[Federal Register Volume 61, Number 87 (Friday, May 3, 1996)]
[Notices]
[Pages 19992-20067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10902]




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Part IV





Department of Health and Human Services





_______________________________________________________________________



Health Care and Financing Administration



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Medicare Program; Five-Year Review of Work Relative Value Units Under 
the Physician Fee Schedule; Notice

  Federal Register / Vol. 61, No. 87 / Friday, May 3, 1996 / Notices  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[BPD-846-PN]
RIN 0938-AH38


Medicare Program; Five-Year Review of Work Relative Value Units 
Under the Physician Fee Schedule

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

ACTION: Proposed notice.

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SUMMARY: This proposed notice discusses changes to work relative value 
units (RVUs) affecting payment for physician services. Section 
1848(c)(2)(B)(i) of the Social Security Act requires that we review all 
work RVUs no less often than every 5 years. Since we implemented the 
physician fee schedule effective for services furnished beginning 
January 1, 1992, we have initiated the 5-year review of work RVUs that 
will be effective for services furnished beginning January 1, 1997.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on July 2, 
1996.

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-846-PN, P.O. Box 7519, 
Baltimore, MD 21207-0519.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., 
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-846-PN. 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) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8. 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.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available on a Wide 
Area Information Server (WAIS) through the Internet and via 
asynchronous dial-in. Internet users can access the database by using 
the World Wide Web; the Superintendent of Documents home page address 
is http://www.access.gpo.gov/su____docs/, by using local WAIS client 
software, or by telnet to swais.access.gpo.gov, then login as guest (no 
password required). Dial-in users should use communications software 
and modem to call (202) 512-1661; type swais, then login as guest (no 
password required). For general information about GPO Access, contact 
the GPO Access User Support Team by sending Internet e-mail to 
[email protected]; by faxing to (202) 512-1262; or by calling 
(202) 512-1530 between 7 a.m. and 5 p.m. Eastern time, Monday through 
Friday, except for Federal holidays.

FOR FURTHER INFORMATION CONTACT: Elizabeth Holland, (410) 786-1309.

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

Table of Contents

I. Background
    A. Legislative Requirements
    B. Published Changes to the Physician Fee Schedule
    C. Summary of the Development of Physician Work Relative Value 
Units
    D. Scope of the Review
II. Discussion of Comments and Decisions
    A. Review of Comments (Includes Table 1--Five-Year Review of 
Work Relative Value Units)
    B. Discussion of Comments by Clinical Area
    1. Integumentary System
    2. Orthopaedic Surgery
    3. Otolaryngology and Maxillofacial Surgery
    4. Podiatry
    5. Cardiology and Interventional Radiology
    6. General Surgery, Colon and Rectal Surgery, and 
Gastroenterology
    7. Urology
    8. Gynecology
    9. Neurosurgery
    10. Ophthalmology
    11. Imaging
    12. Cardiothoracic and Vascular Surgery
    13. Pathology and Laboratory Procedures
    14. Psychiatry
    15. Other Medical and Therapeutic Services
    16. Speech/Language/Hearing
    C. Other Comments
    1. Evaluation and Management Services (Includes Table 2--
Evaluation and Management Codes; Five-Year Review--Proposed Relative 
Value Units)
    2. Review of Studies by Abt Associates, Inc.
    3. Pediatrics
    4. Anesthesia
    5. Codes Without Work Relative Value Units
    6. Codes Referred to the Physicians' Current Procedural 
Terminology Editorial Panel (Includes Table 3--Codes Referred to the 
Physicians' Current Procedural Terminology Editorial Panel)
    7. Potentially Overvalued Services
    D. Other Issues
    1. Budget Neutrality
    2. Calculation of Practice Expense and Malpractice Expense 
Relative Value Units
    3. Impact of Work Relative Value Unit Changes for Evaluation and 
Management Services on Work Relative Value Units for Global Surgical 
Services
    4. Proposal for Future Review
    5. Nature and Format of Comments on Work Relative Value Units
III. Collection of Information Requirements
IV. Response to Comments
V. Regulatory Impact Analysis
    A. Regulatory Flexibility Act
    B. Effects on Physician Payments
    1. Impact Estimation Methodology
    2. Overall Fee Schedule Impact
    3. Specialty Level Effect (Includes Table 4--Five-Year Review 
Impact on Medicare Payments by Specialty)
    C. Rural Hospital Impact Statement Addendum--Codes Subject to 
Comment

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

AMA American Medical Association
CPT [Physicians'] Current Procedural Terminology [4th Edition, 1996, 
copyrighted by the American Medical Association]
HCFA Health Care Financing Administration
HCPCS HCFA Common Procedure Coding System
IWPUT Intraservice work per unit time
RUC [American Medical Association Specialty Society] Relative 
[Value] Update Committee
RVU Relative value unit

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I. Background

A. Legislative Requirements

    The Medicare program was established in 1965 by the addition of 
title XVIII to the Social Security Act (the Act). Since January 1, 
1992, Medicare pays for physician services under section 1848 of the 
Act, ``Payment for Physicians' Services.'' This section contains three 
major elements: (1) A fee schedule for the payment of physician 
services; (2) a Medicare volume performance standard for the rates of 
increase in Medicare expenditures for physician 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 expense.
    Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments 
in RVUs because of changes resulting from a review of those RVUs may 
not cause total physician fee schedule payments to differ by more than 
$20 million from what they would have been had the adjustments not been 
made. If this tolerance is exceeded, we must make adjustments to 
preserve budget neutrality.

B. Published Changes to the Physician Fee Schedule

    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 
physician 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's) Physicians' Current Procedural Terminology (CPT) 
through an ``interim RVU'' process every year. The updates to the RVUs 
and fee schedule policies follow:
     September 15, 1992, as a correction notice for the 1992 
physician fee schedule (57 FR 42491).
     November 25, 1992, as a final notice with comment period 
on new and revised RVUs only for the 1993 physician fee schedule (57 FR 
55914).
     June 7, 1993, as a correction notice for the 1993 
physician fee schedule (58 FR 31964).
     December 2, 1993, as a final rule with comment period (58 
FR 63626) announcing revised payment policies and RVUs for 1994. (We 
solicited comments on new and revised RVUs only. There were two 
correction notices published for the 1994 physician fee schedule (July 
15, 1994, 59 FR 36069) and (August 4, 1994, 59 FR 39828).)
     December 8, 1994, as a final rule with comment period (59 
FR 63410) to revise the geographic adjustment factor values, fee 
schedule payment areas, and payment policies and RVUs for 1995. The 
final rule also discussed the process for periodic review and 
adjustment of RVUs not less frequently than every 5 years as required 
by section 1848(c)(2)(B)(i) of the Act. (There were two correction 
notices published for the 1995 physician fee schedule (January 3, 1995, 
60 FR 46) and (July 18, 1995, 60 FR 36733).)
     December 8, 1995, as a final rule with comment period (60 
FR 63124) to revise various policies affecting payment for physician 
services including Medicare payment for physician services in teaching 
settings, the RVUs for certain existing procedure codes, and to 
establish interim RVUs for new and revised procedure codes. The rule 
also included the final revised 1996 geographic practice cost indices.
    This proposed notice updates information in the final Federal 
Register documents listed above. It discusses changes to work RVUs 
affecting payment for physician services. Section 1848(c)(2)(B)(i) of 
the Act requires that we review all work RVUs no less often than every 
5 years. Since we implemented the physician fee schedule effective for 
services furnished beginning January 1, 1992, we have initiated the 5-
year review of work RVUs that will be effective for services furnished 
beginning January 1, 1997.

C. Summary of the Development of Physician Work Relative Value Units

    Development of the concepts and methodology underlying the 
physician fee schedule has been under way for a number of years. Based 
on Congressional mandates contained in the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (Public Law 99-272), the Omnibus Budget 
Reconciliation Act of 1986 (Public Law 99-509), and the Omnibus Budget 
Reconciliation Act of 1987 (Public Law 100-203), we began our effort to 
develop a physician fee schedule based on a relative value scale. We 
were assisted in this task by a number of experts inside and outside of 
government, including the research team at the Harvard University 
School of Public Health. The Harvard research team produced ``A 
National Study of Resource-Based Relative Value Scales for Physician 
Services'' (September 1988) and ``A National Study of Resource-Based 
Relative Value Scales for Physician Services Phase II'' (November 1990) 
under a cooperative agreement with us. Harvard's Phase III final report 
was completed in December of 1991.
    A model fee schedule was published on September 4, 1990 as part of 
a notice with comment period (55 FR 36178). The addenda to the model 
fee schedule notice provided preliminary estimates of the RVUs 
associated with the approximately 1,400 services studied as part of the 
Harvard Phase I study. We provided a 60-day public comment period; 
comments received were considered carefully and were helpful to us in 
developing the proposed rule that was published in the Federal Register 
on June 5, 1991 (56 FR 25792).
    Based primarily on Phase II and some of Phase III of the Harvard 
study, the proposed rule contained RVUs for more than 4,000 services 
representing about 85 percent of Medicare payments. In Phase II, 15 
additional medical and surgical specialties were studied that were not 
studied in Phase I. In addition, seven Phase I specialties were 
restudied, with four of these restudies funded by the specialty 
societies. Not only did Phase II almost triple the number of services 
for which RVUs had been produced, but it refined the RVUs for many of 
the original 1,400 services.
    The final rule published on November 25, 1991 (56 FR 59502) was 
based primarily on Phases II and III of the Harvard study, which 
produced RVUs for all but about 400 of the remaining Medicare-covered 
services that required work RVUs. In Phase III, most of the 
extrapolated Phases I and II RVUs were replaced by RVUs that were 
generated by a small group survey process, and many preservice and 
postservice work estimates for Phases I and II work RVUs were revised. 
A few early Phase III results were available for inclusion in the 
proposed rule; additional Phase III results were provided to us in 
installments throughout 1991. We developed RVUs for roughly 400 
services that had not been surveyed by Harvard (generally low volume 
services or nonphysician services or services that were extrapolated by 
Harvard). Physician work RVUs were reviewed and developed by carrier 
medical directors, initially through a survey conducted by mail and 
subsequently through group meetings to refine the product of the survey 
process. Through a consensus or Delphi-type process, carrier medical 
directors rated physician work for the remaining services. In addition, 
a number of physician work RVUs were refined based on information 
provided as part of the

