 
dialysis code, but not both, when furnished on the same day. According 
to CY 1992 data, evaluation and management services were furnished on 
the same day as dialysis services approximately 263,500 times and 
allowed amounts for these services approximated $9.5 million. Our 
proposal would be implemented in a budget-neutral manner because the 
RVUs for the evaluation and management codes would be redistributed 
across the four dialysis codes. This change would increase payments for 
the four dialysis services.
8. Services Considered To Be Medicare Part A Services
    Therapeutic apheresis (CPT code 36520) is currently performed in 
the office setting 5.39 percent of the time, in the inpatient hospital 
setting 62.09 percent of the time, and in the outpatient hospital 
setting 30.47 percent of the time. In 1992, total expenditures for 
therapeutic apheresis in these settings were $1,904,036. By designating 
this service as an ``incident-to'' service and allowing payment only 
when the service is performed in the office setting, we estimate that 
an additional $1.8 million would be saved. These savings would be 
included in the budget neutrality calculations and, thus, redistributed 
among the other services under the fee schedule. We do not anticipate 
that this proposal would have an impact on hospitals.

F. Effects of Payment for Antigens (Allergen Immunotherapy)

    Effective for services furnished beginning January 1, 1995, we are 
proposing to eliminate the use of HCPCS antigen J codes and require all 
physicians to bill for allergy therapy services using the CPT codes 
described in detail in section III of this preamble. We are also 
proposing to no longer permit payment under the CPT allergy complete 
service codes that are used by approximately half of the allergists.
    Because of the variations in the current payment system, we are 
unable to precisely relate current frequencies to those that would 
occur under the fee schedule. Therefore, we are unable to ensure budget 
neutrality within the antigen category. We believe, however, that the 
allowances being proposed are reasonable and we have no basis for 
concluding that the RVUs would result in a significant change in 
expenditures compared with the existing system.

G. Change in the MVPS Calculation for FY 1996

    We believe that clinical laboratory services performed in hospital 
outpatient settings should be included in the MVPS beginning in FY 
1996. Under present law, these services would be included in the 
``other nonsurgical'' MVPS category. This proposal would affect the 
update beginning in CY 1998, which is based on the 1996 MVPS. Based on 
current assumptions, this change would result in estimated savings of 
$25 million in FY 1998, $75 million in FY 1999, and $125 million in FY 
2000.

H. Rural Hospital Impact Statement

    Section 1102(b) of the Act requires the Secretary to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 50 beds.
    This proposed rule would have little direct effect on payments to 
rural hospitals since this rule would change only payments made to 
physicians and certain other practitioners under Part B of the Medicare 
program and would make no change in payments to hospitals under Part A. 
We do not believe the changes would have a major, indirect effect on 
rural hospitals.
    Therefore, we are not preparing an analysis for section 1102(b) of 
the Act since we have determined, and the Secretary certifies, that 
this rule would not have a significant impact on the operations of a 
substantial number of small rural hospitals.

List of Subjects

42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 414

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

    42 CFR chapter IV would be amended as set forth below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

    A. Part 410 is amended as set forth below:
    1. The authority citation for part 410 continues to read as 
follows:

    Authority: Secs. 1102, 1832, 1833, 1834, 1835, 1861(r), (s), 
(aa), (cc), and (ff), 1871, and 1881 of the Social Security Act (42 
U.S.C. 1302, 1395k, 13951, 1395m, 1395n, 1395x(r), (s), (aa), (cc), 
and (ff), 1395hh, and 1395rr).

Subpart E--Payment of SMI Benefits

    2. In Sec. 410.152, the introductory text of paragraph (b) is 
republished and paragraph (b)(4) is revised to read as follows:


Sec. 410.152  Amounts of payment.

* * * * *
    (b) Basic rules for payment. Except as specified in paragraphs (c) 
through (h) of this section, Medicare Part B pays the following 
amounts:
* * * * *
    (4) For services furnished by a person or an entity other than 
those specified in paragraphs (b)(1) through (b)(3) of this section, 80 
percent of the reasonable charges or other payment basis for the 
services.
* * * * *

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

    B. Part 414 is amended as set forth below:

Subpart A--General Provisions

    1. The authority citation for part 414, subpart A continues to read 
as follows:

    Authority: 1102, 1832, 1833, 1834, 1842, 1848, 1861(b) and (s), 
1862, 1866, 1871, and 1881 of the Social Security Act as amended (42 
U.S.C. 1302, 1395k, 13951, 1395m, 1395u, 1395w-4, 1395x(b) and (s), 
1395y, 1395cc, 1395hh, and 1395rr).

    2. In Sec. 414.2, in the definition of ``Physicians' services'', a 
new paragraph (6) is added to read as follows:


Sec. 414.2  Definitions.

* * * * *
    Physicians' services * * *
    (6) Antigens, as described in section 1861(s)(2)(G) of the Act.
* * * * *
    3. In Sec. 414.4, paragraph (b) is revised to read as follows:


Sec. 414.4  Fee schedule areas.

* * * * *
    (b) Statewide areas. HCFA recognizes statewide fee schedule areas 
for Iowa, Minnesota, Nebraska, North Carolina, Ohio, and Oklahoma.
* * * * *
    4. A new Sec. 414.39 is added to read as follows:


Sec. 414.39  Special rules for payment of care plan oversight.

    (a) General. Except as specified in paragraph (b) of this section, 
payment for care plan oversight is included in payment for visits and 
other services under the physician fee schedule.
    (b) Exception. Separate payment is made under the following 
conditions for beneficiaries who receive HHA services that are covered 
by Medicare:
    (1) The care plan oversight services require recurrent physician 
supervision of therapy involving 30 or more minutes of the physician's 
time in a 30-day period.
    (2) Only one physician per patient may receive payment for a 30-day 
period. The physician must have furnished a service requiring a face-
to-face encounter with the patient at least once during the 6-month 
period before the month for which care plan oversight payment is first 
billed. The physician may not have a significant financial or 
contractual relationship with an HHA in accordance with Sec. 424.22(d).
    (3) Payment for care plan oversight during a global period of a 
surgery is made when the care plan oversight is documented to be 
unrelated to the surgery.
    5. In Sec. 414.314, paragraph (d) is removed and paragraph (c) is 
revised to read as follows:


Sec. 414.314  Monthly capitation payment method.

* * * * *
    (c) Determination of payment amount. The MCP is paid under the 
Medicare physician fee schedule described in this part 414.

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

    Dated: May 31, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Dated: June 15, 1994.
Donna E. Shalala,
Secretary.
    Note: The following addenda will not appear in the annual Code 
of Federal Regulations.