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comment process on the June 5, 1991 proposed rule.
    The AMA Specialty Society Relative Value Update Committee (RUC) was 
formed in November 1991 and grew out of a series of discussions between 
the AMA and the major national medical specialty societies. The 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 CPT Editorial Panel. The work of the 
RUC is supported by the RUC Advisory Committee made up of 
representatives of 65 specialty societies in the AMA's House of 
Delegates.
    The RUC currently makes recommendations to us on the assignment of 
RVUs for new and revised CPT codes. As we discussed in our December 8, 
1994 final rule with comment period, we shared comments we received on 
the 1995 work RVUs with the RUC (59 FR 63453). However, we retained the 
responsibility for analyzing the comments and developing this proposed 
notice.

D. Scope of the Review

    We initiated the 5-year review by soliciting public comments on all 
work RVUs for approximately 7,000 CPT/HCPCS (HCFA Common Procedure 
Coding System) codes published in our December 8, 1994 final rule (59 
FR 63410). We reviewed all timely comments received during the comment 
period for our December 8, 1994 final rule. We excluded two major areas 
of comments from the 5-year review. The first excluded area was 
comments that addressed work RVUs that were considered interim for 
1995. We considered these comments as a part of our annual review 
process, the results of which we published in the December 8, 1995 
final rule (60 FR 63124). The second major area we excluded was 
comments that addressed practice expense and malpractice expense RVUs. 
As we stated in the December 8, 1994 final rule (59 FR 63454), the 
scope of the 5-year review is limited to work RVUs.
    Three specialty societies (the American Academy of Orthopaedic 
Surgeons, the American Society of Anesthesiologists, and the American 
Academy of Otolaryngology - Head and Neck Surgery, Inc.) submitted 
studies conducted for them by Abt Associates, Inc., which spanned all 
of the more than 2,000 codes used by physicians in those specialties. 
We referred these studies to the RUC. The American Academy of 
Pediatrics submitted comments asserting that the physician work 
involved in furnishing 480 services to pediatric patients is different 
than the physician work involved in furnishing the same services to 
adult patients.
    After a preliminary screening, we referred approximately 3,500 
codes to the RUC for its review. The codes included those found in 
public comments (700 codes), the American Academy of Pediatrics 
comments (480 codes); three special studies by Abt Associates, Inc. 
(about 2,000 codes); and those we identified as potentially misvalued 
(300 codes).

II. Discussion of Comments and Decisions

A. Review of Comments

    During the comment period for our December 8, 1994 final rule (59 
FR 63410), we received more than 500 public comments on approximately 
1,100 codes. After review by our medical staff, we forwarded comments 
on approximately 700 codes for consideration by the RUC. Comments that 
we did not forward are listed in Table 1 and are identified by a code 
that explains our rejection of the comment. In addition, we forwarded 
comments on approximately 300 codes identified by us as potentially 
misvalued.
    Comments that we did not refer to the RUC generally fall into 
several categories:
     Comments that do not pertain to work RVUs or that are not 
sufficiently descriptive to be helpful in understanding why the 
existing RVUs are incorrect.
     Comments on services for which we have not assigned work 
RVUs because we have determined that the codes do not represent 
physician services or, in a few instances, because they represent 
either ``bundled'' or noncovered services.
     Comments that are similar to, or duplicate, other comments 
which we referred to the RUC.
    The process for evaluating codes included in the 5-year review 
involved the same basic methodology as the process for the annual 
physician fee schedule update, with some important changes. Because the 
5-year review involved evaluating the physician work of established 
codes with established work RVUs, we needed compelling arguments to 
support changes in the assignment of work RVUs. To gather evidence to 
support these arguments, in addition to comparing the total physician 
work involved in the services under review to key reference services, 
we asked commenters to provide a detailed comparison of the preservice, 
intraservice, and postservice time involved in the key reference 
services selected. For this purpose, for surgical procedures, we 
further divided postservice time into time on the day of the procedure, 
time in the intensive care unit, hospital visits, and office or other 
outpatient visits following discharge.
    We also requested comments regarding other elements of physician 
work, in addition to time, and the extent to which the service had 
changed over the last 5 years. We considered the commenters' statements 
regarding the complexity of each nontemporal component for the services 
under review and the services used as key references. The nontemporal 
components of work are the physician's mental effort and judgment, 
technical skill and physical effort, and stress resulting from the risk 
of mortality or iatrogenic harm to the patient. We also considered 
whether the service had changed over the past 5 years as the result of 
one of the following conditions: new technology that had become more 
familiar to physicians, the service having been furnished to patients 
who had more or less complex medical conditions, or a change in the 
site where the service had usually been furnished.
    The public comments addressed many CPT codes for evaluation and 
management services. Because we introduced the new codes for these 
services simultaneously with the Medicare physician fee schedule in 
1992 and because we have not revised them during the annual update 
process, their inclusion in the 5-year review presents the first 
opportunity for evaluating their relative physician work. In the public 
comments addressing these services, the major primary care specialty 
societies stated that the services had become more difficult than they 
were when the original Harvard resource-based relative value scale 
surveys were conducted in the late 1980's, due to factors such as 
decreasing lengths of hospital stay, increasing complexity of patients 
in inpatient and outpatient settings, documentation and case management 
requirements, and a better educated patient population that expects 
more information from physicians.
    For more than 1,000 codes included in the 5-year review, we divided 
the CPT codes into clinical groups and another group containing all the 
codes identified by the RUC as potentially overvalued services. 
(Additional codes from the Abt Associates, Inc. studies and from the 
American Academy of Pediatrics' comments are discussed in sections 
II.C.2. and II.C.3. of this notice, respectively.) In addition, the AMA 
is submitting approximately 65 CPT codes

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to its CPT Editorial Panel. The RUC was unable to recommend work RVUs 
for these codes because the services were not clearly described or 
could vary widely from patient to patient. We will address these codes 
in a future annual update of the physician fee schedule. The following 
is a categorization of our decisions and how they relate to the 
comments received from the public (including medical specialty 
societies) and the RUC:
     For 28 percent of the codes, we are proposing to increase 
the work RVUs.
     For 61 percent of the codes, we are proposing to maintain 
the current work RVUs. We are also proposing to maintain the values for 
the anesthesia codes.
     For 11 percent of the codes, we are proposing to decrease 
the work RVUs.
    Our proposed work RVUs agree with the RUC recommendations for 93 
percent of the codes. Table 1--Five-Year Review of Work Relative Value 
Units
    Table 1 lists the codes reviewed during the 5-year review. This 
table includes the following information:
     CPT/HCPCS (HCFA Common Procedure Coding System) code. This 
is the CPT or alphanumeric HCPCS code for a service.
     Modifier. A modifier -26 is shown if the work RVUs 
represent the professional component of the service.
     Description. This is an abbreviated version of the 
narrative description of the code.
     1995 work RVUs. The work RVUs that appeared in the 
December 8, 1994 final rule are shown for each reviewed code.
     Requested work RVUs. This column identifies the work RVUs 
requested by commenters. We received more than one comment on some 
codes, and, in a few of these cases, the commenters requested different 
RVUs. If the comment was sent to the RUC, the table lists the RVUs sent 
to the RUC. The letters ``CPT'' indicate that the commenter requested 
that the code be referred to the CPT Editorial Panel. For some codes, 
we received no specific RVU recommendations. Some of these codes are 
included in the review because of rank order anomaly issues within a 
family of codes. An asterisk indicates a code identified by the RUC as 
potentially overvalued. The RVUs shown have not been adjusted for 
budget neutrality.
     RUC recommendation. This column identifies the work RVUs 
recommended by the RUC. A letter in this column indicates that the 
comment was rejected and not sent to the RUC. An ``A'' indicates that 
the comment was covered by another comment. A ``B'' indicates that the 
comment was not helpful. A ``C'' indicates that no change was 
requested. A ``D'' indicates a misinterpretation of the code. An ``E'' 
indicates that the comment was withdrawn by the commenter. The letters 
``CPT'' indicate that the RUC has referred this code to the CPT 
Editorial Panel for further clarification. A ``Z'' indicates that these 
services have no physician work and were not subject to the 5-year 
review. For a general discussion of these codes, see section II.C.5. 
(codes without work relative value units). The letters ``POS'' indicate 
that the code is potentially overvalued.
     HCFA Decision. This column indicates whether we agreed 
with the RUC recommendation (``agreed''); we are proposing work RVUs 
that are higher than the RUC recommendation (``increased''); or we are 
proposing work RVUs that are less than the RUC recommendation 
(``decreased''). Codes for which we did not accept the RUC 
recommendation are discussed in greater detail following Table 1. An 
(a) in this column indicates that in the absence of a RUC 
recommendation we are proposing to maintain the present work RVUs. A 
(b) in this column indicates that this code is being considered in the 
1996 refinement process.
     Proposed work RVUs. This column contains the proposed RVUs 
for physician work. The absence of proposed work RVUs indicates that 
comments on these codes were rejected or withdrawn and the work RVUs 
for these codes are not changing as a result of the 5-year review. The 
work RVUs shown have not been adjusted for budget neutrality.

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B. Discussion of Comments by Clinical Area

1. Integumentary System
    Comment: Numerous specialty societies surveyed and commented on the 
CPT codes for the integumentary system that they believed were 
undervalued or overvalued. In several instances, specialty societies 
were responding to reductions proposed by other commenters. The 
specialty societies' recommendations were supported with survey data 
and arguments that were based on changes in the patient population, 
changes in technology, and rank-order anomalies. Survey samples were of 
sufficient size to validate the results. Additionally, specialty 
societies made cross-specialty comparisons to similar procedures. The 
comparisons gave support to arguments and survey data.
    RUC Evaluation/Recommendation: Generally, the RUC found the data, 
comparisons, and arguments convincing. The RUC looked for compelling 
evidence that the procedure had changed, the patient population had 
changed, or the code had been originally undervalued or overvalued. 
When the RUC recommended different work RVUs, it typically attempted to 
reconcile new survey data and rationale with Harvard data, producing 
final recommended work RVUs. In all, the RUC recommended that the work 
RVUs for 6 codes be reduced in value, for 15 codes be increased in 
value, and for 35 codes be maintained at the current value.
    HCFA Decision: We agree with the RUC on most of its findings, but 
we have rejected the RUC recommendations for the following eight 
integumentary system codes:
    CPT codes 15570 through 15576 (Formation of direct or tubed 
pedicle, with or without transfer).
    There are four codes in this family that are used to report the 
formation of direct or tubed pedicles in different body areas. We 
received a comment that all of these codes are undervalued when 
compared to the corresponding adjacent flap codes, CPT code 14001 with 
7.78 work RVUs, CPT code 14021 with 9.37 work RVUs, and CPT code 14040 
with 7.18 work RVUs.
    In its recommendation to us, the RUC indicated that several old 
codes, CPT codes 15500 through 15515, which were valued by Harvard, 
were deleted in 1992 and replaced with CPT codes 15570 through 15576. 
The RUC also noted that the new codes are misvalued and that no 
explanation had been received describing how the work RVUs of these 
codes were determined. The current survey results show median work RVUs 
of 9.85 and a median intraservice time of 105 minutes for CPT code 
15570; median work RVUs of 9.63 and a median intraservice time of 90 
minutes for CPT code 15572; median work RVUs of 10.50 and a median 
intraservice time of 120 minutes for CPT code 15574; and median work 
RVUs of 8.50 and a median intraservice time of 90 minutes for CPT code 
15576. These results agree with the Harvard data for the original 
codes, CPT codes 15500 through 15515. Based on the survey results and 
the lack of rationale for the current work RVUs, the RUC recommended 
that the codes be valued at the same level established by Harvard for 
the original deleted codes.
    We have not accepted the RUC recommendations for two reasons. 
First, the RUC's understanding of the source of the work RVUs for the 
current codes is incorrect and second, we believe the vignettes that 
were surveyed may have led to an overestimation of the work.
    These four codes first appeared in CPT 1992, following a revision 
of this section of CPT. The codes do not correspond directly to the 
deleted codes (CPT codes 15500 through 15515) cited by the RUC because 
other codes (CPT codes 15540 through 15555 and 15700 through 15730) 
also were deleted and crosswalked to the new codes. Because we viewed 
the coding change as significant, we did not accept the work RVUs 
developed by Harvard for CPT codes 15500 through 15515 as a valid basis 
for the new codes. We proposed work RVUs for the current CPT codes 
15540 through 15555 in the November 25, 1991 final rule for the 1992 
physician fee schedule (56 FR 59502). Because the comments that we 
received suggested that the proposed work RVUs were too low, we 
referred the codes to one of the multispecialty refinement panels that 
met in May 1992. Based on the ratings of that panel, no changes were 
made in the work RVUs, and they became final work RVUs effective 
January 1, 1993.
    The vignettes that were surveyed by the RUC describe patient 
problems and services that we believe may have led to an overestimation 
of the work involved in the formation of direct or tubed pedicles. For 
example, the vignette for CPT code 15574 reads:

    A 56-year-old hunter sustains a gun shot injury to his left 
hand. He is brought to the hospital and initial debridement, 
fracture stabilization and temporary wound cover is accomplished 
with dressing changes. A tailored groin flap is planned for coverage 
of the dorsal defect. At operation, a random patterned groin flap is 
elevated. The hand is, again, thoroughly debrided and lavaged, and 
the groin flap is placed. The abdominal wound is closed by primary 
advancement of the abdominal skin. The postoperative care is routine 
until either further delay or separation occurs.

    The preservice work is described as including an assessment of the 
patient in the emergency room. The intraservice work is described as 
including the creation of a special dressing to maintain the relative 
positions of the hand, the flap, and the abdominal wall. We are 
concerned that the survey respondents may have considered the work of 
debridement, fracture stabilization, initial emergency room evaluation, 
and immobilization of the hand, flap, and abdomen in their estimates of 
work. If so, the work RVUs are excessive because those other services 
can be reported and paid separately. Therefore, we are maintaining the 
current work RVUs.
    CPT code 15580 (Cross finger flap, including free graft to donor 
site).
    We received a comment that this code is undervalued when compared 
to CPT code 15240 (Skin full graft procedure) and CPT code 15100 (Skin 
split graft procedure). It was argued that the current work RVUs do not 
account for the intraservice time and work involved in harvesting and 
applying the skin graft. Survey data showed a median intraservice time 
of 90 minutes and median work RVUs of 9.00. The RUC recommended that 
the work RVUs be increased based on the survey results and its 
conclusion that the comparison to skin graft procedures was 
appropriate.
    We have not proposed a change in the work RVUs for this code 
because we are concerned that CPT is not clear regarding the separate 
reporting of a graft to the donor site, and the vignette may have led 
to an overestimation of work. There is a note in the introductory 
paragraphs for the flap codes that states: ``Repair of donor site 
requiring skin graft or local flaps is considered an additional 
separate procedure.'' This contradicts the terminology of CPT code 
15580 and could be a source of confusion.

    The vignette that was used in the survey reads: A 36-year-old 
laborer sustains an avulsion injury of the volar aspect of the 
middle of phalanx of the left index finger in a grinding machine. 
The profundus tendon is intact and the neurovascular bundles are 
intact. At operation, a cross finger pedicle flap from the dorsum of 
the adjacent left middle phalanx is elevated and rotated downward 
and placed on the volar aspect of the adjacent finger. The donor 
site defect was reconstructed with a full thickness skin graft 
harvested from the left groin. Both the pedicle and the skin graft 
were sewn in place. The postoperative care is routine for that of a 
split thickness skin graft.


[[Page 20020]]