               Addendum A--1994 Geographic Practice Cost Indices by Medicare Carrier and Locality               
----------------------------------------------------------------------------------------------------------------
                               Locality                                                   Practice              
        Carrier No.              No.               Locality Name              Work        expense    Malpractice
----------------------------------------------------------------------------------------------------------------
510........................            5  Birmingham, AL.................        0.981        0.913        0.824
510........................            4  Mobile, AL.....................        0.964        0.911        0.824
510........................            2  North Central AL...............        0.970        0.867        0.824
510........................            1  Northwest AL...................        0.985        0.869        0.824
510........................            6  Rest of AL.....................        0.975        0.851        0.824
510........................            3  Southeast AL...................        0.972        0.869        0.824
1020.......................            1  Alaska.........................        1.106        1.255        1.042
1030.......................            5  Flagstaff (city), AZ...........        0.983        0.911        1.255
1030.......................            1  Phoenix, AZ....................        1.003        1.016        1.255
1030.......................            7  Prescott (city), AZ............        0.983        0.911        1.255
1030.......................           99  Rest of Arizona................        0.987        0.943        1.255
1030.......................            2  Tucson (city), AZ..............        0.987        0.989        1.255
1030.......................            8  Yuma (city), AZ................        0.983        0.911        1.255
520........................           13  Arkansas.......................        0.960        0.856        0.302
2050.......................           26  Anaheim-Santa Ana, CA..........        1.046        1.220        1.370
542........................           14  Bakersfield, CA................        1.028        1.050        1.370
542........................           11  Fresno/Madera, CA..............        1.006        1.009        1.370
542........................           13  Kings/Tulare, CA...............        0.999        1.001        1.370
2050.......................           18  Los Angeles, CA (1st of 8).....        1.060        1.196        1.370
2050.......................           19  Los Angeles, CA (2nd of 8).....        1.060        1.196        1.370
2050.......................           20  Los Angeles, CA (3rd of 8).....        1.060        1.196        1.370
2050.......................           21  Los Angeles, CA (4th of 8).....        1.060        1.196        1.370
2050.......................           22  Los Angeles, CA (5th of 8).....        1.060        1.196        1.370
2050.......................           23  Los Angeles, CA (6th of 8).....        1.060        1.196        1.370
2050.......................           24  Los Angeles, CA (7th of 8).....        1.060        1.196        1.370
2050.......................           25  Los Angeles, CA (8th of 8).....        1.060        1.196        1.370
542........................            3  Marin/Napa/Solano, CA..........        1.012        1.198        1.370
542........................           10  Merced/surr. cntys, CA.........        1.018        1.009        1.370
542........................           12  Monterey/Santa Cruz, CA........        1.023        1.108        1.370
542........................            1  N. coastal cntys, CA...........        1.003        1.072        1.370
542........................            2  NE rural CA....................        1.001        0.990        1.370
542........................            7  Oakland-Berkeley, CA...........        1.028        1.258        1.370
542........................           27  Riverside, CA..................        1.026        1.080        1.370
542........................            4  Sacramento/surr. cntys, CA.....        1.026        1.088        1.370
542........................           15  San Bernardino/E. cntrl CA.....        1.025        1.077        1.370
2050.......................           28  San Diego/Imperial, CA.........        1.026        1.090        1.370
542........................            5  San Francisco, CA..............        1.038        1.303        1.370
542........................            6  San Mateo, CA..................        1.038        1.303        1.370
2050.......................           16  Santa Barbara, CA..............        1.012        1.073        1.370
542........................            9  Santa Clara, CA................        1.048        1.286        1.370
542........................            8  Stockton/surr. cntys, CA.......        1.019        1.027        1.370
2050.......................           17  Ventura, CA....................        1.034        1.132        1.370
550........................            1  Colorado.......................        0.999        0.988        0.683
10230......................            4  Eastern CT.....................        0.999        1.053        1.036
10230......................            1  NW and N. central CT...........        1.002        1.071        1.025
10230......................            3  South central CT...............        1.018        1.103        1.188
10230......................            2  SW CT..........................        1.053        1.139        1.231
570........................            1  Delaware.......................        1.026        1.018        0.664
580........................            1  DC + MD/VA suburbs.............        1.059        1.168        0.947
590........................            3  Fort Lauderdale, FL............        0.993        0.981        1.376
590........................            4  Miami, FL......................        1.034        1.025        1.641
590........................            2  N/NC Florida cities............        0.975        0.932        1.108
590........................            1  Rest of Florida................        0.966        0.871        1.108
1040.......................            1  Atlanta, GA....................        0.975        1.022        0.752
1040.......................            4  Rest of Georgia................        0.956        0.841        0.752
1040.......................            2  Small GA cities 02.............        0.962        0.895        0.752
1040.......................            3  Small GA cities 03.............        0.961        0.869        0.752
1120.......................            1  Hawaii.........................        1.003        1.094        1.025
5130.......................           12  North Idaho....................        0.965        0.917        0.889
5130.......................           11  South Idaho....................        0.967        0.936        0.889
621........................           10  Champaign-Urbana, IL...........        0.965        0.920        1.137
621........................           16  Chicago, IL....................        1.044        1.114        1.773
621........................            3  De Kalb, IL....................        0.978        0.925        1.137
621........................           11  Decatur, IL....................        0.981        0.927        1.137
621........................           12  East St. Louis, IL.............        0.989        0.958        1.579
621........................            6  Kankakee, IL...................        0.972        0.925        1.137
621........................            8  Normal, IL.....................        0.997        0.968        1.137
621........................            1  Northwest, IL..................        0.974        0.896        1.137
621........................            5  Peoria, IL.....................        1.009        1.031        1.137
621........................            7  Quincy, IL.....................        0.974        0.896        1.137
621........................            4  Rock Island, IL................        0.995        0.958        1.137
621........................            2  Rockford, IL...................        1.010        1.018        1.137
621........................           13  Southeast IL...................        0.974        0.896        1.137
621........................           14  Southern IL....................        0.974        0.896        1.137
621........................            9  Springfield, IL................        0.996        0.966        1.137
621........................           15  Suburban Chicago, IL...........        1.020        1.097        1.137
630........................            1  Metropolitan Indiana...........        0.998        0.963        0.547
630........................            3  Rest of Indiana................        0.979        0.896        0.516
630........................            2  Urban Indiana..................        0.980        0.905        0.516
640........................            5  Des Moines (Polk/Warren), IA...        0.997        0.966        0.666
640........................            3  North Central Iowa.............        0.971        0.916        0.666
640........................            2  Northeast Iowa.................        0.972        0.918        0.666
640........................            6  Northwest Iowa.................        0.969        0.890        0.666
640........................            4  S. cen. IA (excl Des Moines)...        0.962        0.881        0.666
640........................            1  SE Iowa (incl Iowa City).......        0.976        0.933        0.666
640........................            7  Southwest Iowa.................        0.968        0.900        0.666
740........................            5  Kansas City, KS................        0.978        0.964        1.134
650........................            1  Rest of Kansas.................        0.953        0.893        1.134
740........................            4  Suburban Kansas City, KS.......        0.978        0.964        1.134
660........................            1  Lexington & Louisville, KY.....        0.984        0.917        0.667
660........................            3  Rest of Kentucky...............        0.974        0.875        0.667
660........................            2  Sm cities (city limits) KY.....        0.976        0.898        0.667
528........................            7  Alexandria, LA.................        0.985        0.889        0.808
528........................            3  Baton Rouge, LA................        0.991        0.966        0.808
528........................            6  Lafayette, LA..................        0.982        0.928        0.808
528........................            4  Lake Charles, LA...............        0.975        0.907        0.808
528........................            5  Monroe, LA.....................        0.979        0.880        0.808
528........................            1  New Orleans, LA................        0.994        1.003        1.185
528........................           50  Rest of Louisiana..............        0.972        0.880        0.824
528........................            2  Shreveport, LA.................        1.003        0.940        0.808
21200......................            2  Central Maine..................        0.942        0.903        0.716
21200......................            1  Northern Maine.................        0.947        0.912        0.716
21200......................            3  Southern Maine.................        0.956        0.980        0.716
690........................            1  Baltimore/surr. cntys, MD......        1.027        1.040        0.927
690........................            3  South + E. shore MD............        1.011        1.010        0.820
690........................            2  Western Maryland...............        1.006        1.013        0.843
700........................            2  Mass. suburbs/rural (cities)...        0.997        1.072        0.855
700........................            1  Massachusetts urban............        1.002        1.131        0.855
710........................            1  Detroit, MI....................        1.059        1.091        1.736
710........................            2  Michigan, not Detroit..........        1.010        0.971        1.196
720........................           00  Minnesota (blue shield)........        0.999        0.971        0.748
10240......................           00  Minnesota (travelers)..........        0.999        0.971        0.748
10250......................            1  Rest of Mississippi............        0.960        0.838        0.650
10250......................            2  Urban MS (city limits).........        0.966        0.902        0.650
740........................            3  K.C. (Jackson county), MO......        0.978        0.964        1.179
740........................            2  N. K.C. (Clay/Platte), MO......        0.978        0.964        1.179
11260......................            3  Rest of MO.....................        0.950        0.847        1.179
740........................            6  Rural NW counties, MO..........        0.953        0.866        1.179
11260......................            2  Sm. E. cities, MO..............        0.954        0.838        1.179
740........................            1  St. Joseph, MO.................        0.950        0.867        1.179
11260......................            1  St. Louis/lg. E. cities, MO....        0.988        0.964        1.352
751........................            1  Montana........................        0.967        0.926        0.718
655........................           00  Nebraska.......................        0.960        0.883        0.435
1290.......................            3  Elko & Ely (cities), NV........        0.984        1.026        1.144
1290.......................            1  Las Vegas, et al (cities), NV..        1.036        1.082        1.144
1290.......................            2  Reno, et al (cities), NV.......        1.008        1.141        1.144
1290.......................           99  Rest of Nevada.................        1.020        1.079        1.144
780........................           40  New Hampshire..................        0.962        1.011        0.602
860........................            2  Middle New Jersey..............        1.034        1.070        1.153
860........................            1  Northern New Jersey............        1.040        1.131        1.153
860........................            3  Southern New Jersey............        1.016        1.030        1.153
1360.......................            5  New Mexico.....................        0.981        0.925        0.767
801........................            1  Buffalo/surr. cntys, NY........        1.006        0.942        0.963
803........................            1  Manhattan, NY..................        1.059        1.255        1.647
801........................            3  N. central cities, NY..........        0.997        0.952        0.963
803........................            2  NYC suburbs/Long Is., NY.......        1.060        1.229        1.929
803........................            3  Poughkpsie/N. NYC suburbs......        1.004        1.018        1.325
14330......................            4  Queens, NY.....................        1.059        1.255        1.861
801........................            2  Rochester/surr. cntys, NY......        1.021        1.017        0.963
801........................            4  Rest of New York...............        0.988        0.935        0.963
5535.......................           00  North Carolina.................        0.968        0.902        0.378
820........................            1  North Dakota...................        0.965        0.895        0.688
16360......................           00  Ohio...........................        0.993        0.951        0.920
1370.......................           00  Oklahoma.......................        0.969        0.911        0.516
1380.......................            2  Eugene, et al (cities), OR.....        0.968        1.008        0.951
1380.......................            1  Portland, et al (cities), OR...        0.993        1.033        0.951
1380.......................           99  Rest of Oregon.................        0.979        0.997        0.951
1380.......................            3  Salem, et al (cities), OR......        0.974        0.990        0.951
1380.......................           12  SW OR. cities (city limits)....        0.974        0.988        0.951
865........................            2  Lg. Pennsylvania cities........        1.008        1.001        1.440
865........................            1  Philly/Pitt med schs/hosps.....        1.014        1.014        1.552
865........................            4  Rest of Pennsylvania...........        0.975        0.929        0.986
865........................            3  Small Pennsylvania cities......        0.984        0.945        0.986
973........................           20  Puerto Rico....................        0.882        0.763        0.466
870........................            1  Rhode Island...................        1.009        0.998        0.734
880........................            1  South Carolina.................        0.971        0.874        0.448
820........................            2  South Dakota...................        0.951        0.857        0.688
5440.......................           35  Tennessee......................        0.969        0.896        0.407
900........................           29  Abilene, TX....................        0.971        0.888        0.504
900........................           26  Amarillo, TX...................        0.972        0.900        0.504
900........................           31  Austin, TX.....................        0.969        0.968        0.504
900........................           20  Beaumont, TX...................        0.998        0.955        0.504
900........................            9  Brazoria, TX...................        1.025        0.955        0.504
900........................           10  Brownsville, TX................        0.980        0.888        0.504
900........................           24  Corpus Christi, TX.............        0.976        0.944        0.504
900........................           11  Dallas, TX.....................        0.996        0.971        0.504
900........................           12  Denton, TX.....................        0.996        0.971        0.504
900........................           14  El Paso, TX....................        0.995        0.894        0.504
900........................           28  Fort Worth, TX.................        0.973        0.936        0.504
900........................           15  Galveston, TX..................        0.982        0.968        0.504
900........................           16  Grayson, TX....................        0.964        0.903        0.504
900........................           18  Houston, TX....................        1.014        0.982        0.656
900........................           33  Laredo, TX.....................        0.968        0.856        0.504
900........................           17  Longview, TX...................        0.968        0.929        0.504
900........................           21  Lubbock, TX....................        0.950        0.881        0.504
900........................           19  McAllen, TX....................        0.945        0.873        0.504
900........................           23  Midland, TX....................        1.023        0.998        0.504
900........................            2  Northeast rural Texas..........        0.968        0.883        0.504
900........................           13  Odessa, TX.....................        1.008        0.971        0.504
900........................           25  Orange, TX.....................        0.998        0.955        0.504
900........................           30  San Angelo, TX.................        0.954        0.902        0.504
900........................            7  San Antonio, TX................        0.973        0.929        0.504
900........................            3  Southeast rural Texas..........        0.973        0.895        0.504
900........................            6  Temple, TX.....................        0.969        0.886        0.504
900........................            8  Texarkana, TX..................        0.953        0.883        0.504
900........................           27  Tyler, TX......................        0.984        0.931        0.504
900........................           32  Victoria, TX...................        0.976        0.973        0.504
900........................           22  Waco, TX.......................        0.981        0.871        0.504
900........................            4  Western rural Texas............        0.961        0.852        0.504
900........................           34  Wichita Falls, TX..............        0.969        0.896        0.504
910........................            9  Utah...........................        0.993        0.952        0.739
780........................           50  Vermont........................        0.942        0.941        0.533
10490......................            1  Richmond + Charlottesvl, VA....        0.975        0.953        0.462
10490......................            4  Rest of Virginia...............        0.967        0.888        0.522
10490......................            3  Sm. town/industrial VA.........        0.971        0.892        0.531
10490......................            2  Tidewater + n. VA counties.....        0.989        0.994        0.703
973........................           50  Virgin Islands.................        1.000        1.000        1.000
1390.......................            2  Seattle (King cnty), WA........        1.019        1.049        1.064
1390.......................            3  Spokane + Richlnd (cities), WA.        0.996        0.995        1.064
1390.......................            1  W + SE WA (excl Seattle).......        1.008        0.992        1.064
16510......................           16  Charleston, WV.................        0.987        0.962        0.688
16510......................           18  Eastern valley, WV.............        0.962        0.881        0.688
16510......................           19  Ohio River valley, WV..........        0.962        0.881        0.688
16510......................           20  Southern valley, WV............        0.960        0.876        0.688
16510......................           17  Wheeling, WV...................        0.975        0.900        0.688
951........................           13  Central Wisconsin..............        0.960        0.888        0.762
951........................           40  Green Bay, WI (northeast)......        0.979        0.913        0.762
951........................           54  Janesville, WI (s-central).....        0.970        0.905        0.762
951........................           19  La Crosse, WI (w-central)......        0.976        0.919        0.762
951........................           15  Madison, WI (Dane county)......        0.977        0.979        0.762
951........................           46  Milwaukee suburbs, WI (SE).....        1.010        1.008        0.762
951........................            4  Milwaukee, WI..................        1.008        1.009        0.762
951........................           12  Northwest Wisconsin............        0.966        0.898        0.762
951........................           60  Oshkosh, WI (E-central)........        0.974        0.911        0.762
951........................           14  Southwest Wisconsin............        0.960        0.888        0.762
951........................           36  Wausau, WI (N-central).........        0.971        0.898        0.762
825........................           21  Wyoming........................        0.988        0.938        0.641
----------------------------------------------------------------------------------------------------------------
Note: Work GPCI is the \1/4\ work GPCI required by Section 1848(e)(1)(A)(iii) of the Social Security Act.       


               Addendum B--1996 Geographic Practice Cost Indices by Medicare Carrier and Locality               
----------------------------------------------------------------------------------------------------------------
                               Locality                                                   Practice              
        Carrier No.              No.               Locality name               Work       expense    Malpractice
----------------------------------------------------------------------------------------------------------------
00510......................           05  Birmingham, AL.................        0.994        0.912        0.927
00510......................           04  Mobile, AL.....................        0.975        0.858        0.927
00510......................           02  North Central AL...............        0.973        0.850        0.927
00510......................           01  Northwest AL...................        0.990        0.873        0.927
00510......................           06  Rest Of AL.....................        0.964        0.818        0.927
00510......................           03  Southeast AL...................        0.970        0.858        0.927
01020......................           01  Alaska.........................        1.064        1.155        1.617
01030......................           05  Flagstaff, AZ..................        0.971        0.936        1.321
01030......................           01  Phoenix, AZ....................        1.004        0.963        1.321
01030......................           07  Prescott, AZ...................        0.971        0.912        1.321
01030......................           99  Rest Of AZ.....................        0.989        0.948        1.321
01030......................           02  Tucson, AZ.....................        0.978        0.942        1.321
01030......................           08  Yuma, AZ.......................        0.984        0.925        1.321
00520......................           13  Arkansas.......................        0.954        0.853        0.427
02050......................           26  Anaheim/Santa Ana, CA..........        1.037        1.205        0.752
00542......................           14  Bakersfield, CA................        1.023        0.992        0.686
00542......................           11  Fresno/Madera, CA..............        1.000        0.977        0.596
00542......................           13  Kings/Tulare, CA...............        0.987        0.954        0.596
02050......................           18  Los Angeles (1St Of 8).........        1.056        1.207        0.752
02050......................           19  Los Angeles (2Nd Of 8).........        1.056        1.207        0.752
02050......................           20  Los Angeles (3Rd Of 8).........        1.056        1.207        0.752
02050......................           21  Los Angeles (4Th Of 8).........        1.056        1.207        0.752
02050......................           22  Los Angeles (5Th Of 8).........        1.056        1.207        0.752
02050......................           23  Los Angeles (6Th Of 8).........        1.056        1.207        0.752
02050......................           24  Los Angeles (7Th Of 8).........        1.056        1.207        0.752
02050......................           25  Los Angeles (8Th Of 8).........        1.056        1.207        0.752
00542......................           03  Marin/Napa/Solano, CA..........        1.015        1.180        0.596
00542......................           10  Merced/Surr.Cntys, CA..........        1.002        0.988        0.596
00542......................           12  Monterey/Santa Cruz, CA........        1.008        1.143        0.596
00542......................           01  N. Coastal Cntys, CA...........        1.003        1.090        0.596
00542......................           02  Ne Rural, CA...................        0.982        0.953        0.596
00542......................           07  Oakland/Berkley, CA............        1.042        1.215        0.596
00542......................           27  Riverside, CA..................        1.011        1.059        0.667
00542......................           04  Sacramento/Surr. Cntys, CA.....        1.020        1.069        0.596
00542......................           15  San Bernadino/E.Ctrl Cntys CA..        1.015        1.056        0.749
02050......................           28  San Diego/Imperial, CA.........        1.017        1.077        0.618
00542......................           05  San Francisco, CA..............        1.068        1.330        0.596
00542......................           06  San Mateo, CA..................        1.049        1.300        0.596
02050......................           16  Santa Barbara, CA..............        1.016        1.119        0.686
00542......................           09  Santa Clara, CA................        1.064        1.289        0.596
00542......................           08  Stockton/Surr. Cntys, CA.......        1.001        1.041        0.596
02050......................           17  Ventura, CA....................        1.028        1.192        0.686
00550......................           01  Colorado.......................        0.989        0.951        0.827
10230......................           04  Eastern CT.....................        1.033        1.132        1.001
10230......................           01  Nw And N. Cntrl CT.............        1.049        1.159        1.001
10230......................           03  S. Cntrl CT....................        1.056        1.226        1.001
10230......................           02  Sw CT..........................        1.055        1.275        1.001
00570......................           01  Delaware.......................        1.021        1.032        0.792
00580......................           01  DC+MD/VA Suburbs...............        1.051        1.192        0.980
00590......................           03  Fort Lauderdale, FL............        0.998        1.036        1.867
00590......................           04  Miami, FL......................        1.016        1.087        2.456
00590......................           02  N/Nc FL Cities.................        0.978        0.952        1.417
00590......................           01  Rest Of Florida................        0.971        0.914        1.417
01040......................           01  Atlanta, GA....................        1.007        1.030        0.902
01040......................           04  Rest Of GA.....................        0.965        0.856        0.902
01040......................           02  Small GA Cities 02.............        0.981        0.917        0.902
01040......................           03  Small GA Cities 03.............        0.966        0.884        0.902
01120......................           01  Hawaii/Guam....................        0.999        1.220        0.921
05130......................           12  North Idaho....................        0.957        0.864        0.588
05130......................           11  South Idaho....................        0.963        0.887        0.588
00621......................           10  Champaign-Urbana, IL...........        0.952        0.884        1.008
00621......................           16  Chicago, IL....................        1.028        1.080        1.382
00621......................           03  De Kalb, IL....................        0.953        0.873        0.780
00621......................           11  Decatur, IL....................        0.962        0.864        0.880
00621......................           12  East St. Louis, IL.............        0.988        0.929        1.202
00621......................           06  Kankakee, IL...................        0.959        0.881        0.901
00621......................           08  Normal, IL.....................        0.969        0.893        0.731
00621......................           01  Northwest, IL..................        0.951        0.842        0.731
00621......................           05  Peoria, IL.....................        0.980        0.906        0.731
00621......................           07  Quincy, IL.....................        0.946        0.824        0.731
00621......................           04  Rock Island, IL................        0.972        0.858        0.731
00621......................           02  Rockford, IL...................        0.978        0.941        0.813
00621......................           13  Southeast IL...................        0.946        0.814        0.731
00621......................           14  Southern IL....................        0.946        0.822        0.822
00621......................           09  Springfield, IL................        0.981        0.936        0.946
00621......................           15  Suburban Chicago, IL...........        1.007        1.093        1.159
00630......................           01  Metropolitan IN................        0.989        0.937        0.363
00630......................           03  Rest Of IN.....................        0.973        0.872        0.346
00630......................           02  Urban IN.......................        0.974        0.896        0.346
00640......................           05  Des Moines (Polk/Warren), IA...        0.980        0.941        0.679
00640......................           03  North Central Iowa.............        0.956        0.845        0.679
00640......................           02  Northeast Iowa.................        0.964        0.873        0.679
00640......................           06  Northwest Iowa.................        0.947        0.846        0.679
00640......................           04  S Cntrl Ia (Excl. Des Moines)..        0.941        0.837        0.679
00640......................           01  Southeast Iowa.................        0.963        0.892        0.679
00640......................           07  Southwest Iowa.................        0.953        0.860        0.679
00740......................           05  Kansas City, Kansas............        0.989        0.949        1.191
00650......................           01  Rest Of Kansas.................        0.958        0.877        1.191
00740......................           04  Suburban Kansas City, Kansas...        0.989        0.949        1.191
00660......................           01  Lexington & Louisville, KY.....        0.989        0.904        0.819
00660......................           03  Rest Of Kentucky...............        0.957        0.821        0.819
00660......................           02  Sm Cities (City Limits) KY.....        0.960        0.850        0.819
00528......................           07  Alexandria, LA.................        0.958        0.864        0.911
00528......................           03  Baton Rouge, LA................        0.984        0.894        0.911
00528......................           06  Lafayette, LA..................        0.971        0.857        0.911
00528......................           04  Lake Charles, LA...............        0.974        0.901        0.911
00528......................           05  Monroe, LA.....................        0.958        0.867        0.911
00528......................           01  New Orleans, LA................        0.999        0.946        0.997
00528......................           50  Rest Of LA.....................        0.965        0.850        0.913
00528......................           02  Shreveport, LA.................        0.971        0.889        0.911
21200......................           02  Central Maine..................        0.961        0.929        0.759
21200......................           01  Northern Maine.................        0.964        0.920        0.759
21200......................           03  Southern Maine.................        0.980        1.034        0.759
00690......................           01  Baltimore/Surr. Cntys, MD......        1.021        1.036        1.115
00690......................           03  South & E. Shore MD............        0.985        0.972        0.862
00690......................           02  Western MD.....................        0.982        0.930        0.862
00700......................           02  MA Suburbs/Rural Cities........        1.015        1.101        0.978
00700......................           01  Urban MA.......................        1.030        1.167        0.978
00710......................           01  Detroit, MI....................        1.043        1.038        3.051
00710......................           02  Michigan, Not Detroit..........        0.998        0.935        1.844
00720......................           00  Minnesota (Blue Shield)........        0.990        0.965        0.594
10240......................           00  Minnesota (Travelers)..........        0.990        0.965        0.594
10250......................           01  Rest Of Mississippi............        0.950        0.813        0.726
10250......................           02  Urban Mississippi..............        0.964        0.868        0.726
00740......................           03  K.C. (Jackson Cnty), MO........        0.989        0.949        1.207
00740......................           02  N K.C. (Clay/Platte), MO.......        0.989        0.949        1.204
11260......................           03  Rest Of MO.....................        0.944        0.810        1.159
00740......................           06  Rural Nw Counties, MO..........        0.950        0.835        1.159
11260......................           02  Sm E. Cities, MO...............        0.940        0.809        1.159
00740......................           01  St Joseph, MO..................        0.952        0.850        1.159
11260......................           01  St. Louis/Lg E. Cities, MO.....        0.983        0.921        1.193
00751......................           01  Montana........................        0.952        0.864        0.756
00655......................           00  Nebraska.......................        0.951        0.872        0.444
01290......................           03  Elko & Ely (Cities), NV........        0.984        0.986        0.887
01290......................           01  Las Vegas, Et Al. (Cities), NV.        1.012        1.022        0.887
01290......................           02  Reno, Et Al. (Cities), NV......        0.997        1.049        0.887
01290......................           99  Rest Of Nevada.................        0.997        1.013        0.887
00780......................           40  New Hampshire..................        0.988        1.034        0.916
00860......................           02  Middle NJ......................        1.032        1.137        0.762
00860......................           01  Northern NJ....................        1.059        1.215        0.762
00860......................           03  Southern NJ....................        1.024        1.082        0.762
01360......................           05  New Mexico.....................        0.975        0.903        0.792
00801......................           01  Buffalo/Surr. Cntys, NY........        1.003        0.936        0.821
00803......................           01  Manhattan, NY..................        1.095        1.359        1.546
00801......................           03  N. Central Cities, NY..........        1.005        0.967        0.821
00803......................           02  Nyc Suburbs/Long I., NY........        1.068        1.235        1.759
00803......................           03  Poughkpsie/N Nyc Suburbs NY....        1.011        1.081        1.218
14330......................           04  Queens, NY.....................        1.058        1.240        1.686
00801......................           04  Rest Of New York...............        0.989        0.937        0.821
00801......................           02  Rochester/Surr. Cntys, NY......        1.012        0.992        0.821
05535......................           00  North Carolina.................        0.971        0.918        0.435
00820......................           01  North Dakota...................        0.951        0.860        0.617
16360......................           00  Ohio...........................        0.991        0.940        1.049
01370......................           00  Oklahoma.......................        0.970        0.882        0.481
01380......................           02  Eugene, Et Al. (Cities), OR....        0.959        0.938        0.637
01380......................           01  Portland, Et Al. (Cities), OR..        0.997        1.000        0.637
01380......................           99  Rest Of Oregon.................        0.962        0.907        0.637
01380......................           03  Salem, Et Al. (Cities), OR.....        0.965        0.929        0.637
01380......................           12  Sw OR Cities (City Limits).....        0.967        0.954        0.637
00865......................           02  Lg PA Cities...................        1.006        1.002        0.936
00865......................           01  Philly/Pitt Med Shcls/Hosps. PA        1.027        1.040        1.213
00865......................           04  Rest Of PA.....................        0.973        0.899        0.719
00865......................           03  Sm PA Cities...................        0.983        0.917        0.736
00973......................           20  Puerto Rico....................        0.883        0.739        0.268
00870......................           01  Rhode Island...................        1.019        1.074        1.569
00880......................           01  South Carolina.................        0.976        0.899        0.361
00820......................           02  South Dakota...................        0.936        0.856        0.443
05440......................           35  Tennessee......................        0.976        0.899        0.524
00900......................           29  Abilene, TX....................        0.960        0.851        0.827
00900......................           26  Amarillo, TX...................        0.975        0.883        0.827
00900......................           31  Austin, TX.....................        0.987        0.986        0.827
00900......................           20  Beaumont, TX...................        0.993        0.893        1.428
00900......................           09  Brazoria, TX...................        0.993        0.966        1.428
00900......................           10  Brownsville, TX................        0.955        0.848        0.827
00900......................           24  Corpus Christi, TX.............        0.983        0.898        0.827
00900......................           11  Dallas, TX.....................        1.012        1.012        0.893
00900......................           12  Denton, TX.....................        0.968        0.952        0.827
00900......................           14  El Paso, TX....................        0.973        0.893        0.893
00900......................           28  Fort Worth, TX.................        0.989        0.972        0.893
00900......................           15  Galveston, TX..................        0.989        0.966        1.428
00900......................           16  Grayson, TX....................        0.959        0.874        0.827
00900......................           18  Houston, TX....................        1.021        1.005        1.428
00900......................           33  Laredo, TX.....................        0.957        0.851        0.827
00900......................           17  Longview, TX...................        0.973        0.863        0.827
00900......................           21  Lubbock, TX....................        0.955        0.894        0.827
00900......................           19  Mc Allen, TX...................        0.961        0.837        0.827
00900......................           23  Midland, TX....................        0.991        0.900        0.827
00900......................           02  Northeast Rural TX.............        0.960        0.857        0.827
00900......................           13  Odessa, TX.....................        0.991        0.900        0.827
00900......................           25  Orange, TX.....................        0.993        0.893        0.827
00900......................           30  San Angelo, TX.................        0.948        0.844        0.827
00900......................           07  San Antonio, TX................        0.978        0.926        0.827
00900......................           03  Southeast Rural TX.............        0.963        0.872        0.889
00900......................           06  Temple, TX.....................        0.968        0.884        0.827
00900......................           08  Texarkana, TX..................        0.955        0.872        0.827
00900......................           27  Tyler, TX......................        0.971        0.894        0.827
00900......................           32  Victoria, TX...................        0.983        0.868        0.827
00900......................           22  Waco, TX.......................        0.966        0.877        0.827
00900......................           04  Western TX.....................        0.956        0.818        0.827
00900......................           34  Wichita Falls, TX..............        0.950        0.857        0.827
00910......................           09  Utah...........................        0.978        0.891        0.644
00780......................           50  Vermont........................        0.974        0.988        0.452
00973......................           50  Virgin Islands.................        0.966        0.978        1.023
10490......................           04  Rest Of VA.....................        0.976        0.876        0.504
10490......................           01  Richmond & Charlottesville, VA.        1.004        0.991        0.511
10490......................           03  Sm Town/Industrial VA..........        0.974        0.897        0.517
10490......................           02  Tidewater & N VA Cntys.........        0.990        0.965        0.530
01390......................           03  E Cntrl & Ne WA................        0.985        0.943        0.748
01390......................           02  Seattle (King Cnty), WA........        1.006        1.077        0.748
01390......................           01  W & Se WA (Excl Seattle).......        0.982        0.968        0.748
16510......................           16  Charleston, WV.................        0.980        0.881        1.004
16510......................           18  Eastern Valley, WV.............        0.960        0.899        1.004
16510......................           19  Ohio River Valley, WV..........        0.959        0.833        1.004
16510......................           20  Southern Valley, WV............        0.952        0.815        1.004
16510......................           17  Wheeling, WV...................        0.957        0.840        1.004
00951......................           13  Central WI.....................        0.959        0.849        1.160
00951......................           40  Green Bay (Northeast), WI......        0.976        0.894        1.160
00951......................           54  Janesville (S Cntrl), WI.......        0.966        0.895        1.160
00951......................           19  La Crosse (W Cntrl), WI........        0.972        0.879        1.160
00951......................           15  Madison (Dane Cnty), WI........        0.990        1.000        1.160
00951......................           46  Milwaukee Surburbs (Se), WI....        0.990        0.959        1.160
00951......................           04  Milwaukee, WI..................        1.001        0.978        1.160
00951......................           12  Northwest WI...................        0.961        0.850        1.160
00951......................           60  Oshkosh (E Cntrl), WI..........        0.973        0.886        1.160
00951......................           14  Southwest WI...................        0.959        0.850        1.160
00951......................           36  Wausau (N Cntrl), WI...........        0.962        0.866        1.160
00825......................           21  Wyoming........................        0.968        0.881        0.811
----------------------------------------------------------------------------------------------------------------
Note: Work GPCI is the \1/4\ work GPCI required by Section 1848(e)(1)(A)(iii) of the Social Security Act.       
GPCIs rescaled by the following factors to assure budget neutrality: Work=1.00074; Practice expense=1.00125;    
  Malpractice=1.02307.                                                                                          