    The preservice work is described as including an assessment of the 
patient in the emergency room. The description of the intraservice work 
includes thorough debridement and immobilization of the fingers in a 
specially constructed dressing to remove tension from the flap by 
preventing motion.
    We are concerned that the survey respondents may have considered 
the work of debridement, initial emergency room evaluation, and 
immobilization of the fingers in their estimates of work. If so, the 
work RVUs are excessive because the other services can be reported 
separately. Therefore, we are maintaining the current work RVUs.
    CPT codes 17000, 17001, and 17002 (Destruction by any method of 
benign facial or premalignant lesions in any location).
    An individual who underwent the destruction of skin lesions 
commented that the physician charges for these procedures were 
excessive. He stated that the application of liquid nitrogen is not 
time consuming and is an insignificant cost and that the physician work 
involved is minimal and does not require great skill. We forwarded the 
comment to the RUC. The specialty society recommended to the RUC that 
the work RVUs for these codes be maintained.
    The RUC responded by indicating that the intention of the RUC and 
the 5-year review is to examine work RVUs. The RUC concluded that the 
comment we forwarded was based on charges the commenter incurred, a 
matter which is not directly related to the mission of the RUC. 
Therefore, the RUC recommended that the current work RVUs be 
maintained.
    We acknowledge that part of the individual's comments related to 
the charges he incurred. However, we believe that the commenter raised 
a legitimate concern about the amount of physician work when he made 
reference to the amount of time, physician involvement, and skill 
required to destroy a skin lesion. Therefore, we reexamined the work 
RVUs assigned to these codes and concluded they are too high when 
compared to other services on the fee schedule. CPT code 17000 
(Destruction of a single benign facial or premalignant lesion) 
currently has work RVUs that are approximately 3.5 times higher than 
the work RVUs assigned to the destruction of a second similar lesion 
(CPT code 17001). There are no other services with such a variance. A 
more appropriate valuation of CPT code 17000 would set the initial 
lesion destruction at about twice the level of the work RVUs for a 
subsequent lesion. Therefore, we are proposing 0.36 work RVUs. This 
downward revaluation of CPT code 17000 is supported by comparing the 
proposed work RVUs to the following reference services: CPT code 11700 
(Debridement of nails), with 0.32 work RVUs, and CPT code 11050 (Paring 
of skin lesion), with 0.43 work RVUs. These services are comparable to 
CPT code 17000 in terms of setup time, procedure time, risk, and 
aftercare.
    We also believe that CPT code 17001 (Destruction of second and 
third benign facial or premalignant lesion, each) and CPT code 17002 
(Destruction of over three lesions, each additional lesion) are 
overvalued. We propose to reduce the work RVUs of these codes to 0.14. 
The proposed work RVUs for these codes would maintain approximately the 
same ratio to CPT code 17101, with 0.11 work RVUs, and CPT code 17102, 
also with 0.11 work RVUs, as CPT code 17000, with 0.64 work RVUs, now 
has to CPT code 17100, with 0.53 work RVUs, that is, about 1.2. In 
other words, we believe the current relative relationship of work RVUs 
for the destruction of benign facial or premalignant lesions (CPT code 
17000) to the work RVU for the destruction of benign lesions in areas 
other than the face (CPT code 17100) is correct but the work RVUs are 
too high.
    Additionally, we are concerned that there is an inconsistency in 
the current CPT coding for these two groups of codes. For benign non-
facial lesion destruction, CPT code 17104 is only reported once for any 
number of lesions numbering 15 or more. There is not currently a 
parallel code for benign facial or premalignant lesions, and there is 
no limitation on the number of times CPT code 17002 can be reported for 
lesions removed during a single visit. Also, we did not receive 
comments on all of the destruction codes so we have not addressed in 
this notice other destruction of skin lesion codes that appear to be 
overvalued. We plan to address our concerns regarding the coding and 
work RVUs for those services in the future.
2. Orthopaedic Surgery
    Originally, the American Academy of Orthopaedic Surgeons submitted 
a study of 1,300 orthopaedic services conducted by Abt Associates, Inc. 
for review during the 5-year review. In addition, the American Academy 
of Orthopaedic Surgeons submitted detailed comments on 41 procedures. 
The Abt study involved a combination of a telephone survey of randomly 
selected orthopaedic surgeons and multiple consensus panels comprised 
of orthopaedic subspecialists and generalists. The American Academy of 
Orthopaedic Surgeons considered the work RVUs that resulted from the 
study to be much more appropriately aligned than the current work RVUs. 
In addition, the American Academy of Orthopaedic Surgeons believed that 
the work RVUs in the current scale are compressed at both the low and 
the high end, whereas the Abt values expand the scale in both 
directions.
    The American Academy of Orthopaedic Surgeons stated that the 
Harvard study underestimated the intraservice work of many of the 
services its members furnish. The commenter was particularly concerned 
that the work RVUs for many of the services are based on a survey of 
general orthopaedic surgeons with little or no experience performing 
highly specialized services normally provided by subspecialists within 
orthopaedic surgery, such as pediatric orthopaedic surgeons. For 
example, Harvard included general orthopaedic surgeons in the survey 
for CPT code 28262 (Capsulotomy, midfoot; extensive, including 
posterior talotibial capsulotomy and tendon(s) lengthening as for 
resistant clubfoot deformity) while the American Academy of Orthopaedic 
Surgeons surveyed pediatric orthopaedic surgeons with much more 
experience performing the procedure. The American Academy of 
Orthopaedic Surgeons' survey confirmed that the Harvard study had 
underestimated intraservice time.
    The RUC reviewed the methodology used by Abt and concluded that the 
RUC should consider a survey of representative codes using Abt's 
methodology to validate the relationship of the Abt-developed work RVUs 
to RUC-developed work RVUs. Instead, the American Academy of 
Orthopaedic Surgeons elected to withdraw the Abt study and the comments 
on 41 codes. The American Academy of Orthopaedic Surgeons also elected 
to conduct a survey of the work involved in 83 codes that it believed 
were misvalued in accordance with the RUC process. The American Academy 
of Orthopaedic Surgeons involved 11 national orthopaedic subspecialty 
organizations in this survey.
    The RUC reviewed and recommended increases in work RVUs for 37 of 
the 83 codes presented by the American Academy of Orthopaedic Surgeons. 
The RUC reviewed an additional 15 services based on comments from the 
American Academy of Pediatrics, the American Society of Plastic and 
Reconstructive Surgeons, and other commenters. In general, the RUC did 
not accept recommendations for increased work RVUs when the American 
Academy of

[[Page 20021]]

Orthopaedic Surgeons' survey time data were similar to Harvard data or 
when the reference services cited were not appropriate. The RUC 
recommended increased work RVUs to correct rank-order anomalies in 
codes for which the American Academy of Orthopaedic Surgeons' surveys 
confirm that the intraservice time for the procedure was underestimated 
in the Harvard study and the patient population had changed in the past 
5 years.
    The RUC also reviewed and recommended decreases for 10 of the 12 
following orthopaedic services, which the RUC identified as potentially 
overvalued based on special analyses of trends in claims data and the 
intensity (work per unit of time) of the intraservice work. This 
intensity of intraservice work is expressed as IWPUT, which is an 
acronym for intraservice work per unit time.

------------------------------------------------------------------------
  CPT                                                                   
  code                              Descriptor                          
------------------------------------------------------------------------
25065..  Biopsy, soft tissue of forearm and/or wrist; superficial.      
26992..  Incision, deep, with opening of bone cortex (e.g., for         
          osteomyelitis or bone abscess), pelvis and/or hip joint.      
27001..  Tenotomy, adductor of hip, subcutaneous, open.                 
27003..  Tenotomy, adductor, subcutaneous, open, with obturator         
          neurectomy.                                                   
27006..  Tenotomy, adductors of hip, subcutaneous, open (separate       
          procedure).                                                   
27040..  Biopsy, soft tissue of pelvis and hip area; superficial.       
27090..  Removal of hip prosthesis (separate procedure).                
27265..  Closed treatment of post hip arthroplasty dislocation; without 
          anesthesia.                                                   
27266..  Closed treatment of post hip arthroplasty dislocation;         
          requiring regional or general anesthesia.                     
27323..  Biopsy, soft tissue of thigh or knee area; superficial.        
27550..  Closed treatment of knee dislocation; without anesthesia.      
64763..  Transection or avulsion of obturator nerve, extrapelvic, with  
          or without adductor tenotomy.                                 
------------------------------------------------------------------------

    The description of, and rationale for, these decreases is included 
in section II.C.7. of this notice, which contains the discussion of the 
entire group of services identified as potentially overvalued.
    HCFA Decision: We have accepted all of the RUC recommendations for 
the orthopaedic surgery codes.
3. Otolaryngology and Maxillofacial Surgery
    The American Academy of Otolaryngology--Head and Neck Surgery, Inc. 
submitted a study conducted for it by Abt Associates, Inc. that covered 
800 codes, 417 of which are considered to be primary otolaryngology 
codes, and 100 of which were discussed in detailed comments for the 5-
year review. The 100 codes represent approximately 10 percent of the 
universe of otolaryngolog--head and neck surgery services. The comments 
reflect the opinions of about 40 American Academy of Otolaryngology--
Head and Neck Surgery, Inc. members with expertise in the services 
chosen. The American Academy of Oral and Maxillofacial Surgeons and the 
American Society of Plastic and Reconstructive Surgeons, Inc. also 
submitted comments and presented recommendations to the RUC for some of 
the codes discussed in this section.
    The RUC reviewed the methodology used by Abt and concluded that the 
RUC should consider a survey of representative codes using RUC 
methodology to validate the relationship of the Abt-developed work RVUs 
to the RUC-developed work RVUs. The American Academy of 
Otolaryngology--Head and Neck Surgery, Inc. surveyed and submitted 
recommendations for 53 codes using the RUC methodology. The survey 
response rate was low for many of the codes for which we originally 
received comments during the public comment phase and, therefore, the 
American Academy of Otolaryngology--Head and Neck Surgery, Inc. chose 
to withdraw these codes from the RUC review.
    The RUC was concerned by the lack of compelling evidence for 
changing many of the services presented by the American Academy of 
Otolaryngology--Head and Neck Surgery, Inc. and recommended that their 
current work RVUs be maintained. The RUC identified several problems 
with these services: Survey results for preservice and postservice time 
appeared to be overstated; inappropriate reference services with 
different global periods were used; the only arguments were that the 
patient population presented increased risk of HIV and hepatitis to the 
physician, the patients had previous radiation treatment, and 
acceptable vocal cord capability is now more important to patients. In 
addition, commenters made many recommendations to increase the current 
work RVUs, but the American Academy of Otolaryngology--Head and Neck 
Surgery, Inc. data were very similar to the Harvard time data. The RUC 
also did not find the argument that the IWPUT was understated, without 
any other evidence, a compelling reason to increase the work RVUs.
    The RUC recommended increased work RVUs for 30 codes to correct 
rank-order anomalies, address problems when American Academy of 
Otolaryngology--Head and Neck Surgery, Inc. surveys confirm that the 
intraservice time for the procedure was underestimated in the Harvard 
study, and when the patient population had changed in the past 5 years 
making the services more complex.
    HCFA decision: We have accepted the RUC recommendations for work 
RVUs for 24 of the codes but have rejected its recommendations for the 
following 6 codes: CPT code 21025 (Excision of bone, lower jaw).
    The current work RVUs are 5.03. A commenter recommended an increase 
to 8.98 work RVUs since this code is similar to CPT code 24134 (Removal 
of arm bone lesion). The RUC noted that a rank anomaly exists between 
this service and CPT code 21030 (Excision of benign tumor or cyst of 
facial bone other than mandible) and CPT code 21041 (Excision of benign 
cyst or tumor of mandible; complex). The American Academy of Oral and 
Maxillofacial Surgeons' survey median for intraservice time is 120 
minutes, which is significantly higher than CPT code 21041 and 
reference service CPT code 24134. Thus, the RUC recommended that the 
American Academy of Oral and Maxillofacial Surgeons' survey median of 
8.92 work RVUs be adopted.
    We believe that the surveyed vignette does not represent the 
typical patient, and it includes services for which other codes can be 
reported. The vignette describes a patient with intraoral and extraoral 
swelling and suppuration from multiple fistulae. Dissection of the 
inferior alveolar nerve is required and hyperbaric oxygen is initiated. 
We believe this vignette describes a patient with much more extensive 
infection than the typical patient. It is also our view that CPT code 
21030, which has 7.05 work RVUs, is more difficult than this procedure. 
Therefore, we are retaining the current 5.03 work RVUs for CPT code 
21025. CPT codes 31531, 31536, 31541, 31561, and 31571 (Operative 
laryngoscopies).
    We received comments that CPT codes 31541, 31561, and 31571 are 
undervalued because of increased patient complexity and greater 
emphasis on acceptable vocal results. The RUC did not find those 
arguments compelling enough to suggest a change in work RVUs.
    However, the RUC identified rank order anomalies in the work RVUs 
for direct laryngoscopies and the corresponding procedures using an 
operating microscope. Among the five