               Addendum C--1995 Geographic Practice Cost Indices by Medicare Carrier and Locality               
----------------------------------------------------------------------------------------------------------------
                               Locality                                                   Practice   Malpractice
        Carrier No.              No.               Locality name              Work        expense               
----------------------------------------------------------------------------------------------------------------
00510......................           05  Birmingham, AL.................        0.988        0.912        0.876
00510......................           04  Mobile, AL.....................        0.970        0.884        0.876
00510......................           02  North Central AL...............        0.972        0.858        0.876
00510......................           01  Northwest AL...................        0.988        0.871        0.876
00510......................           06  Rest Of AL.....................        0.970        0.834        0.876
00510......................           03  Southeast AL...................        0.971        0.864        0.876
01020......................           01  Alaska.........................        1.085        1.205        1.330
01030......................           05  Flagstaff, AZ..................        0.977        0.924        1.288
01030......................           01  Phoenix, AZ....................        1.004        0.990        1.288
01030......................           07  Prescott, AZ...................        0.977        0.912        1.288
01030......................           99  Rest Of AZ.....................        0.988        0.946        1.288
01030......................           02  Tucson, AZ.....................        0.982        0.966        1.288
01030......................           08  Yuma, AZ.......................        0.984        0.918        1.288
00520......................           13  Arkansas.......................        0.957        0.854        0.364
02050......................           26  Anaheim/Santa Ana, CA..........        1.042        1.212        1.061
00542......................           14  Bakersfield, CA................        1.026        1.021        1.028
00542......................           11  Fresno/Madera, CA..............        1.003        0.993        0.983
00542......................           13  Kings/Tulare, CA...............        0.993        0.978        0.983
02050......................           18  Los Angeles (1st Of 8).........        1.058        1.202        1.061
02050......................           19  Los Angeles (2nd Of 8).........        1.058        1.202        1.061
02050......................           20  Los Angeles (3rd Of 8).........        1.058        1.202        1.061
02050......................           21  Los Angeles (4th Of 8).........        1.058        1.202        1.061
02050......................           22  Los Angeles (5th Of 8).........        1.058        1.202        1.061
02050......................           23  Los Angeles (6th Of 8).........        1.058        1.202        1.061
02050......................           24  Los Angeles (7th Of 8).........        1.058        1.202        1.061
02050......................           25  Los Angeles (8th Of 8).........        1.058        1.202        1.061
00542......................           03  Marin/Napa/Solano, CA..........        1.014        1.189        0.983
00542......................           10  Merced/Surr.Cntys, CA..........        1.010        0.998        0.983
00542......................           12  Monterey/Santa Cruz, CA........        1.016        1.126        0.983
00542......................           01  N. Coastal Cntys, CA...........        1.003        1.081        0.983
00542......................           02  Ne Rural, CA...................        0.992        0.972        0.983
00542......................           07  Oakland/Berkley, CA............        1.035        1.236        0.983
00542......................           27  Riverside, CA..................        1.018        1.070        1.018
00542......................           04  Sacramento/Surr. Cntys,........        1.023        1.078        0.983
00542......................           15  San Bernadino/E.Ctrl Cntys.....        1.020        1.066        1.060
02050......................           28  San Diego/Imperial, CA.........        1.022        1.084        0.994
00542......................           05  San Francisco, CA..............        1.053        1.316        0.983
00542......................           06  San Mateo, CA..................        1.044        1.302        0.983
02050......................           16  Santa Barbara, CA..............        1.014        1.096        1.028
00542......................           09  Santa Clara, CA................        1.056        1.288        0.983
00542......................           08  Stockton/Surr. Cntys, CA.......        1.010        1.034        0.983
02050......................           17  Ventura, CA....................        1.031        1.162        1.028
00550......................           01  Colorado.......................        0.994        0.970        0.755
10230......................           04  Eastern CT.....................        1.016        1.092        1.018
10230......................           01  Nw And N. Cntrl CT.............        1.026        1.115        1.013
10230......................           03  S. Cntrl CT....................        1.037        1.164        1.094
10230......................           02  Sw CT..........................        1.054        1.207        1.116
00570......................           01  Delaware.......................        1.024        1.025        0.728
00580......................           01  DC + MD/VA Suburbs.............        1.055        1.180        0.964
00590......................           03  Fort Lauderdale, FL............        0.996        1.008        1.622
00590......................           04  Miami, FL......................        1.025        1.056        2.049
00590......................           02  N/Nc FL Cities.................        0.976        0.942        1.262
00590......................           01  Rest Of Florida................        0.968        0.892        1.262
01040......................           01  Atlanta, GA....................        0.991        1.026        0.827
01040......................           04  Rest Of GA.....................        0.960        0.848        0.827
01040......................           02  Small GA Cities 02.............        0.972        0.906        0.827
01040......................           03  Small GA Cities 03.............        0.964        0.876        0.827
01120......................           01  Hawaii/Guam....................        1.001        1.157        0.973
05130......................           12  North Idaho....................        0.961        0.890        0.738
05130......................           11  South Idaho....................        0.965        0.912        0.738
00621......................           10  Champaign-Urbana, IL...........        0.958        0.902        1.072
00621......................           16  Chicago, IL....................        1.036        1.097        1.578
00621......................           03  De Kalb, IL....................        0.966        0.899        0.958
00621......................           11  Decatur, IL....................        0.972        0.896        1.008
00621......................           12  East St. Louis, IL.............        0.988        0.944        1.390
00621......................           06  Kankakee, IL...................        0.966        0.903        1.019
00621......................           08  Normal, IL.....................        0.983        0.930        0.934
00621......................           01  Northwest, IL..................        0.962        0.869        0.934
00621......................           05  Peoria, IL.....................        0.994        0.968        0.934
00621......................           07  Quincy, IL.....................        0.960        0.860        0.934
00621......................           04  Rock Island, IL................        0.984        0.908        0.934
00621......................           02  Rockford, IL...................        0.994        0.980        0.975
00621......................           13  Southeast IL...................        0.960        0.855        0.934
00621......................           14  Southern IL....................        0.960        0.859        0.980
00621......................           09  Springfield, IL................        0.988        0.951        1.042
00621......................           15  Suburban Chicago, IL...........        1.014        1.095        1.148
00630......................           01  Metropolitan IN................        0.994        0.950        0.455
00630......................           03  Rest Of IN.....................        0.976        0.884        0.431
00630......................           02  Urban IN.......................        0.977        0.900        0.431
00640......................           05  Des Moines (Polk/Warren) IA....        0.988        0.954        0.672
00640......................           03  North Central Iowa.............        0.964        0.880        0.672
00640......................           02  Northeast Iowa.................        0.968        0.896        0.672
00640......................           06  Northwest Iowa.................        0.958        0.868        0.672
00640......................           04  S Cntrl IA (Excl. Des Moines...        0.952        0.859        0.672
00640......................           01  Southeast Iowa.................        0.970        0.912        0.672
00640......................           07  Southwest Iowa.................        0.960        0.880        0.672
00740......................           05  Kansas City, Kansas............        0.984        0.956        1.162
00650......................           01  Rest Of Kansas.................        0.956        0.885        1.162
00740......................           04  Suburban Kansas City, Kansas...        0.984        0.956        1.162
00660......................           01  Lexington & Louisville, KY.....        0.986        0.910        0.743
00660......................           03  Rest Of Kentucky...............        0.966        0.848        0.743
00660......................           02  Sm Cities (City Limits), KY....        0.968        0.874        0.743
00528......................           07  Alexandria, LA.................        0.972        0.876        0.860
00528......................           03  Baton Rouge, LA................        0.988        0.930        0.860
00528......................           06  Lafayette, LA..................        0.976        0.892        0.860
00528......................           04  Lake Charles, LA...............        0.974        0.904        0.860
00528......................           05  Monroe, LA.....................        0.968        0.874        0.860
00528......................           01  New Orleans, LA................        0.996        0.974        1.091
00528......................           50  Rest Of LA.....................        0.968        0.865        0.868
00528......................           02  Shreveport, LA.................        0.987        0.914        0.860
21200......................           02  Central Maine..................        0.952        0.916        0.738
21200......................           01  Northern Maine.................        0.956        0.916        0.738
21200......................           03  Southern Maine.................        0.968        1.007        0.738
00690......................           01  Baltimore/Surr. Cntys, MD......        1.024        1.038        1.021
00690......................           03  South & E. Shore MD............        0.998        0.991        0.841
00690......................           02  Western MD.....................        0.994        0.972        0.852
00700......................           02  MA Suburbs/Rural Cities........        1.006        1.086        0.916
00700......................           01  Urban MA.......................        1.016        1.149        0.916
00710......................           01  Detroit, MI....................        1.051        1.064        2.394
00710......................           02  Michigan, Not Detroit..........        1.004        0.953        1.520
00720......................           00  Minnesota (Blue Shield)........        0.994        0.968        0.671
10240......................           00  Minnesota (Travelers)..........        0.994        0.968        0.671
10250......................           01  Rest Of Mississippi............        0.955        0.826        0.688
10250......................           02  Urban Mississippi..............        0.965        0.885        0.688
00740......................           03  K.C. (Jackson Cnty), MO........        0.984        0.956        1.193
00740......................           02  N K.C. (Clay/Platte), MO.......        0.984        0.956        1.192
11260......................           03  Rest Of MO.....................        0.947        0.828        1.169
00740......................           06  Rural Nw Counties, MO..........        0.952        0.850        1.169
11260......................           02  Sm E. Cities, MO...............        0.947        0.824        1.169
00740......................           01  St Joseph, MO..................        0.951        0.858        1.169
11260......................           01  St. Louis/Lg E. Cities, MO.....        0.986        0.942        1.272
00751......................           01  Montana........................        0.960        0.895        0.737
00655......................           00  Nebraska.......................        0.956        0.878        0.440
01290......................           03  Elko & Ely (Cities), NV........        0.984        1.006        1.016
01290......................           01  Las Vegas, Et Al. (Cities), NV.        1.024        1.052        1.016
01290......................           02  Reno, Et Al. (Cities), NV......        1.002        1.095        1.016
01290......................           99  Rest Of Nevada.................        1.008        1.046        1.016
00780......................           40  New Hampshire..................        0.975        1.022        0.759
00860......................           02  Middle NJ......................        1.033        1.104        0.958
00860......................           01  Northern NJ....................        1.050        1.173        0.958
00860......................           03  Southern NJ....................        1.020        1.056        0.958
01360......................           05  New Mexico.....................        0.978        0.914        0.780
00801......................           01  Buffalo/Surr. Cntys, NY........        1.004        0.939        0.892
00803......................           01  Manhattan, NY..................        1.077        1.307        1.596
00801......................           03  N. Central Cities, NY..........        1.001        0.960        0.892
00803......................           02  Nyc Suburbs/Long I., NY........        1.064        1.232        1.844
00803......................           03  Poughkpsie/N Nyc Suburbs.......        1.008        1.050        1.272
14330......................           04  Queens, NY.....................        1.058        1.248        1.774
00801......................           04  Rest Of New York...............        0.988        0.936        0.892
00801......................           02  Rochester/Surr. Cntys, N.......        1.016        1.004        0.892
05535......................           00  North Carolina.................        0.970        0.910        0.406
00820......................           01  North Dakota...................        0.958        0.878        0.652
16360......................           00  Ohio...........................        0.992        0.946        0.984
01370......................           00  Oklahoma.......................        0.970        0.896        0.498
01380......................           02  Eugene, Et Al. (Cities), OR....        0.964        0.973        0.794
01380......................           01  Portland, Et Al. (Cities), OR..        0.995        1.016        0.794
01380......................           99  Rest Of Oregon.................        0.970        0.952        0.794
01380......................           03  Salem, Et Al. (Cities),........        0.970        0.960        0.794
01380......................           12  Sw OR Cities (City Limits).....        0.970        0.971        0.794
00865......................           02  Lg PA Cities...................        1.007        1.002        1.188
00865......................           01  Philly/Pitt Med Shcls/Hosps, PA        1.020        1.027        1.382
00865......................           04  Rest Of PA.....................        0.974        0.914        0.852
00865......................           03  Sm PA Cities...................        0.984        0.931        0.861
00973......................           20  Puerto Rico....................        0.882        0.751        0.367
00870......................           01  Rhode Island...................        1.014        1.036        1.152
00880......................           01  South Carolina.................        0.974        0.886        0.404
00820......................           02  South Dakota...................        0.944        0.856        0.566
05440......................           35  Tennessee......................        0.972        0.898        0.466
00900......................           29  Abilene, TX....................        0.966        0.870        0.666
00900......................           26  Amarillo, TX...................        0.974        0.892        0.666
00900......................           31  Austin, TX.....................        0.978        0.977        0.666
00900......................           20  Beaumont, TX...................        0.996        0.924        0.966
00900......................           09  Brazoria, TX...................        1.009        0.960        0.966
00900......................           10  Brownsville, TX................        0.968        0.868        0.666
00900......................           24  Corpus Christi, TX.............        0.980        0.921        0.666
00900......................           11  Dallas, TX.....................        1.004        0.992        0.698
00900......................           12  Denton, TX.....................        0.982        0.962        0.666
00900......................           14  El Paso, TX....................        0.984        0.894        0.698
00900......................           28  Fort Worth, TX.................        0.981        0.954        0.698
00900......................           15  Galveston, TX..................        0.986        0.967        0.966
00900......................           16  Grayson, TX....................        0.962        0.888        0.666
00900......................           18  Houston, TX....................        1.018        0.994        1.042
00900......................           33  Laredo, TX.....................        0.962        0.854        0.666
00900......................           17  Longview, TX...................        0.970        0.896        0.666
00900......................           21  Lubbock, TX....................        0.952        0.888        0.666
00900......................           19  Mc Allen, TX...................        0.953        0.855        0.666
00900......................           23  Midland, TX....................        1.007        0.949        0.666
00900......................           02  Northeast Rural TX.............        0.964        0.870        0.666
00900......................           13  Odessa, TX.....................        1.000        0.936        0.666
00900......................           25  Orange, TX.....................        0.996        0.924        0.666
00900......................           30  San Angelo, TX.................        0.951        0.873        0.666
00900......................           07  San Antonio, TX................        0.976        0.928        0.666
00900......................           03  Southeast Rural TX.............        0.968        0.884        0.696
00900......................           06  Temple, TX.....................        0.968        0.885        0.666
00900......................           08  Texarkana, TX..................        0.954        0.878        0.666
00900......................           27  Tyler, TX......................        0.978        0.912        0.666
00900......................           32  Victoria, TX...................        0.980        0.920        0.666
00900......................           22  Waco, TX.......................        0.974        0.874        0.666
00900......................           04  Western TX.....................        0.958        0.835        0.666
00900......................           34  Wichita Falls, TX..............        0.960        0.876        0.666
00910......................           09  Utah...........................        0.986        0.922        0.692
00780......................           50  Vermont........................        0.958        0.964        0.492
00973......................           50  Virgin Islands.................        0.983        0.989        1.012
10490......................           04  Rest Of VA.....................        0.972        0.882        0.513
10490......................           01  Richmond & Charlottesville, VA.        0.990        0.972        0.486
10490......................           03  Sm Town/Industrial VA..........        0.972        0.894        0.524
10490......................           02  Tidewater & N VA Cntys.........        0.990        0.980        0.616
01390......................           03  E Cntrl & Ne WA................        0.990        0.969        0.906
01390......................           02  Seattle (King Cnty), WA........        1.012        1.063        0.906
01390......................           01  W & Se WA (Excl Seattle).......        0.995        0.980        0.906
16510......................           16  Charleston, WV.................        0.984        0.922        0.846
16510......................           18  Eastern Valley, WV.............        0.961        0.890        0.846
16510......................           19  Ohio River Valley, WV..........        0.960        0.857        0.846
16510......................           20  Southern Valley, WV............        0.956        0.846        0.846
16510......................           17  Wheeling, WV...................        0.966        0.870        0.846
00951......................           13  Central WI.....................        0.960        0.868        0.961
00951......................           40  Green Bay (Northeast), WI......        0.978        0.904        0.961
00951......................           54  Janesville (S Cntrl), WI.......        0.968        0.900        0.961
00951......................           19  La Crosse (W Cntrl), WI........        0.974        0.899        0.961
00951......................           15  Madison (Dane Cnty), WI........        0.984        0.990        0.961
00951......................           46  Milwaukee Surburbs (Se), WI....        1.000        0.984        0.961
00951......................           04  Milwaukee, WI..................        1.004        0.994        0.961
00951......................           12  Northwest WI...................        0.964        0.874        0.961
00951......................           60  Oshkosh (E Cntrl), WI..........        0.974        0.898        0.961
00951......................           14  Southwest WI...................        0.960        0.869        0.961
00951......................           36  Wausau (N Cntrl), WI...........        0.966        0.882        0.961
00825......................           21  Wyoming........................        0.978        0.910        0.726
----------------------------------------------------------------------------------------------------------------
Note: Work GPCI is the \1/4\ work GPCI required by Section 1848(e)(1)(A)(iii) of the Social Security Act.       
GPCIs rescaled by the following factors to assure budget neutrality: Work=1.00073; Practice expense=1.00125;    
  Malpractice=1.02307.                                                                                          