[[Page 20022]]

pairs of procedures, the difference in work RVUs for use of the 
operating microscope varies from -0.57 to +0.34 work RVUs. The RUC 
recommended retaining the 1995 work RVUs for the direct laryngoscopies 
(CPT codes 31530, 31535, 31540, 31560, and 31570) and adding a constant 
0.40 work RVUs to arrive at the work RVUs for the corresponding 
procedures using an operating microscope (CPT codes 31531, 31536, 
31541, 31561, and 31571).
    We disagree with the concept of increasing the work RVUs for 
procedures using an operating microscope and believe that the work RVUs 
for a procedure generally should be the same, regardless of the 
technique used. For example, the destruction of skin lesions (CPT codes 
17000 through 17105) are valued the same regardless of the method of 
destruction. Therefore, we have established work RVUs that are the same 
for both codes in a pair.
4. Podiatry
    The American Podiatric Medical Association submitted comments on 
services that its members frequently perform that may be 
inappropriately valued. The organization's comments were based on 
surveys of the members of the organization representing the spectrum of 
foot and ankle services, as well as geographic diversity. In addition, 
the organization relied on data from two previous national surveys on 
preservice and intraservice care prepared by the American Podiatric 
Medical Association for the Physician Payment Review Commission.
    The American Podiatric Medical Association submitted 
recommendations to the RUC for review in two formats: surveyed services 
with completed summary of recommendation forms and a letter detailing 
rationale for those services they did not survey. The Association also 
commented on 13 codes that it considers to be overvalued.
    RUC Evaluation/Recommendation: The RUC's position was that the 
American Podiatric Medical Association had not provided compelling 
evidence for changing the work RVUs for any of the services for which 
no survey was conducted. Neither did the RUC find surveys that only 
confirmed the Harvard survey times to be sufficient evidence to justify 
change. However, the survey data for CPT codes 28113 and 28288 and 
HCPCS code M0101 persuaded the RUC to recommend increases in the work 
RVUs for these services. The RUC also did not concur with the American 
Podiatric Medical Association's comment about overvalued procedures and 
recommended that the current work RVUs be maintained.
    HCFA Decision: We have accepted all but one of the RUC's 20 
recommendations for podiatry (19 resulting from the American Podiatric 
Medical Association's comments and one to maintain a rank order between 
codes): HCPCS code M0101 (Cutting or removal of corns).
    The current work RVUs are 0.37. A commenter recommended that we 
increase the work RVUs to 0.70 based on the view that this service is 
significantly more difficult than the work for CPT code 11050 (Paring 
or curettement of benign hyperkeratotic skin lesion with or without 
chemical cauterization (such as verrucae or clavi) not extending 
through the stratum corneum (e.g., callus or wart) with or without 
local anesthesia; single lesion), which is valued at 0.43 work RVUs, 
and CPT code 11700 (Debridement of nails, manual; five or less), which 
is valued at 0.32 work RVUs. The preservice work is slightly greater 
than reference procedures CPT codes 11050 and 11700, but the 
intraservice work was reported by a survey as 250 percent greater than 
either reference procedure. The commenter stated that the technical 
skill for these services is similar; however, physical effort is much 
greater for HCPCS code M0101. The RUC agreed that HCPCS code M0101 
involves more work than treating 2 skin lesions and trimming 10 
toenails and that this service is undervalued. It proposed 0.45 work 
RVUs. We disagree with these proposed work RVUs. The description of 
this service is ``cutting or removal of corns, calluses and/or trimming 
of nails, application of skin creams and other hygienic and preventive 
maintenance care (excludes debridement of nail(s).''
    We believe that the service most reported by this code is trimming 
of nails, which is of less intensity than the work associated with 
cutting or removal of corns and calluses. The typical service involves 
the less intense portions of this complex definition. The surveys 
conducted by the American Podiatric Medical Association used vignettes 
of patients with circulatory impairment and neurologic deficit 
accompanying systemic disease. The existence of these comorbid 
conditions may not accurately reflect the work RVUs for the typical 
patient. Although current Medicare coverage is restricted to the more 
difficult patients with coexisting disease, we base the work RVUs on 
the typical patient. The RUC survey methodology is based on vignettes 
that are intended to describe the typical patient and service. In this 
case, we believe the vignette describes an unusual or atypical patient 
which results in an RVU recommendation that exceeds the current work 
RVUs. We believe that the usual service of trimming of nails is less 
work than the paring or curettement of other less common procedures 
such as benign hyperkeratotic skin lesions and, therefore, have decided 
to maintain the current 0.37 work RVUs.
5. Cardiology and Interventional Radiology
    The RUC considered comments submitted by the Society of 
Cardiovascular and Interventional Radiology, the Society of Critical 
Care Medicine, and the American College of Cardiology on 25 cardiology 
and interventional radiology procedures.
    The Society of Cardiovascular and Interventional Radiology reported 
to the RUC that it did not conduct a RUC survey. The Society of 
Cardiovascular and Interventional Radiology sent a survey containing 
all of the interventional radiology codes to 60 interventional 
radiologists that asked the physicians to evaluate the 1995 work RVUs 
for each code and select those codes that they believed were misvalued. 
For the codes selected, the respondents were instructed to indicate 
which CPT code they believed more accurately described the service in 
terms of time and intensity. These responses were evaluated by a small 
working group formed by the Society of Cardiovascular and 
Interventional Radiology consisting of physicians that are familiar 
with CPT, work RVUs, and the RUC process. Those codes that were 
identified by the working group as misvalued were the codes upon which 
that society commented. In its comments to us and during the RUC 
presentation, the Society of Cardiovascular and Interventional 
Radiology mentioned that the physician work for vascular ultrasound 
studies is equal to all other diagnostic ultrasound services, including 
those in the abdomen, chest, pelvis, retroperitoneum, and heart. The 
work RVU recommendations are based on work RVUs for either ``limited'' 
or ``complete'' ultrasound examinations in those areas.
    HCFA Decision: We have accepted all but two of the RUC 
recommendations for the cardiology and interventional radiology codes: 
CPT codes 93307 and 93312, both for echo exam of heart.
    CPT code 93307 (Echocardiography, real-time with image 
documentation (2D) with or without M-Mode recording; complete).
    We received a comment that the field of echocardiography has 
changed significantly in the past 5 years, in both

[[Page 20023]]

clinical utility and diagnostic complexity. Although the technical 
innovations of the past 5 years have made this an easier service to 
perform, the patients that require this service are more complex, which 
has resulted in an increased amount of physician work. The physicians 
are viewing and making judgments on constantly moving objects, which 
increases the possibility of misinterpretation. Often this service is 
furnished in acute care settings or emergency situations, which 
increase physician stress. The information derived from this study is 
used in the development of critical management decisions. The risk of 
misdiagnosis, in both emergent and nonemergent situations, can lead to 
potentially fatal events.
    The current work RVUs for echocardiography are 0.78. The RUC agreed 
that the code is undervalued based on the amount of physician work that 
is required to perform this study and the increased amount of 
information that can now be derived from echocardiography. However, the 
RUC believed that the specialty society recommendation of 1.48 work 
RVUs was too high and recommended the Harvard value for this procedure, 
which was 1.06 work RVUs.
    We do not agree that echocardiography is undervalued. We believe 
that technical innovations have made physician interpretations of 
echocardiograms less difficult than in the past. We also believe that 
some of the work that is being reported as physician work is actually 
the work of technicians. For example, the description of intraservice 
work provided to the RUC implies that physicians review entire tapes 
and analyze and measure the structure and dynamics of the chambers, 
valves, and great vessels. It is our understanding that much of this 
information is prepared by technicians for subsequent review by 
physicians. We consider the work of technicians to be a practice 
expense that is reflected in the practice expense RVUs, not the 
physician work RVUs. We also question whether the vignette surveyed by 
the specialty society, which describes an echocardiogram performed on 
an acutely ill patient in need of emergency echocardiography, 
represents the typical patient requiring echocardiography. Medicare 
claims data from calendar year 1995 indicate that 50 percent of claims 
for CPT code 93307 are billed with place of service as office or 
outpatient hospital and 49 percent are billed with place of service as 
inpatient hospital. This suggests that the typical patient is not 
critically ill or that there is a bimodal distribution of patients.
    CPT code 93312 (Echocardiography, real-time with image 
documentation (2D) (with or without M-Mode recording), transesophageal; 
including probe placement, image acquisition, interpretation and 
report).
    We received a comment that transesophageal echocardiography is 
undervalued in comparison to other services that require similar 
physician work effort and that performance of this procedure requires 
considerable mental effort. As described above in the discussion of CPT 
code 93307, the heart is constantly moving, increasing the possibility 
of misinterpretation, which could lead to misdiagnosis. There is an 
added technical skill required by the physician to insert the probe 
into the esophagus and the stomach of a critically ill patient. This 
procedure is often performed in the emergency setting while the patient 
is under conscious sedation. As a point of reference, the RUC reviewed 
Harvard Phase III data that show 2.76 work RVUs (adjusted to be on a 
scale equivalent to 1995 work RVUs) for upper gastrointestinal 
endoscopy (CPT code 43235), the reference code being used in this 
comparison. These work RVUs are higher than both the existing 1.57 work 
RVUs and the 2.39 work RVUs recommended by the specialty society. The 
RUC agreed with the specialty society rationale and recommended an 
increase to 2.39 work RVUs.
    For reasons similar to those described above for CPT code 93307, we 
do not believe that transesophageal echocardiography is undervalued. 
This service was considered by a refinement panel in 1993, and, based 
on the ratings of the panel, the RVUs were not increased. We do not 
find the new evidence submitted by the RUC to be sufficient to warrant 
an increase in RVUs.
6. General Surgery, Colon and Rectal Surgery, and Gastroenterology
    The review of general surgery procedures primarily addressed 
comments submitted by the American College of Surgeons on codes 
identified as misvalued through a study conducted by Abt Associates, 
Inc. Although this study identified many procedures as potentially 
misvalued, the American College of Surgeons' comments selected only 30 
codes for review, based on the magnitude of the potential change and 
their frequency and expenditures. The American College of Surgeons 
recommended both increases and decreases.
    The American Society of General Surgeons also submitted comments on 
a number of procedures, including several general surgery procedures, 
and their suggestions were consistent with some of those made by the 
American College of Surgeons.
    The American Society of Colon and Rectal Surgeons submitted 
comments indicating that the partial colectomy codes and 
hemorrhoidectomy codes should be reviewed to place them in a more 
correct rank-order from least to most difficult. Other commenters also 
identified rank-order problems in these families and further identified 
three overvalued procedures. The American Society of General Surgeons 
recommended that the work RVUs for several colon and rectal procedures 
be increased.
    Comments were submitted by the American College of Gastroenterology 
and another commenter on several gastroenterology codes.
    Of the 30 codes on which the American College of Surgeons 
commented, the RUC recommended adopting most of the recommended 
decreases and a few of the recommended increases, based on results from 
a survey of 175 surgeons, comparisons to the final Harvard study 
results, comparisons to key reference services, and analysis of 
Medicare claims data.
    The current work RVUs for several of the codes identified by the 
American Society of General Surgeons, however, are based on recent RUC 
recommendations, and, in the absence of new evidence, the RUC did not 
believe reconsideration was warranted for these codes.
    The RUC agreed with most of the changes recommended by the American 
Society of Colon and Rectal Surgeons based on the evidence provided by 
the Society.
    The RUC did not believe compelling new evidence had been provided 
to support either an increase or a decrease in the work RVUs for the 
gastroenterology codes on which the American College of 
Gastroenterology commented. The RUC has previously reviewed most work 
RVUs for the gastroenterology procedures and has recently considered 
the evidence for adjusting these work RVUs and did not find the 
evidence to be persuasive.
    HCFA Decision: We have accepted all but one of the RUC 
recommendations for general surgery, colon and rectal surgery, and 
gastroenterology codes: CPT code 43830 (Place gastrostomy tube).
    The current work RVUs are 4.84. A commenter noted that an anomaly 
exists

[[Page 20024]]

between CPT code 43750 (Place gastrotomy tube), which is assigned 5.71 
work RVUs, and CPT code 43830 since the latter procedure is more 
complex. The commenter recommended 7.50 work RVUs. The RUC noted that 
the Harvard data indicate that the IWPUT for CPT code 43750 is 0.082, 
while it is 0.059 for CPT code 43830. Since CPT code 43830 is much more 
complex than CPT code 43750, the IWPUT is the reverse of the 
appropriate relationship. The RUC recommended 7.50 work RVUs for CPT 
code 43830.
    We relied on Harvard work RVUs to reestablish the proper 
relationship by accepting the decrease recommended by the RUC for CPT 
code 43750 and increasing CPT code 43830 to 6.52 work RVUs. We rejected 
the RUC recommendation of 7.50 work RVUs for CPT code 43830 as too high 
since this recommendation would value placement of a gastronomy tube 
higher than CPT code 49507 (Repair of an inguinal hernia), which is 
assigned 7.40 work RVUs and appear to approximate the work of placing a 
gastrostomy tube.
7. Urology
    Commenters advocated reductions in about 40 urology-related CPT 
codes. In most cases, commenters based their rationale on comparisons 
to cross-specialty procedures. Work RVUs were reduced to the level of 
the work RVUs of the cross-specialty procedure. The commenters also 
attempted to link the reduction of one code in a family to other codes 
in an effort to maintain the reduction of work RVUs throughout the 
family. Typically, the response of the American Urological Association 
was to survey the code and to refute the cross-specialty link 
established by the commenters. The rationale established by the 
American Urological Association was generally compelling in that it was 
based on anatomical, technical, and patient-population differences that 
proved the cross-specialty comparisons to be faulty. Usually, the 
American Urological Association's arguments were supported by survey 
data that validated their claims when compared to Harvard data. In many 
instances, surveyed intraservice time was greater than the Harvard data 
showed, and work RVUs turned out to be greater than established 1995 
work RVUs.
    RUC Evaluation/Recommendation: The RUC examined the American 
Urological Association's arguments against the cross-specialty links 
and proposed work RVU reductions. They evaluated the aspects of the 
arguments and typically came to the conclusion that the reference 
procedures chosen for comparison by the commenters were inappropriate. 
The RUC also analyzed survey data to determine if time and complexity 
measures were sufficient to support the arguments of the American 
Urological Association. The RUC also looked at time and complexity 
gains to ascertain if increased work RVUs were necessary. The basis for 
many of the comments was comparison between urology codes and codes in 
other specialties. As part of its review, the RUC compared several 
urology codes to other procedures on its multiple points of comparison 
reference set based on the IWPUT. The urology codes proved to be well 
within expected levels. For example, CPT code 50010 (Exploration of 
kidney) has an IWPUT of 0.094, which compares to CPT code 93510 (Left 
heart catheterization), with an IWPUT of 0.099; CPT code 26531 (Revise 
knuckle with implant), with an IWPUT of 0.090; CPT code 66984 (Remove 
cataract, insert lens), with an IWPUT of 0.121; or CPT code 61700 
(Inner skull vessel surgery), with an IWPUT of 0.088. CPT code 54200 
(Treatment of penis lesion) has an IWPUT of 0.038, which compares to 
CPT code 11642 (Removal of skin lesion), with an IWPUT of 0.047; CPT 
code 45110 (Removal of rectum), with an IWPUT of 0.061; or CPT code 
46260 (Hemorrhoidectomy), with an IWPUT of 0.049. Generally, the RUC 
found that the recommended reductions were not appropriate, but that 
rationale and data were also not sufficiently compelling to support 
specialty-recommended increased work RVUs. As a result, the RUC 
recommended that 37 of the 46 codes be maintained at 1995 levels.
    HCFA Decision: We have accepted all but three of the RUC 
recommendations for the urology codes: CPT code 50205 (Biopsy of 
kidney).
    The current work RVUs are 12.69. A commenter recommended a decrease 
to 6.75 work RVUs since the procedure requires no more work, time, or 
effort than CPT code 47100 (Wedge biopsy of liver), which is assigned 
6.75 work RVUs. In addition, the commenter argued, this procedure is 
incorrectly valued relative to kidney exploration; the biopsy should be 
lower than an exploration. The RUC noted that most renal biopsies are 
not open but percutaneous procedures; however, CPT code 50205 is an 
open procedure. Survey data show median intraservice time of 75 minutes 
and median work RVUs of 18.50. Although the American Urological 
Association recommended increasing the work RVUs up to the survey 
median, the RUC found no compelling evidence to increase the work RVUs.
    We rejected the RUC recommendation to retain the current work RVUs 
and have assigned 10.50 work RVUs, a value slightly greater than CPT 
code 50010 (Exploration of the kidney) to reflect the added work of the 
open procedure biopsy.
    CPT code 50590 (Lithotripsy, extracorporeal shock wave).
    The current work RVUs are 9.62. A commenter recommended a reduction 
to 6.54 work RVUs based on an argument that this is not a surgical 
procedure. The commenter compared the intraservice work to 1 hour of 
critical care. The proposed work RVUs also include two hospital visits 
(CPT codes 99221 and 99231) and 2.5 level-three office visits (CPT 
99213). The RUC believed that this procedure is similar to a surgical 
procedure in that anesthesia is used and a urologist is always present. 
The RUC concluded that the current work RVUs should not be reduced 
based on its analysis of survey data showing a median intraservice time 
of 80 minutes.
    We disagree with the RUC recommendation to maintain the 9.62 work 
RVUs. We believe the intraservice intensity of extracorporeal shock 
wave lithotripsy is more comparable to evaluation and management 
services than traditional surgical services. For example, the current 
9.62 work RVUs are higher than those for an exploratory laparotomy (CPT 
code 49000), with 8.99 work RVUs. We have assigned 7.13 work RVUs to 
CPT code 50590 based on 90 minutes of critical care (CPT codes 99291 
and 99292), with work RVUs of 3.64 and 1.84, respectively, and three 
mid-level office visits (CPT code 99213), with 0.55 work RVUs.
    CPT code 51741 (Electro-uroflowmetry, first).
    The current work RVUs are 1.57. A commenter recommended a reduction 
to 1.14 work RVUs to bring the code into correct alignment with the 
family of codes. The RUC recommended no change in the current work 
RVUs. We believe that a reduction in work RVUs to 1.14 is appropriate 
to maintain the proper relationship to CPT code 51736 (Urine flow 
measurement), which the RUC reduced from 0.84 work RVUs to 0.61 work 
RVUs.
8. Gynecology
    Comment: The American College of Obstetricians and Gynecologists 
has had significant and longstanding concerns about the accuracy of the 
work RVUs assigned for obstetric and gynecologic services. The American 
College of Obstetricians and Gynecologists believed that the work RVUs 
for services furnished to women have been historically undervalued when