            Addendum D.--Changes in Geographic Adjustment Factor 1996 vs. 1994 (in Descending Order)            
----------------------------------------------------------------------------------------------------------------
                        Locality                                                                       Percent  
    Carrier No.           No.            Locality name         1996 GAF      1994 GAF     Change        change  
----------------------------------------------------------------------------------------------------------------
00870...............           01  Rhode Island.............        1.068        0.991        0.077          7.8
10230...............           03  S. Cntrl CT..............        1.123        1.061        0.062          5.8
10230...............           01  Nw And N. Cntrl CT.......        1.092        1.031        0.061          5.9
00803...............           01  Manhattan, NY............        1.225        1.168        0.057          4.9
00590...............           04  Miami, FL................        1.114        1.059        0.055          5.2
00900...............           18  Houston, TX..............        1.034        0.984        0.050          5.1
10230...............           04  Eastern CT...............        1.072        1.023        0.049          4.8
00590...............           03  Fort Lauderdale, FL......        1.055        1.006        0.049          4.9
00900...............           15  Galveston, TX............        1.001        0.953        0.048          5.0
10230...............           02  Sw CT....................        1.143        1.097        0.046          4.2
01120...............           01  Hawaii/Guam..............        1.086        1.041        0.045          4.3
00900...............           11  Dallas, TX...............        1.006        0.962        0.044          4.6
00900...............           28  Fort Worth, TX...........        0.977        0.935        0.042          4.5
00780...............           40  New Hampshire............        1.003        0.965        0.038          3.9
21200...............           03  Southern Maine...........        0.992        0.954        0.038          4.0
00700...............           01  Urban MA.................        1.084        1.048        0.036          3.4
00590...............           01  Rest of Florida..........        0.969        0.934        0.035          3.7
00951...............           15  Madison (Dane Cnty), WI..        1.002        0.968        0.034          3.5
10490...............           01  Richmond &                       0.975        0.941        0.034          3.6
                                    Charlottesville, VA.                                                        
00780...............           50  Vermont..................        0.955        0.922        0.033          3.6
00900...............           31  Austin, TX...............        0.979        0.946        0.033          3.5
00900...............           09  Brazoria, TX.............        1.003        0.971        0.032          3.3
00710...............           01  Detroit, MI..............        1.137        1.105        0.032          2.9
01040...............           01  Atlanta, GA..............        1.011        0.984        0.027          2.7
01040...............           02  Small GA Cities 02.......        0.951        0.924        0.027          2.9
00700...............           02  MA Suburbs/Rural Cities..        1.048        1.021        0.027          2.6
00860...............           01  Northern NJ..............        1.109        1.083        0.026          2.4
00803...............           03  Poughkpsie/N NYC Suburb,         1.050        1.025        0.025          2.4
                                    NY.                                                                         
00590...............           02  N/Nc FL Cities...........        0.988        0.964        0.024          2.5
00900...............           21  Lubbock, TX..............        0.924        0.900        0.024          2.7
21200...............           02  Central Maine............        0.938        0.915        0.023          2.5
16510...............           18  Eastern Valley, WV.......        0.937        0.916        0.021          2.3
01040...............           04  Rest Of GA...............        0.917        0.899        0.018          2.0
00900...............           07  San Antonio, TX..........        0.949        0.932        0.017          1.8
01040...............           03  Small GA Cities 03.......        0.929        0.913        0.016          1.8
00900...............           20  Beaumont, TX.............        0.973        0.957        0.016          1.7
21200...............           01  Northern Maine...........        0.936        0.922        0.014          1.5
00900...............           06  Temple, TX...............        0.927        0.913        0.014          1.5
00951...............           54  Janesville (S Cntrl), WI.        0.946        0.933        0.013          1.4
00900...............           08  Texarkana, TX............        0.915        0.903        0.012          1.3
00510...............           05  Birmingham, AL...........        0.957        0.946        0.011          1.2
05535...............           00  North Carolina...........        0.924        0.913        0.011          1.2
05440...............           35  Tennessee................        0.923        0.912        0.011          1.2
00570...............           01  Delaware.................        1.015        1.005        0.010          1.0
00710...............           02  Michigan, Not Detroit....        1.013        1.003        0.010          1.0
00900...............           26  Amarillo, TX.............        0.930        0.920        0.010          1.1
00900...............           19  Mc Allen, TX.............        0.904        0.894        0.010          1.1
00900...............           22  Waco, TX.................        0.923        0.913        0.010          1.1
00510...............           01  Northwest AL.............        0.939        0.930        0.009          1.0
01030...............           08  Yuma, AZ.................        0.976        0.967        0.009          0.9
00880...............           01  South Carolina...........        0.915        0.906        0.009          0.0
00951...............           40  Green Bay (Northeast), W.        0.951        0.942        0.009          1.0
00860...............           02  Middle NJ................        1.062        1.054        0.008          0.8
00951...............           60  Oshkosh (E Cntrl), WI....        0.946        0.938        0.008          0.9
00900...............           33  Laredo, TX...............        0.907        0.900        0.007          0.8
00580...............           01  DC + MD/VA Suburbs.......        1.105        1.098        0.007          0.6
00860...............           03  Southern NJ..............        1.035        1.028        0.007          0.7
01030...............           05  Flagstaff, AZ............        0.973        0.967        0.006          0.6
01030...............           99  Rest Of AZ...............        0.988        0.982        0.006          0.6
00900...............           14  El Paso, TX..............        0.936        0.930        0.006          0.6
00660...............           01  Lexington & Louisville,          0.946        0.941        0.005          0.5
                                    KY.                                                                         
00690...............           01  Baltimore/Surr. Cntys, MD        1.032        1.028        0.004          0.4
00801...............           03  N. Central Cities, NY....        0.981        0.977        0.004          0.4
00900...............           03  Southeast Rural TX.......        0.922        0.919        0.003          0.3
10490...............           03  Sm Town/Industrial VA....        0.920        0.917        0.003          0.3
00951...............           13  Central WI...............        0.924        0.921        0.003          0.3
00951...............           14  Southwest WI.............        0.924        0.921        0.003          0.3
00740...............           05  Kansas City, Kansas......        0.982        0.980        0.002          0.2
00740...............           04  Suburban Kansas City,            0.982        0.980        0.002          0.2
                                    Kansas.                                                                     
00528...............           04  Lake Charles, LA.........        0.941        0.939        0.002          0.2
00951...............           04  Milwaukee, WI............        0.999        0.997        0.002          0.2
00520...............           13  Arkansas.................        0.887        0.886        0.001          0.1
00740...............           03  K.C. (Jackson Cnty), MO..        0.983        0.982        0.001          0.1
00740...............           02  N K.C. (Clay/Platte), MO.        0.983        0.982        0.001          0.1
16360...............           00  Ohio.....................        0.973        0.972        0.001          0.1
00900...............           24  Corpus Christi, TX.......        0.941        0.940        0.001          0.1
00900...............           16  Grayson, TX..............        0.918        0.917        0.001          0.1
00951...............           19  La Crosse (W Cntrl), WI..        0.943        0.942        0.001          0.1
00951...............           36  Wausau (N Cntrl), WI.....        0.932        0.931        0.001          0.1
00865...............           01  Philly/Pitt Med Shcls/           1.041        1.040        0.001          0.1
                                    Hosps, PA.                                                                  
00900...............           02  Northeast Rural TX.......        0.911        0.911        0.000          0.0
00510...............           02  North Central AL.........        0.920        0.921       -0.001         -0.1
00510...............           03  Southeast AL.............        0.922        0.923       -0.001         -0.1
00650...............           01  Rest Of Kansas...........        0.936        0.937       -0.001         -0.1
00900...............           04  Western TX...............        0.893        0.894       -0.001         -0.1
10490...............           04  Rest Of VA...............        0.912        0.913       -0.001         -0.1
00803...............           02  Nyc Suburbs/Long I., NY..        1.170        1.171       -0.001         -0.1
01030...............           07  Prescott, AZ.............        0.964        0.967       -0.003         -0.3
00951...............           12  Northwest WI.............        0.925        0.928       -0.003         -0.3
00801...............           04  Rest Of New York.........        0.960        0.965       -0.005         -0.5
00900...............           29  Abilene, TX..............        0.909        0.915       -0.006         -0.7
00900...............           27  Tyler, TX................        0.933        0.939       -0.006         -0.6
16510...............           19  Ohio River Valley, WV....        0.910        0.916       -0.006         -0.7
00621...............           15  Suburban Chicago, IL.....        1.050        1.057       -0.007         -0.7
00900...............           12  Denton, TX...............        0.955        0.962       -0.007         -0.7
00740...............           01  St Joseph, MO............        0.920        0.927       -0.007         -0.8
00655...............           00  Nebraska.................        0.894        0.903       -0.009         -1.0
00900...............           17  Longview, TX.............        0.921        0.930       -0.009         -1.0
01390...............           02  Seattle (King Cnty), WA..        1.023        1.033       -0.010         -1.0
00542...............           05  San Francisco, CA........        1.153        1.163       -0.010         -0.9
00510...............           04  Mobile, AL...............        0.925        0.936       -0.011         -1.2
01360...............           05  New Mexico...............        0.937        0.948       -0.011         -1.2
00801...............           01  Buffalo/Surr. Cntys, NY..        0.967        0.978       -0.011         -1.1
00900...............           30  San Angelo, TX...........        0.900        0.911       -0.011         -1.2
00900...............           34  Wichita Falls, TX........        0.906        0.917       -0.011         -1.2
02050...............           17  Ventura, CA..............        1.079        1.090       -0.011         -1.0
02050...............           16  Santa Barbara, CA........        1.042        1.054       -0.012         -1.1
00528...............           05  Monroe, LA...............        0.918        0.930       -0.012         -1.3
00528...............           50  Rest Of LA...............        0.915        0.927       -0.012         -1.3
10250...............           01  Rest Of Mississippi......        0.883        0.895       -0.012         -1.3
10250...............           02  Urban Mississippi........        0.913        0.925       -0.012         -1.3
00951...............           46  Milwaukee Surburbs (Se),         0.985        0.997       -0.012         -1.2
                                    WI.                                                                         
00550...............           01  Colorado.................        0.966        0.979       -0.013         -1.3
01370...............           00  Oklahoma.................        0.910        0.923       -0.013         -1.4
00900...............           25  Orange, TX...............        0.944        0.957       -0.013         -1.4
00720...............           00  Minnesota (Blue Shield)..        0.961        0.975       -0.014         -1.4
10240...............           00  Minnesota (Travelers)....        0.961        0.975       -0.014         -1.4
00900...............           10  Brownsville, TX..........        0.905        0.919       -0.014         -1.5
14330...............           04  Queens, NY...............        1.163        1.178       -0.015         -1.3
00510...............           06  Rest Of AL...............        0.902        0.917       -0.015         -1.6
00630...............           02  Urban IN.................        0.912        0.927       -0.015         -1.6
00740...............           06  Rural Nw Counties, MO....        0.913        0.928       -0.015         -1.6
16510...............           20  Southern Valley, WV......        0.898        0.913       -0.015         -1.6
00640...............           05  Des Moines (Polk/Warren),        0.950        0.968       -0.018         -1.9
                                    IA.                                                                         
01030...............           01  Phoenix, AZ..............        1.002        1.020       -0.018         -1.8
10490...............           02  Tidewater & N VA Cntys...        0.958        0.977       -0.019         -1.9
00973...............           20  Puerto Rico..............        0.794        0.813       -0.019         -2.3
16510...............           17  Wheeling, WV.............        0.911        0.930       -0.019         -2.0
00528...............           07  Alexandria, LA...........        0.917        0.937       -0.020         -2.1
11260...............           03  Rest Of MO...............        0.899        0.919       -0.020         -2.2
11260...............           02  Sm E. Cities, MO.........        0.897        0.917       -0.020         -2.2
00820...............           02  South Dakota.............        0.880        0.900       -0.020         -2.2
16510...............           16  Charleston, WV...........        0.941        0.962       -0.021         -2.2
00660...............           02  Sm Cities (City Limits),         0.908        0.929       -0.021         -2.3
                                    KY.                                                                         
01030...............           02  Tucson, AZ...............        0.980        1.001       -0.021         -2.1
00630...............           03  Rest Of IN...............        0.901        0.923       -0.022         -2.4
00640...............           02  Northeast Iowa...........        0.913        0.935       -0.022         -2.4
00801...............           02  Rochester/Surr. Cntys, N.        0.995        1.017       -0.022         -2.2
00900...............           13  Odessa, TX...............        0.946        0.969       -0.023         -2.4
00640...............           01  Southeast Iowa...........        0.920        0.943       -0.023         -2.4
00630...............           01  Metropolitan IN..........        0.938        0.962       -0.024         -2.5
00865...............           03  Sm PA Cities.............        0.944        0.968       -0.024         -2.5
00640...............           07  Southwest Iowa...........        0.902        0.926       -0.024         -2.6
00660...............           03  Rest Of Kentucky.........        0.895        0.919       -0.024         -2.6
00900...............           32  Victoria, TX.............        0.928        0.952       -0.024         -2.5
00865...............           02  Lg PA Cities.............        1.001        1.026       -0.025         -2.4
00820...............           01  North Dakota.............        0.898        0.923       -0.025         -2.7
00973...............           50  Virgin Islands...........        0.974        1.000       -0.026         -2.6
00825...............           21  Wyoming..................        0.925        0.951       -0.026         -2.7
01380...............           01  Portland, Et Al.                 0.981        1.007       -0.026         -2.6
                                    (Cities), OR.                                                               
00542...............           09  Santa Clara, CA..........        1.134        1.161       -0.027         -2.3
00865...............           04  Rest Of PA...............        0.930        0.957       -0.027         -2.8
00690...............           03  South & E. Shore MD......        0.974        1.001       -0.027         -2.7
00528...............           03  Baton Rouge, LA..........        0.944        0.972       -0.028         -2.9
02050...............           18  Los Angeles (1st Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           19  Los Angeles (2nd Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           20  Los Angeles (3rd Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           21  Los Angeles (4th Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           22  Los Angeles (5th Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           23  Los Angeles (6th Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           24  Los Angeles (7th Of 8)...        1.103        1.131       -0.028         -2.5
02050...............           25  Los Angeles (8th Of 8)...        1.103        1.131       -0.028         -2.5
00621...............           10  Champaign-Urbana, IL.....        0.927        0.955       -0.028         -2.9
11260...............           01  St. Louis/Lg E. Cities,          0.968        0.996       -0.028         -2.8
                                    MO.                                                                         
00621...............           09  Springfield, IL..........        0.961        0.990       -0.029         -2.9
00640...............           06  Northwest Iowa...........        0.893        0.922       -0.029         -3.1
00640...............           04  S Cntrl IA (Excl. Des            0.886        0.915       -0.029         -3.2
                                    Moines).                                                                    
01290...............           03  Elko & Ely (Cities), NV..        0.980        1.009       -0.029         -2.9
00542...............           01  N. Coastal Cntys, CA.....        1.019        1.049       -0.030         -2.9
00528...............           01  New Orleans, LA..........        0.977        1.007       -0.030         -3.0
00542...............           12  Monterey/Santa Cruz, CA..        1.044        1.075       -0.031         -2.9
00528...............           06  Lafayette, LA............        0.921        0.952       -0.031         -3.3
00751...............           01  Montana..................        0.907        0.938       -0.031         -3.3
00621...............           12  East St. Louis, IL.......        0.974        1.005       -0.031         -3.1
00542...............           06  San Mateo, CA............        1.130        1.163       -0.033         -2.8
00528...............           02  Shreveport, LA...........        0.935        0.968       -0.033         -3.4
01380...............           12  Sw OR Cities (City               0.946        0.979       -0.033         -3.4
                                    Limits).                                                                    
01020...............           01  Alaska...................        1.128        1.164       -0.036         -3.1
00621...............           06  Kankakee, IL.............        0.924        0.961       -0.037         -3.9
05130...............           11  South Idaho..............        0.914        0.951       -0.037         -3.9
00640...............           03  North Central Iowa.......        0.897        0.934       -0.037         -4.0
00910...............           09  Utah.....................        0.926        0.964       -0.038         -3.9
01390...............           01  W & Se WA (Excl Seattle).        0.965        1.004       -0.039         -3.9
02050...............           26  Anaheim/Santa Ana, CA....        1.092        1.133       -0.041         -3.6
00542...............           08  Stockton/Surr. Cntys, CA.        0.998        1.039       -0.041         -3.9
05130...............           12  North Idaho..............        0.901        0.942       -0.041         -4.4
00900...............           23  Midland, TX..............        0.946        0.988       -0.042         -4.3
00542...............           03  Marin/Napa/Solano, CA....        1.063        1.105       -0.042         -3.8
00621...............           16  Chicago, IL..............        1.066        1.108       -0.042         -3.8
01390...............           03  E Cntrl & Ne WA..........        0.956        0.999       -0.043         -4.3
00542...............           15  San Bernadino/E.Ctrl             1.019        1.063       -0.044         -4.1
                                    Cntys, CA.                                                                  
01380...............           03  Salem, Et Al. (Cities),          0.934        0.979       -0.045         -4.6
                                    OR.                                                                         
00690...............           02  Western MD...............        0.955        1.001       -0.046         -4.6
00542...............           07  Oakland/Berkley, CA......        1.092        1.139       -0.047         -4.1
02050...............           28  San Diego/Imperial, CA...        1.022        1.069       -0.047         -4.4
00621...............           11  Decatur, IL..............        0.918        0.966       -0.048         -5.0
00542...............           04  Sacramento/Surr. Cntys,          1.020        1.068       -0.048         -4.5
                                    CA.                                                                         
01380...............           02  Eugene, Et Al. (Cities),         0.935        0.984       -0.049         -5.0
                                    OR.                                                                         
01290...............           01  Las Vegas, Et Al.                1.010        1.060       -0.050         -4.7
                                    (Cities), NV.                                                               
00542...............           27  Riverside, CA............        1.014        1.065       -0.051         -4.8
00621...............           03  De Kalb, IL..............        0.912        0.964       -0.052         -5.4
01290...............           99  Rest Of Nevada...........        0.998        1.050       -0.052         -5.0
00542...............           11  Fresno/Madera, CA........        0.971        1.025       -0.054         -5.3
00542...............           10  Merced/Surr.Cntys, CA....        0.977        1.031       -0.054         -5.2
00621...............           01  Northwest, IL............        0.896        0.950       -0.054         -5.7
01290...............           02  Reno, Et Al. (Cities), NV        1.013        1.069       -0.056         -5.2
00542...............           14  Bakersfield, CA..........        0.994        1.053       -0.059         -5.6
01380...............           99  Rest Of Oregon...........        0.924        0.985       -0.061         -6.2
00621...............           14  Southern IL..............        0.889        0.950       -0.061         -6.4
00542...............           02  Ne Rural, CA.............        0.952        1.014       -0.062         -6.1
00542...............           13  Kings/Tulare, CA.........        0.955        1.018       -0.063         -6.2
00621...............           07  Quincy, IL...............        0.886        0.950       -0.064         -6.7
00621...............           02  Rockford, IL.............        0.955        1.019       -0.064         -6.3
00621...............           08  Normal, IL...............        0.926        0.992       -0.066         -6.7
00621...............           13  Southeast IL.............        0.882        0.950       -0.068         -7.2
00621...............           04  Rock Island, IL..........        0.914        0.987       -0.073         -7.4
00621...............           05  Peoria, IL...............        0.938        1.024       -0.086         -8.4
----------------------------------------------------------------------------------------------------------------
Note: Work GPCI is the \1/4\ work GPCI required by Section 1848 (e)(1)(A)(iii) of the Social Security Act.      
GPCIs rescaled by the following factors to assure budget neutrality: Work=1.00073; Practice expense=1.00125;    
  Malpractice=1.02307.                                                                                          


    Addendum E.--1996 Geographic Practice Cost Indices and Geographic   
         Adjustment Factors for States With Multiple Localities         
------------------------------------------------------------------------
                                     Practice   Malpractice             
     State name           Work       expense                   1996 GAF 
------------------------------------------------------------------------
Alabama.............        0.980        0.870        0.927        0.932
Arizona.............        0.996        0.956        1.321        0.995
California..........        1.033        1.145        0.668        1.061
Connecticut.........        1.050        1.192        1.001        1.106
Florida.............        0.988        0.991        1.697        1.023
Georgia.............        0.986        0.948        0.902        0.966
Idaho...............        0.961        0.882        0.588        0.911
Illinois............        1.002        1.007        1.157        1.011
Indiana.............        0.982        0.916        0.356        0.925
Iowa................        0.960        0.877        0.679        0.912
Kansas..............        0.964        0.892        1.191        0.945
Kentucky............        0.971        0.868        0.819        0.921
Louisiana...........        0.979        0.896        0.940        0.943
Maine...............        0.969        0.969        0.759        0.959
Maryland*...........        1.012        1.016        1.056        1.016
Massachusetts.......        1.026        1.150        0.978        1.075
Michigan............        1.023        0.992        2.509        1.082
Mississippi.........        0.958        0.844        0.726        0.900
Missouri............        0.974        0.900        1.188        0.954
Nevada..............        1.007        1.029        0.887        1.010
New Jersey..........        1.047        1.173        0.762        1.085
New York............        1.050        1.167        1.410        1.115
Oregon..............        0.974        0.952        0.637        0.949
Pennsylvania........        1.002        0.982        0.933        0.990
Texas...............        0.985        0.930        0.974        0.962
Virginia*...........        0.986        0.938        0.518        0.944
Washington..........        0.990        0.998        0.748        0.982
West Virginia.......        0.964        0.851        1.004        0.920
Wisconsin...........        0.982        0.926        1.160        0.968
------------------------------------------------------------------------
*The Maryland and Virginia state GPCIs do not include the parts of      
  Maryland, Virginia included in the District of Columbia physician fee 
  schedule area. The District of Columbia fee schedule area includes    
  Washington, D.C.; Prince Georges and Montgomery Counties in Maryland; 
  and Fairfax and Arlington Counties and the City of Alexandria in      
  Virginia.                                                             
Note: Work GPCI is the \1/4\ work GPCI required by Section              
  1848(e)(1)(A)(iii) of the Social Security Act.                        
GPCIs rescaled by the following factors to assure budget neutrality:    
  Work=1.00073; Practice expense=1.00125; Malpractice=1.02307.          


    Addendum F.--1995 Geographic Practice Cost Indices and Geographic   
         Adjustment Factors for States With Multiple Localities         
------------------------------------------------------------------------
                                     Practice                           
     State name           Work       expense    Malpractice    1995 GAF 
------------------------------------------------------------------------
Alabama.............        0.978        0.878        0.876        0.932
Arizona.............        0.996        0.978        1.288        1.003
California..........        1.034        1.148        1.019        1.080
Connecticut.........        1.032        1.140        1.051        1.077
Florida.............        0.988        0.972        1.480        1.005
Georgia.............        0.976        0.941        0.827        0.954
Idaho...............        0.964        0.907        0.738        0.930
Illinois............        1.010        1.028        1.311        1.032
Indiana.............        0.986        0.926        0.445        0.935
Iowa................        0.968        0.898        0.672        0.925
Kansas..............        0.961        0.900        1.162        0.946
Kentucky............        0.975        0.885        0.743        0.927
Louisiana...........        0.983        0.920        0.939        0.955
Maine...............        0.959        0.953        0.738        0.946
Maryland*...........        1.017        1.024        0.980        1.018
Massachusetts.......        1.014        1.133        0.916        1.058
Michigan............        1.030        1.015        2.001        1.070
Mississippi.........        0.960        0.859        0.688        0.906
Missouri............        0.976        0.918        1.232        0.965
Nevada..............        1.017        1.063        1.016        1.036
New Jersey..........        1.040        1.136        0.958        1.075
New York............        1.045        1.156        1.484        1.112
Oregon..............        0.977        0.980        0.794        0.969
Pennsylvania........        1.002        0.984        1.128        1.001
Texas...............        0.984        0.931        0.752        0.951
Virginia*...........        0.982        0.938        0.540        0.943
Washington..........        1.000        1.004        0.906        0.997
West Virginia.......        0.968        0.882        0.846        0.927
Wisconsin...........        0.985        0.940        0.961        0.965
------------------------------------------------------------------------
*The Maryland and Virginia state GPCIs do not include the parts of      
  Maryland and Virginia included in the District of Columbia physician  
  fee schedule area. The District of Columbia fee schedule area includes
  Washington, D.C.; Prince George's and Montgomery Counties in Maryland;
  and Fairfax and Arlington Counties and the City of Alexandria in      
  Virginia.                                                             
                                                                        
Note: Work GPCI is the \1/4\ work GPCI required by Section              
  1848(e)(1)(A)(iii) of the Social Security Act.                        
GPCI is rescaled by the following factors to assure budget neutrality:  
  Work=1.00073; Practice expense=1.00125; Malpractice=1.02307.          


             Addendum G.--Reference Set With 1994 Work RVUs             
------------------------------------------------------------------------
       HCPCS*           Work RVU             Description (short)        
------------------------------------------------------------------------
11200................         0.70  Removal of skin tags.               
11401................         1.28  Removal of skin lesion.             
11446................         4.49  Removal of skin lesion.             
11750................         1.68  Removal of nail bed.                
13101................         3.91  Repair of wound or lesion.          
17002................         0.19  Destruction of add'l lesion.        
19140................         4.95  Removal of breast tissue.           
20610................         0.80  Drain/inject joint/bursa.           
22600................        18.25  Neck spine fusion.                  
25605................         5.42  Treat fracture radius/ulna.         
26055................         2.59  Incise finger tendon sheath.        
27130................        18.89  Total hip replacement.              
27235................        11.14  Repair of thigh fracture.           
27244................        14.51  Repair of thigh fracture.           
27447................        19.91  Total knee replacement.             
27590................        10.35  Amputate leg at thigh.              
29881................         7.54  Knee arthroscopy/surgery.           
30115................         4.30  Removal of nasal polyp(s).          
31500................         2.36  Insert emergency airway.            
31505................         0.62  Diagnostic laryngoscopy.            
31575................         1.11  Diagnostic laryngoscopy.            
31622................         2.83  Diagnostic bronchoscopy.            
31625................         3.41  Bronchoscopy with biopsy.           
32000................         1.56  Drainage of chest.                  
32020................         4.02  Insertion of chest tube.            
32100................        10.18  Exploration/biopsy of chest.        
33870................        38.16  Transverse aortic arch graft.       
35081................        22.40  Repair defect of artery.            
35301................        16.13  Rechanneling of artery.             
35371................        10.61  Rechanneling of artery.             
35656................        14.01  Artery bypass graft.                
36620................         1.16  Insertion catheter, artery.         
37140................        22.40  Revision of circulation.            
37609................         2.30  Temporal artery procedure.          
38300................         1.50  Drainage lymph node lesion.         
41100................         1.60  Biopsy of tongue.                   
43450................         1.40  Dilate esophagus.                   
43832................        10.80  Place gastrostomy tube.             
44130................        11.21  Bowel to bowel fusion.              
44950................         6.13  Appendectomy.                       
45110................        21.92  removal of rectum.                  
45305................         1.02  Proctosigmoidoscopy; biopsy.        
46221................         1.40  Ligation of hemorrhoid(s).          
46936................         4.22  destruction of hemorrhoids.         
47100................         6.83  Wedge biopsy of liver.              
48150................        34.55  Partial removal of pancreas.        
52000................         2.03  Cystoscopy.                         
54161................         3.26  Circumcision.                       
55700................         1.59  Biopsy of prostate.                 
58120................         2.48  Dilation and curettage (d&c).       
58150................        13.14  Total hysterectomy.                 
58260................        11.52  Vaginal hysterectomy.               
58720................         6.27  Removal of ovary/tubes(s).          
60220................         9.97  Partial removal of thyroid.         
60500................        15.57  Explore parathyroid glands.         
62270................         1.14  Spinal fluid tap, diagnostic.       
63047................        12.90  Removal of spinal lamina.           
63780................         6.29  Insert spinal canal catheter.       
64721................         4.03  Carpal tunnel surgery.              
65285................        12.19  Repair of eye wound.                
65730................        11.96  Corneal transplant.                 
65855................         4.70  Laser surgery of eye.               
66821................         2.81  After cataract laser surgery.       
67036................        11.46  Removal of inner eye fluid.         
67107................        14.15  Repair detached retina.             
67801................         1.87  Remove eyelid lesions.              
69433................         1.49  Creat eardrum opening.              
69641................        12.43  Revise middle ear & mastoid.        
70150................         0.26  X-ray exam of facial bones.         
70450................         0.86  cat scan of head or brain.          
70470................         1.28  Contrast cat scans of head.         
70551................          1.5  Magnetic image, brain (mri).        
71010................         0.18  Chest x-ray.                        
72020................         0.15  X-ray exam of spine.                
73620................         0.16  X-ray exam of foot.                 
76516................         0.55  Echo exam of eye.                   
76700................         0.82  Echo exam of abdomen.               
77425................         2.47  Weekly radiation therapy.           
78306................         0.87  Bone imaging, whole body.           
78465................         1.48  Heart image (3d) multiple.          
80500................         0.37  Lab pathology consultation.         
85060................         0.46  Blood smear interpretation.         
88300................         0.08  Surg path, gross.                   
88309................         2.31  Tissue exam by pathologist.         
90844................         1.74  Psychotherapy 45-50 min.            
91010................         1.67  Esophagus motility study.           
92225................         0.59  Special eye exam, initial.          
99201................         0.38  Office/outpatient visit, new.       
99202................         0.76  Office/outpatient visit, new.       
99204................         1.73  Office/outpatient visit, new.       
99205................         2.31  Office/outpatient visit, new.       
99211................         0.17  Office/outpatient visit, est.       
99212................         0.38  Office/outpatient visit, est.       
99213................         0.56  Office/outpatient visit, est.       
99214................         0.95  Office/outpatient visit, est.       
99215................         1.53  Office/outpatient visit, est.       
99221................         1.07  Initial hospital care.              
99222................         1.86  Initial hospital care.              
99223................          2.6  Initial hospital care.              
99231................         0.52  Subsequent hospital care.           
99232................         0.89  Subsequent hospital care.           
99233................         1.26  Subsequent hospital care.           
99251................         0.55  Initial inpatient consult.          
99252................         1.14  Initial inpatient consult.          
99253................         1.58  Initial inpatient consult.          
99254................          2.3  Initial inpatient consult.          
99255................         3.17  Initial Inpatient consult.          
99281................         0.28  Emergency dept visit.               
99282................         0.48  Emergency dept visit.               
99285................         2.66  Emergency dept visit.               
------------------------------------------------------------------------
*All numeric CPT HCPCS copyright 1993 American Medical Association.     