[[Page 20025]]

compared to similar services on men or on similar anatomical 
structures. The American College of Obstetricians and Gynecologists 
presented survey data and arguments for 45 codes, 44 of which 
recommended increased work RVUs. In addition to providing survey data, 
the American College of Obstetricians and Gynecologists developed 
rationales based on a ``building block'' method using survey data on 
service characteristics and work RVUs of established codes. The 
building block method also uses preservice, postservice, and 
intraservice work intervals to assign physician work RVUs to the 
individual components of the global surgical services package. 
Appropriate work RVUs for preservice and postservice intervals for the 
evaluation and management services were selected based on length of 
time, number of visits, clinical setting, and judgment of level of care 
required. Using this method, the American College of Obstetricians and 
Gynecologists was able to arrive at work RVU estimates for surgical 
codes with a variety of global periods.
    The survey data in almost every case supported an increase in work 
RVUs. The surveys had a minimum survey sample size of 100 and response 
rates in excess of 30 percent. The surveyed intraservice times were 
consistently substantially greater than Harvard intraservice times. The 
work RVUs that were derived from a survey were in every case greater 
than the established work RVUs. When the building block method was 
used, it produced results that confirmed the survey data and argued for 
increased work RVUs. The American College of Obstetricians and 
Gynecologists used cross-specialty comparisons to validate both survey 
data and its building block method. Cross-specialty comparisons were 
especially convincing when direct parallels could be drawn to similar 
services on men or similar procedures to manage like disease in 
different organs.
    RUC Evaluation/Recommendation: The RUC found the multiple 
independent points of validation convincing. The survey, building 
block, and cross-specialty comparisons typically supported the claim 
for increased work RVUs. Generally, the RUC was skeptical of the 
building block approach. The RUC believed that there was too much room 
for subjective selection of the type and level of evaluation and 
management services. The RUC also recognized that double counting and 
overestimation of work components may yield results for which the sum 
of the parts exceeds the whole. Typically, the RUC accepted the lowest 
work RVU increase generated by the three methods.
    HCFA Decision: We have accepted all of the RUC recommendations for 
the gynecology codes.
9. Neurosurgery
    Comment: The American Association of Neurological Surgeons/Congress 
of Neurological Surgeons submitted comments identifying 73 misvalued 
services, both undervalued and overvalued. The comments presented a 
detailed history of the work RVUs for neurosurgery, identifying several 
problems in the methodology and results of the original Harvard study, 
particularly in the change from intraoperative work to total work in 
the cross-specialty linkage process and in review by refinement panels. 
The commenter attributed the basic problem to the Harvard cross-
specialty linkage process, arguing that it caused distortions and 
compressions of work RVUs within the neurosurgery services. Although 
this was corrected to some degree in Phase III of the Harvard study, 
the 1992 refinement panels did not accept many of the final Harvard 
numbers for neurosurgical procedures. Even the final Harvard data 
contain errors in data on postservice work, and the study often does 
not assume any intensive care unit visits when at least several would 
be furnished by the neurosurgeon.
    Most of the arguments presented focus on the nontemporal components 
of physician work, described as ``intensity.'' The commenters explained 
that the current work RVUs do not accurately reflect the varying levels 
of intensity for different neurosurgical procedures, nor within the 
different components of each service. To identify the specific codes 
that are misvalued in the current scale, the American Association of 
Neurological Surgeons/Congress of Neurological Surgeons conducted a 
survey in 1994. This organization surveyed a representative sample of 
200 neurosurgeons to evaluate in detail the time and intensity of the 
key reference services for neurosurgery in accordance with our 
discussion of the nature and format of comments on work RVUs that 
appeared in our December 8, 1994 final rule (59 FR 63454 to 63455). The 
survey did not ask physicians to reevaluate the total work RVUs for 
these procedures. The time data gathered from this study, which 
included detailed operative logs on over 1,500 neurosurgical patients, 
were found to correspond closely to the final Harvard Phase III data, 
and the American Association of Neurological Surgeons/Congress of 
Neurological Surgeons concluded that the survey validated the Harvard 
results for this component of work. The study also attempted to 
directly measure mental effort and judgment, technical skill and 
physical effort, and psychological stress, rather than calculating it 
as a ratio of work to time. This allowed for more variation within each 
component of intensity and greater precision in calculating work RVUs. 
This research confirmed the problems initially identified by the 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons that, for some of the most complex procedures, preservice and 
postservice work were underestimated by 30 to 40 percent.
    The focus of the American Association of Neurological Surgeons/
Congress of Neurological Surgeons' comments was on appropriately 
valuing the codes within neurosurgery by adjusting the rank-orders 
upwards and downwards. To develop its recommendations to the RUC, the 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons conducted a second survey in 1995, which led the RUC to make 
some adjustments in the recommended work RVUs. In addition, the 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons identified five more misvalued codes that had not been 
mentioned in its original comments.
    RUC Evaluation/Recommendation: The RUC evaluated the approach used 
to calculate the recommended work RVUs and considered it to be 
reasonable. There was some discussion of ``lumping'' vs. ``splitting,'' 
because the American Association of Neurological Surgeons/Congress of 
Neurological Surgeons' methodology of measuring intensity ``splits'' it 
out from overall work. On the other hand, the time periods used by the 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons were the same as those used by Harvard, and the time estimates 
were based on objective data, not on surgeons' opinions about how much 
time they spend doing each component of work. In fact, for a number of 
the services studied by the American Association of Neurological 
Surgeons/Congress of Neurological Surgeons, the resulting work RVUs 
tended to validate the final work RVUs from the Harvard study. For 
example, CPT code 61480 (Craniectomy, suboccipital; for mesencephalic 
tractotomy or pedunculotomy) currently has 16.77 work RVUs, but the 
final Harvard work RVUs for the service are 25.55, and the neurosurgery 
study

[[Page 20026]]