Addendum H.--Procedure Codes Subject to the Site-of-Service Differential
------------------------------------------------------------------------
  HCPCS                             Description                         
------------------------------------------------------------------------
10040....  Acne surgery.                                                
10060....  Drainage of skin abscess.                                    
10061....  Drainage of skin abscess.                                    
10080....  Drainage of pilonidal cyst.                                  
*10081...  Drainage of pilonidal cyst.                                  
10120....  Remove foreign body.                                         
10121....  Remove foreign body.                                         
10140....  Drainage of hematoma/fluid.                                  
10160....  Puncture drainage of lesion.                                 
11000....  Surgical cleansing of skin.                                  
11001....  Additional cleansing of skin.                                
11040....  Surgical cleansing, abrasion.                                
11041....  Surgical cleansing of skin.                                  
11050....  Trim skin lesion.                                            
11051....  Trim 2 to 4 skin lesions.                                    
11052....  Trim over 4 skin lesions.                                    
11100....  Biopsy of skin lesion.                                       
11101....  Biopsy, each added lesion.                                   
11200....  Removal of skin tags.                                        
11201....  Removal of added skin tags.                                  
11300....  Shave skin lesion.                                           
11301....  Shave skin lesion.                                           
11302....  Shave skin lesion.                                           
*11303...  Shave skin lesion.                                           
11305....  Shave skin lesion.                                           
11306....  Shave skin lesion.                                           
11307....  Shave skin lesion.                                           
*11308...  Shave skin lesion.                                           
11310....  Shave skin lesion.                                           
11311....  Shave skin lesion.                                           
11312....  Shave skin lesion.                                           
*11313...  Shave skin lesion.                                           
11400....  Removal of skin lesion.                                      
11401....  Removal of skin lesion.                                      
11402....  Removal of skin lesion.                                      
11403....  Removal of skin lesion.                                      
11420....  Removal of skin lesion.                                      
11421....  Removal of skin lesion.                                      
11422....  Removal of skin lesion.                                      
11423....  Removal of skin lesion.                                      
11440....  Removal of skin lesion.                                      
11441....  Removal of skin lesion.                                      
11442....  Removal of skin lesion.                                      
11443....  Removal of skin lesion.                                      
11600....  Removal of skin lesion.                                      
11601....  Removal of skin lesion.                                      
11602....  Removal of skin lesion.                                      
11603....  Removal of skin lesion.                                      
11620....  Removal of skin lesion.                                      
11621....  Removal of skin lesion.                                      
11622....  Removal of skin lesion.                                      
11623....  Removal of skin lesion.                                      
11640....  Removal of skin lesion.                                      
11641....  Removal of skin lesion.                                      
11642....  Removal of skin lesion.                                      
11643....  Removal of skin lesion.                                      
11700....  Scraping of 1-5 nails.                                       
11701....  Scraping of additional nails.                                
11710....  Scraping of 1-5 nails.                                       
11711....  Scraping of additional nails.                                
11730....  Removal of nail plate.                                       
11731....  Removal of second nail plate.                                
11732....  Removal of additional nail plate.                            
11740....  Drain blood from under nail.                                 
11750....  Removal of nail bed.                                         
*11752...  Remove nail bed/finger tip.                                  
11760....  Reconstruction of nail bed.                                  
11762....  Reconstruction of nail bed.                                  
11765....  Excision of nail fold, toe.                                  
11900....  Injection into skin lesions.                                 
11901....  Added skin lesion injections.                                
*12031...  Layer closure of wound(s).                                   
*12032...  Layer closure of wound(s).                                   
*12041...  Layer closure of wound(s).                                   
*12042...  Layer closure of wound(s).                                   
*12051...  Layer closure of wound(s).                                   
*12052...  Layer closure of wound(s).                                   
*15780...  Abrasion treatment of skin.                                  
*15781...  Abrasion treatment of skin.                                  
*15782...  Abrasion treatment of skin.                                  
*15783...  Abrasion treatment of skin.                                  
*15786...  Abrasion treatment of lesion.                                
*15787...  Abrasion, added skin lesions.                                
15851....  Removal of sutures.                                          
*15852...  Dressing change, not for burn.                               
16000....  Initial treatment of burn(s).                                
16010....  Treatment of burn(s).                                        
16020....  Treatment of burn(s).                                        
16025....  Treatment of burn(s).                                        
17000....  Destroy benign/premal lesion.                                
17001....  Destruction of add'l lesions.                                
17002....  Destruction of add'l lesions.                                
17010....  Destruction skin lesion(s).                                  
17100....  Destruction of skin lesion.                                  
17101....  Destruction of 2nd lesion.                                   
17102....  Destruction of add'l lesions.                                
17104....  Destruction of skin lesions.                                 
17105....  Destruction of skin lesions.                                 
*17106...  Destruction of skin lesions.                                 
*17107...  Destruction of skin lesions.                                 
*17110...  Destruction of skin lesions.                                 
17200....  Electrocautery of skin tags.                                 
17201....  Electrocautery added lesions.                                
17250....  Chemical cautery, tissue.                                    
*17260...  Destruction of skin lesions.                                 
*17261...  Destruction of skin lesions.                                 
*17262...  Destruction of skin lesions.                                 
*17263...  Destruction of skin lesions.                                 
*17264...  Destruction of skin lesions.                                 
*17266...  Destruction of skin lesions.                                 
*17270...  Destruction of skin lesions.                                 
*17271...  Destruction of skin lesions.                                 
*17272...  Destruction of skin lesions.                                 
*17273...  Destruction of skin lesions.                                 
*17274...  Destruction of skin lesions.                                 
*17276...  Destruction of skin lesions.                                 
*17280...  Destruction of skin lesions.                                 
*17281...  Destruction of skin lesions.                                 
*17282...  Destruction of skin lesions.                                 
*17283...  Destruction of skin lesions.                                 
*17284...  Destruction of skin lesions.                                 
*17286...  Destruction of skin lesions.                                 
*17304...  Chemosurgery of skin lesion.                                 
17305....  2nd stage chemosurgery.                                      
17306....  3rd stage chemosurgery.                                      
17307....  Followup skin lesion therapy.                                
17310....  Extensive skin chemosurgery.                                 
17340....  Cryotherapy of skin.                                         
17360....  Skin peel therapy.                                           
19000....  Drainage of breast lesion.                                   
*19001...  Drain added breast lesion.                                   
20000....  Incision of abscess.                                         
20500....  Injection of sinus tract.                                    
20520....  Removal of foreign body.                                     
20550....  Inj tendon/ligament/cyst.                                    
20600....  Drain/inject joint/bursa.                                    
20605....  Drain/inject joint/bursa.                                    
20610....  Drain/inject joint/bursa.                                    
20615....  Treatment of bone cyst.                                      
*20974...  Electrical bone stimulation.                                 
*21029...  Contour of face bone lesion.                                 
21030....  Removal of face bone lesion.                                 
*21031...  Remove exostosis, mandible.                                  
*21032...  Remove exostosis, maxilla.                                   
*21079...  Prepare face/oral prosthesis.                                
*21080...  Prepare face/oral prosthesis.                                
*21081...  Prepare face/oral prosthesis.                                
*21082...  Prepare face/oral prosthesis.                                
*21083...  Prepare face/oral prosthesis.                                
*21084...  Prepare face/oral prosthesis.                                
*21085...  Prepare face/oral prosthesis.                                
*21086...  Prepare face/oral prosthesis.                                
*21087...  Prepare face/oral prosthesis.                                
*21088...  Prepare face/oral prosthesis.                                
*21089...  Prepare face/oral prosthesis.                                
*21110...  Interdental fixation.                                        
*21499...  Head surgery procedure.                                      
*23031...  Drain shoulder bursa.                                        
*24200...  Removal of arm foreign body.                                 
24650....  Treat radius facture.                                        
25500....  Treat fracture of radius.                                    
*25530...  Treat fracture of ulna.                                      
*25600...  Treat fracture radius/ulna.                                  
*25622...  Treat wrist bone fracture.                                   
*25630...  Treat wrist bone fracture.                                   
*25650...  Repair writst bone fracture.                                 
26010....  Drainage of finger abscess.                                  
26600....  Treat metacarpal fracture.                                   
26720....  Treat finger fracture, each.                                 
*26725...  Treat finger fracture, each.                                 
*26740...  Treat finger fracture, each.                                 
28001....  Drainage of bursa of foot.                                   
28010....  Incision of toe tendon.                                      
*28011...  Incision of toe tendons.                                     
*28022...  Exploration of a foot joint.                                 
*28024...  Exploration of a toe joint.                                  
*28052...  Biopsy of foot joint lining.                                 
28108....  Removal of toe lesions.                                      
28124....  Partial removal of toe.                                      
28126....  Partial removal of toe.                                      
28153....  Partial removal of toe.                                      
28160....  Partial removal of toe.                                      
28190....  Removal of foot foreign body.                                
*28220...  Release of foot tendon.                                      
28230....  Incision of foot tendon(s).                                  
28232....  Incision of toe tendon.                                      
28234....  Incision of foot tendon.                                     
28270....  Release of foot contracture.                                 
28272....  Release of toe joint, each.                                  
*28430...  Treatment of ankle fracture.                                 
*28450...  Treat midfoot fracture, each.                                
*28455...  Treat midfoot fracture, each.                                
28470....  Treat metatarsal fracture.                                   
28475....  Treat metatarsal fracture.                                   
28490....  Treat big toe fracture.                                      
*28495...  Treat big toe fracture.                                      
28510....  Treatment of toe fracture.                                   
28515....  Treatment of toe fracture.                                   
*28530...  Treat sesamoid bone fracture.                                
*28540...  Treat foot dislocation.                                      
*28570...  Treat foot dislocation.                                      
*28600...  Treat foot dislocation.                                      
*28630...  Treat toe dislocation.                                       
*29015...  Application of body cast.                                    
*29020...  Application of body cast.                                    
*29025...  Application of body cast.                                    
*29035...  Application of body cast.                                    
*29049...  Application of shoulder cast.                                
29065....  Application of long arm cast.                                
29075....  Application of forearm cast.                                 
29085....  Apply hand/wrist cast.                                       
29105....  Apply long arm splint.                                       
29125....  Apply forearm splint.                                        
29126....  Apply forearm splint.                                        
29130....  Application of finger splint.                                
*29131...  Application of finger splint.                                
29200....  Strapping of chest.                                          
*29220...  Strapping of low back.                                       
29260....  Strapping of elbow or wrist.                                 
*29280...  Strapping of hand or finger.                                 
29345....  Application of long leg cast.                                
29355....  Application of long leg cast.                                
*29358...  Apply long leg cast brace.                                   
29365....  Application of long leg cast.                                
29405....  Apply short leg cast.                                        
29425....  Apply short leg cast.                                        
29435....  Apply short leg cast.                                        
29440....  Addition of walker to cast.                                  
*29450...  Application of leg cast.                                     
29515....  Application lower leg splint.                                
29520....  Strapping of hip.                                            
29540....  Strapping of ankle.                                          
29550....  Strapping of toes.                                           
29580....  Application of paste boot.                                   
*29590...  Application of foot splint.                                  
29700....  Removal/revision of cast.                                    
29705....  Removal/revision of cast.                                    
*29710...  Removal/revision of cast.                                    
*29715...  Removal/revision of cast.                                    
*29720...  Repair of body cast.                                         
*29730...  Windowing of cast.                                           
*29740...  Wedging of cast.                                             
*29750...  Wedging of clubfoot cast.                                    
*29850...  Knee arthroscopy/surgery.                                    
*30000...  Drainage of lose lesion.                                     
*30020...  Drainage of lose lesion.                                     
30100....  Intranasal biopsy.                                           
30110....  Removal of nose polyp(s).                                    
30200....  Injection treatment of nose.                                 
30210....  Nasal sinus therapy.                                         
*30220...  Insert nasal septal button.                                  
*30300...  Remove nasal foreign body.                                   
30901....  Control of nosebleed.                                        
31000....  Irrigation maxillary sinus.                                  
*31002...  Irrigation sphenoid sinus.                                   
*31040...  Exploration behind upper jaw.                                
31505....  Diagnostic laryngoscopy.                                     
31575....  Diagnostic laryngoscopy.                                     
*31579...  Diagnostic laryngoscopy.                                     
*33415...  Revision, subvalvular tissue.                                
*33420...  Revision of mitral valve.                                    
*36000...  Place needle in vein.                                        
36400....  Drawing blood.                                               
*36405...  Drawing blood.                                               
*36406...  Drawing blood.                                               
*36410...  Drawing blood.                                               
*36430...  Blood transfusion service.                                   
*36450...  Exchange transfusion service.                                
36470....  Injection therapy of vein.                                   
36471....  Injection therapy of veins.                                  
*36510...  Insertion of catheter, vein.                                 
40490....  Biopsy of lip.                                               
*40700...  Repair cleft lip/nasal.                                      
*40800...  Drainage of mouth lesion.                                    
*40804...  Removal foreign body, mouth.                                 
40808....  Biopsy of mouth lesion.                                      
40810....  Excision of mouth lesion.                                    
40812....  Excise/repair mouth lesion.                                  
41100....  Biopsy of tongue.                                            
41108....  Biopsy of floor of mouth.                                    
*41825...  Excision of gum lesion.                                      
*41826...  Excision of gum lesion.                                      
42100....  Biopsy of roof of mouth.                                     
42330....  Removal of salivary stone.                                   
*42400...  Biopsy of salivary gland.                                    
42650....  Dilation of salivary duct.                                   
*42660...  Dilation of salivary duct.                                   
42800....  Biopsy of throat.                                            
*43420...  Repair esophagus opening.                                    
45300....  Proctosigmoidoscopy.                                         
45303....  Proctosigmoidoscopy.                                         
45330....  Sigmoidoscopy, diagnostic.                                   
*45520...  Treatment of rectal prolapse.                                
46083....  Incise external hermorrhoid.                                 
46221....  Ligation of hemorrhoid(s).                                   
46230....  Removal of anal tabs.                                        
46320....  Removal of hemorrhoid clot.                                  
46500....  Injection into hemorrhoids.                                  
46600....  Diagnostic anoscopy.                                         
46604....  Anoscopy and dilation.                                       
*46606...  Anoscopy and biopsy.                                         
46614....  Anoscopy; control bleeding.                                  
46615....  Anoscopy.                                                    
46900....  Destruction, anal lesion(s).                                 
*46910...  Destruction, anal lesion(s).                                 
*46916...  Cryosurgery, anal lesion(s).                                 
*46917...  Laser surgery, anal lesion(s).                               
46934....  Destruction of hemorrhoids.                                  
*46935...  Destruction of hemorrhoids.                                  
46936....  Destruction of hemorrhoids.                                  
*46940...  Treatment of anal fissure.                                   
*46942...  Treatment of anal fissure.                                   
46945....  Ligation of hemorrhoids.                                     
*46946...  Ligation of hemorrhoids.                                     
51700....  Irrigation of bladder.                                       
51705....  Change of bladder tube.                                      
51720....  Treatment of bladder lesion.                                 
*52265...  Cystoscopy & treatment.                                      
*53270...  Removal of urethra gland.                                    
53600....  Dilate urethra stricture.                                    
53601....  Dilate urethra stricture.                                    
53620....  Dilate urethra stricture.                                    
53621....  Dilate urethra stricture.                                    
53660....  Dilation of urethra.                                         
53661....  Dilation of urethra.                                         
53670....  Insert urinary catheter.                                     
*54050...  Destruction, penis lesion(s).                                
*54055...  Destruction, penis lesion(s).                                
*54056...  Cryosurgery, penis lesion(s).                                
*54200...  Treatment of penis lesion.                                   
*54230...  Prepare penis study.                                         
54235....  Penile injection.                                            
55000....  Drainage of hydrocele.                                       
*55250...  Removal of sperm duct(s).                                    
*56420...  Drainage of gland abscess.                                   
56501....  Destruction, vulva lesion(s).                                
*56606...  Biopsy of vulva/perineum.                                    
*57061...  Destruction, vagina lesion(s).                               
57100....  Biopsy of vagina.                                            
57150....  Treat vagina infection.                                      
57160....  Insertion of pessary.                                        
*57170...  Fitting of diaphragm/cap.                                    
57452....  Examination of vagina.                                       
57454....  Vagina examination & biopsy.                                 
*57460...  Leep procedure.                                              
57500....  Biopsy of cervix.                                            
57505....  Endocervical curettage.                                      
57510....  Cauterization of cervix.                                     
57511....  Cryocautery of cervix.                                       
58100....  Biopsy of uterus lining.                                     
*58300...  Insert intrauterine device.                                  
*58301...  Remove intrauterine device.                                  
*59200...  Insert cervical dilator.                                     
*59300...  Episiotomy or vaginal repair.                                
59425....  Antepartum care only.                                        
59426....  Antepartum care only.                                        
*59430...  Care after delivery.                                         
60100....  Biopsy of thyroid.                                           
*61000...  Remove cranial cavity fluid.                                 
*61001...  Remove cranial cavity fluid.                                 
*63690...  Analysis of neuroreceiver.                                   
*63691...  Analysis of neuroreceiver.                                   
64400....  Injection for nerve block.                                   
64405....  Injection for nerve block.                                   
*64408...  Injection for nerve block.                                   
*64412...  Injection for nerve block.                                   
64413....  Injection for nerve block.                                   
64418....  Injection for nerve block.                                   
*64435...  Injection for nerve block.                                   
64440....  Injection for nerve block.                                   
64441....  Injection for nerve block.                                   
64445....  Injection for nerve block.                                   
64450....  Injection for nerve block.                                   
64505....  Injection for nerve block.                                   
*64508...  Injection for nerve block.                                   
64550....  Apply neurostimulator.                                       
*64553...  Implant neuroelectrodes.                                     
*64555...  Implant neuroelectrodes.                                     
*64560...  Implant neuroelectrodes.                                     
64565....  Implant neuroelectrodes.                                     
*64612...  Destroy nerve, face muscle.                                  
*64613...  Destroy nerve, spine muscle.                                 
65205....  Remove foreign body from eye.                                
65210....  Remove foreign body from eye.                                
65220....  Remove foreign body from eye.                                
65222....  Remove foreign body from eye.                                
*65286...  Repair of eye wound.                                         
65430....  Corneal smear.                                               
65435....  Curette/treat cornea.                                        
*65436...  Curette/treat cornea.                                        
*65600...  Revision of cornea.                                          
*65772...  Correction of astigmatism.                                   
*65855...  Laser surgery of eye.                                        
*65860...  Incise inner eye adhesions.                                  
66761....  Revision of iris.                                            
*66770...  Removal of inner eye lesion.                                 
67145....  Treatment of retina.                                         
67210....  Treatment of retinal lesion.                                 
67228....  Treatment of retinal lesion.                                 
*67345...  Destroy nerve of eye muscle.                                 
67505....  Inject/treat eye socket.                                     
67515....  Inject/treat eye socket.                                     
67700....  Drainage of eyelid abscess.                                  
*67710...  Incision of eyelid.                                          
67800....  Remove eyelid lesion.                                        
67801....  Remove eyelid lesions.                                       
*67805...  Remove eyelid lesions.                                       
67810....  Biopsy of eyelid.                                            
67820....  Revise eyelashes.                                            
67825....  Revise eyelashes.                                            
67840....  Remove eyelid lesion.                                        
67850....  Treat eyelid lesion.                                         
*67915...  Repair eyelid defect.                                        
*67922...  Repair eyelid defect.                                        
*67930...  Repair eyelid wound.                                         
*67938...  Remove eyelid foreign body.                                  
68020....  Incise/drain eyelid lining.                                  
*68040...  Treatment of eyelid lesions.                                 
*68100...  Biopsy of eyelid lining.                                     
68110....  Remove eyelid lining lesion.                                 
*68135...  Remove eyelid lining lesion.                                 
68200....  Treat eyelid by injection.                                   
*68400...  Incise/drain tear gland.                                     
*68420...  Incise/drain tear sac.                                       
68440....  Incise tear duct opening.                                    
*68530...  Clearance of tear duct.                                      
*68705...  Revise tear duct opening.                                    
68760....  Close tear duct opening.                                     
68761....  Close tear duct opening.                                     
*68770...  Close tear system fistula.                                   
68800....  Dilate tear duct opening(s).                                 
68820....  Explore tear duct system.                                    
68830....  Reopen tear duct channel.                                    
68840....  Explore/irrigate tear ducts.                                 
69000....  Drain external ear lesion.                                   
*69005...  Drain external ear lesion.                                   
69020....  Drain outer ear canal lesion.                                
69100....  Biopsy of external ear.                                      
*69105...  Biopsy of external ear canal.                                
69200....  Clear outer ear canal.                                       
69210....  Remove impacted ear wax.                                     
69220....  Clean out mastoid cavity.                                    
69222....  Clean out mastoid cavity.                                    
69400....  Inflate middle ear canal.                                    
69401....  Inflate middle ear canal.                                    
*69405...  Catheterize middle ear canal.                                
*69410...  Inset middle ear baffle.                                     
69420....  Incision of eardrum.                                         
69433....  Create eardrum opening.                                      
*69540...  Remove ear lesion.                                           
69610....  Repair of eardrum.                                           
*69949...  Inner ear surgery procedure.                                 
*69979...  Temporal bone surgery.                                       
*90749...  Immunization procedure.                                      
92002....  Eye exam, new patient.                                       
92004....  Eye exam, new patient.                                       
92012....  Eye exam established pt.                                     
92014....  Eye exam & treatment.                                        
*92019...  Eye exam & treatment.                                        
92020....  Special eye evaluation.                                      
92070....  Fitting of contact lens.                                     
92100....  Serial tonometry exam(s).                                    
92120....  Tonography & eye evaluation.                                 
92130....  Water provocation tonography.                                
92140....  Glaucoma provocative tests.                                  
92225....  Special eye exam, initial.                                   
92226....  Special eye exam, subsequent.                                
92230....  Eye exam with photos.                                        
*92260...  Ophthalmoscopy/dynamometry.                                  
*92287...  Internal eye photography.                                    
92311....  Contact lens fitting.                                        
92312....  Contact lens fitting.                                        
*92313...  Contact lens fitting.                                        
*92315...  Prescription of contact lens.                                
*92316...  Prescription of contact lens.                                
*92317...  Prescription of contact lens.                                
*92330...  Fitting of artificial eye.                                   
*92335...  Fitting of artificial eye.                                   
92352....  Special spectacles fitting.                                  
92353....  Special spectacles fitting.                                  
*92354...  Special spectacles fitting.                                  
*92371...  Repair & adjust spectacles.                                  
92504....  Ear microscopy examination.                                  
92506....  Speech & hearing evaluation.                                 
92507....  Speech/hearing therapy.                                      
*92508...  Speech/hearing therapy.                                      
92511....  Nasopharyngoscopy.                                           
*92512...  Nasal function studies.                                      
92516....  Facial nerve function test.                                  
*92520...  Laryngeal function studies.                                  
*92565...  Stenger test, pure tone.                                     
*92571...  Filtered speech hearing test.                                
*92575...  Sensorineural acuity test.                                   
*92576...  Synthetic sentence test.                                     
*92577...  Stenger test, speech.                                        
*92582...  Conditioning play audiometry.                                
*93205...  Special phonocardiogram.                                     
*93221...  Vectorcardiogram tracing.                                    
*93721...  Plethysmography tracing.                                     
93797....  Cardiac rehab.                                               
93798....  Cardiac rehab/monitor.                                       
*95010...  Sensitivity skin tests.                                      
*95015...  Sensitivity skin tests.                                      
*95056...  Photosensitivity tests.                                      
*95065...  Nose allergy test.                                           
*95075...  Ingestion challenge test.                                    
*95180...  Rapid desensitization.                                       
95831....  Limb muscle testing, manual.                                 
95832....  Hand muscle testing, manual.                                 
95833....  Body muscle testing, manual.                                 
95834....  Body muscle testing, manual.                                 
95851....  Range of motion measurements.                                
95852....  Range of motion measurements.                                
95857....  Tensilon test.                                               
*95880...  Cerebral aphasia testing.                                    
*95881...  Cerebral developmental test.                                 
96405....  Intralesional chemo admin.                                   
96406....  Intralesional chemo admin.                                   
*96445...  Chemotherapy, intracavitary.                                 
*96450...  Chemotherapy, into cns.                                      
*96542...  Chemotherapy injection.                                      
*97221...  Extended hydrotherapy.                                       
99201....  Office/outpatient visit, new.                                
99202....  Office/outpatient visit, new.                                
99203....  Office/outpatient visit, new.                                
99204....  Office/outpatient visit, new.                                
99205....  Office/outpatient visit, new.                                
99211....  Office/outpatient visit, est.                                
99212....  Office/outpatient visit, est.                                
99213....  Office/outpatient visit, est.                                
99214....  Office/outpatient visit, est.                                
99215....  Office/outpatient visit, est.                                
99241....  Office consultation.                                         
99242....  Office consultation.                                         
99243....  Office consultation.                                         
99244....  Office consultation.                                         
99245....  Office consultation.                                         
99271....  Confirmatory consultation.                                   
99272....  Confirmatory consultation.                                   
99273....  Confirmatory consultation.                                   
99274....  Confirmatory consultation.                                   
99354....  Prolonged service, office.                                   
99355....  Prolonged service, office.                                   
A2000....  Chiropractor manip of spine.                                 
H5300....  Occupational therapy.                                        
M0005....  Off visit 2/more modalities.                                 
M0006....  Off vis 1 modality + 15 min.                                 
M0007....  Off vis comb modality 30 min.                                
M0008....  Off vis comb modality 15 min.                                
M0101....  Cutting/remov corns/calluses.                                
------------------------------------------------------------------------
*Proposed addition to the site-of-service list.                         

[FR Doc. 94-15234 Filed 6-23-94; 8:45 am]
BILLING CODE 4120-01-P