produced a recommended 25.03 work RVUs.
    The effort appeared to the RUC more as an attempt to bring a higher 
degree of precision to the work RVUs for neurosurgery than to split 
work into more components in order to inflate the work RVUs. The 
recommended reductions in some higher frequency codes bolstered this 
perception (for example, CPT code 63030 (Laminotomy (hemilaminectomy), 
with decompression of nerve root(s), including partial facetectomy, 
foraminotomy and/or excision of herniated intervertebral disk; one 
interspace, lumbar) was reduced from 12.11 to 11.10 work RVUs and had a 
frequency of 29,103 in 1994). In addition, a number of very low 
frequency services, including some pediatric codes, were included in 
the analysis and recommendations (for example, CPT code 61480 
(Craniectomy, suboccipital; for mesencephalic tractotomy or 
pedunculotomy), which had zero claims in 1994). Services that are both 
highly specialized and very infrequently furnished may not have 
received sufficient attention in the Harvard study.
    To evaluate the results of this approach, the RUC workgroup, which 
included a general surgeon, an ophthalmologist, and a psychiatrist, 
first selected a number of the codes and calculated two ratios: (1) 
recommended total work RVUs/intraservice time, and (2) recommended 
total work RVUs/total time. The results of this analysis were very 
consistent with one another and with other codes with work RVUs, with 
nearly all of the codes having a ratio of work RVUs to total time of 
about 0.05 and ratios of work RVUs to intraservice work time of 0.10 to 
0.14. The highest intraservice work ratio was 0.178 for CPT code 61700 
(Surgery of intracranial aneurysm, intracranial approach; carotid 
circulation), with 48.30 recommended work RVUs. The results were 
considered appropriate because of the extremely complex and difficult 
nature of the service, when compared both to other codes within the 
family of intracranial vascular codes and to other major neurosurgical 
services.
    The RUC then selected several of the codes for comparison with 
codes on the multiple points of comparison with which they were 
familiar:
      CPT code 61682 (Surgery of intracranial arteriovenous 
malformation; supratentorial, complex), with 59.47 recommended work 
RVUs, was compared with CPT code 33870 (Transverse aortic arch graft), 
which has 37.74 work RVUs. This service involves the surgical efforts 
to obliterate and remove a congenital vascular malformation from within 
the brain, frequently deep within a cerebral hemisphere. Many of the 
issues that contribute to the high complexity of CPT code 61700 also 
apply to this service, although preservice and postservice work 
complexity is somewhat lower. This service requires 420 minutes of 
intraoperative time, however, compared to 270 minutes for CPT code 
61700.
      CPT code 67107 (Repair of retinal detachment), with 13.99 
work RVUs, was compared to CPT code 61875 (Implantation of 
neurostimulator electrodes), with 13.79 recommended work RVUs. The 
intraservice work ratio for retinal detachment is 0.13 and the total 
work ratio is 0.049; for the neurosurgery code the intraservice work 
ratio is 0.115 and the total work ratio is 0.04. The ratio comparisons 
and the work and time involved in each service appear to be correct. 
CPT code 67107 involves 107 minutes of intraoperative time, and CPT 
code 61875 involves 120 minutes of intraoperative time. The final 
Harvard work RVUs for CPT code 61875 are 14.06.
      The comparison of CPT code 61702 (Surgery of intracranial 
aneurysm), with 46.31 recommended work RVUs, to CPT code 48150 (Partial 
removal of pancreas), with 42.53 work RVUs, also seems correct, since 
CPT code 61702 involves surgery of a vertebral or basilar artery 
aneurysm and has the same high levels of mental effort, technical 
skill, and stress/risk outlined above for CPT code 61700.
    The RUC concluded that the neurosurgery study produced work RVU 
recommendations that are considerably more precise than the current 
work RVUs for these services.
    Three of the codes surveyed by the American Association of 
Neurological Surgeons/Congress of Neurological Surgeons were also the 
subject of other comments and were therefore reviewed individually by 
the RUC:
      For CPT code 61791 (Creation of lesion by stereotactic 
method, percutaneous, by neurolytic agent (e.g., alcohol, thermal, 
electrical, radiofrequency); trigeminal medullary tract) with 7.29 work 
RVUs, the commenters recommended an increase to 13.29 work RVUs because 
the service is substantially more difficult than CPT code 61790, which 
is the same service performed on the gasserian ganglion, with 10.31 
work RVUs. The RUC recommended a somewhat higher increase to 13.99 work 
RVUs rather than the 13.29 work RVUs recommended by commenters. The 
Harvard work RVUs for this service are 14.28.
      For CPT code 62290 (Injection procedure for diskography, 
each level; lumbar), with 3.58 work RVUs, we received a comment 
recommending a reduction to 2.05 work RVUs, which would be 25 percent 
more than the work RVUs for CPT code 62289 (Injection of substance 
other than anesthetic, antispasmodic, contrast, or neurolytic 
solutions; lumbar or caudal epidural (separate procedure)). The 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons argued that CPT code 62289 is a poor reference for CPT code 
62290 because the techniques are not very comparable and the targets 
and risks are different. The RUC agreed with this argument. The 
American Association of Neurological Surgeons/Congress of Neurological 
Surgeons stated that CPT code 62291 (Injection procedure for 
diskography, each level; cervical), with 2.91 work RVUs, is a better 
reference. The specialty society stated that CPT code 62290 should be 
reduced from 3.58 to 3.00 work RVUs to allow for the fact that lumbar 
diskography is inherently more difficult than cervical diskography and 
still maintain the correct rank-order of the current work RVUs.
      For CPT code 64443 (Injection, anesthetic agent; 
paravertebral facet joint nerve, lumbar, each additional level), with 
1.35 work RVUs, commenters recommended the code be valued at 50 percent 
of CPT code 64442 (Injection, anesthetic agent; paravertebral facet 
joint nerve, lumbar, single level) because it is an add-on code and 
does not involve preservice and postservice work. Although the general 
rule is that about 50 percent of the work is intraservice work and 50 
percent is preservice and postservice work, this, however, does not 
hold true for many minor procedures. In fact, the work RVUs for CPT 
code 64443 were already reduced significantly when the global period 
was changed in 1994. For these two codes (CPT code 64442 and CPT code 
64443), the ratio is approximately 61 percent. The RUC recommended, 
therefore, that the work RVUs for CPT code 64443 be reduced to 0.98 
from 1.35, but not to 0.78, as recommended by the commenter.
    The RUC believed it is important to add all of the codes identified 
by the American Association of Neurological Surgeons/Congress of 
Neurological Surgeons to the 5-year review in order to have correct 
rank-ordering of codes across neurosurgical procedures. In addition, 
the RUC considered recommending that all the neurosurgery codes in the 
5-year review be rescaled so that the net effect of the changes in work 
RVUs would be zero to make the

[[Page 20027]]

changes work-neutral. Although the American Association of Neurological 
Surgeons/Congress of Neurological Surgeons recommended changes in a 
very large number of codes, the overall impact of the recommendations 
is relatively small. An AMA analysis using 1994 frequency data found 
that acceptance of the recommended changes would only increase Medicare 
expenditures by about $3.8 million. The RUC recommended, therefore, 
that all the suggested changes be adopted without any rescaling.
    HCFA Decision: We have accepted all but one of the RUC 
recommendations for the neurosurgery codes: CPT code 61793 
(Stereotactic focused proton beam or gamma radiosurgery).
    The RUC recommended an increase in work RVUs from 16.70 to 17.88. 
We disagree with this recommendation, which is based in large part on a 
calculation of the intraservice time components by the American 
Association of Neurological Surgeons rather than on the surveyed time. 
The calculated time was 210 minutes, while the surveyed time was 120 
minutes. We are concerned that the calculated intraservice time 
includes specific elements that are described and reported by codes in 
the radiation oncology section of CPT. For example, the calculated time 
includes 15 minutes for ``stereotactic images processed by dose 
planning computer using dose planning module for optimal dosimetry'' 
and 15 minutes for ``planned dose tested in radiosurgical device to 
assure correct targeting and dosimetry.'' In view of our concern, we 
have decided to maintain the current 16.70 work RVUs.
10. Ophthalmology
    The American Academy of Ophthalmology and the American Optometric 
Association responded to comments requesting that the work RVUs for 11 
cataract-related codes be reduced. In addition, the American Academy of 
Ophthalmology surveyed several codes and recommended work RVU 
increases. Arguments supporting increased work RVUs relied on surveys, 
comparisons to cross-specialty codes, and rationale claiming that 
procedures have changed and now require adjusted work RVUs. The 
response rates and resulting samples were of sufficient size to produce 
valid results.
    Generally, the RUC found the data, comparisons, and arguments 
convincing. The RUC was looking for compelling evidence that the 
procedure had changed, the patient population had changed, or the code 
had been originally undervalued or overvalued. When the RUC recommended 
different work RVUs, it typically attempted to reconcile new survey 
data and rationale with Harvard data. This approach produced final 
recommended work RVUs below those recommended by the specialty society. 
In all, the RUC proposed that the work RVUs be reduced for 7 codes, 
increased for 12 codes, and maintained at the current value for 29 
codes.
    HCFA Decision: We have accepted all but one of the RUC 
recommendations for the ophthalmology codes: CPT code 66821 (Discission 
of secondary membranous cataract (opacified posterior lens capsule and/
or anterior hyaloid); laser surgery (e.g., YAG laser) (one or more 
stages)).
    We referred a comment to the RUC which stated that this service is 
overvalued and that the work RVUs should be reduced to 2.30. The basis 
of this recommendation was that the technical skill and intensity of 
work for CPT code 66821 are significantly lower than for CPT code 66820 
(Incision, secondary cataract). In addition, the intraservice time is 
less, and the number of outpatient visits during the global period are 
fewer.
    The RUC reviewed the survey data which showed a median intraservice 
time of 11 minutes and median work RVUs of 3.42. The intraservice skill 
and complexity were considered to be comparable to those of CPT code 
66761 (Revision of iris) and CPT code 67031 (Laser surgery, eye 
strands). The RUC concluded that the survey data and comparisons were 
sufficiently compelling to reject the commenter's recommended decrease 
in work RVUs. The RUC recommended that the current work RVUs be 
maintained.
    We disagree. On a related matter, we had forwarded a comment to the 
RUC that the cataract codes were overvalued because the procedures 
typically can be performed in a shorter period of time than the 54 
minutes in the Harvard data. However, we accepted the surveyed median 
intraservice time of 50 minutes presented to the RUC for cataract 
surgery as the basis for not reducing the work RVUs. Applying the 
intraservice work intensity of the cataract procedure (CPT code 66984) 
to the 11 minutes of surveyed intraservice time for the YAG laser 
procedure results in 2.15 work RVUs, which we are proposing for CPT 
code 66821. We believe this comparison is appropriate because we do not 
believe that the intensity of a YAG laser procedure is greater than the 
intensity of a cataract extraction.
    For information on eye visit codes, see the discussion of the 
evaluation and management codes in section II.C.1. of this notice.
11. Imaging
    The RUC considered public comments submitted by the American 
College of Radiology, the American College of Cardiology, and the 
Society for Cardiovascular and Interventional Radiology. The American 
College of Radiology cited nine radiology codes that it believed are 
misvalued. The American College of Radiology noted that a 
multidisciplinary approach was used to identify these nine procedures. 
Specifically, radiologists in each specialty of radiology were asked to 
review the procedures they perform and determine whether or not the 
work RVUs reflect the difficulty of the procedure. A multidisciplinary 
panel of radiologists and the American College of Radiology Commission 
on Economics then reviewed the selected procedures. The panel 
determined that it could present an adequate case for reconsideration 
of the work RVUs for these nine procedures.
    We received many comments which generally stated that radiology 
codes were overvalued. The most common reasons given were the 
following: Plain film studies are relatively overvalued compared to 
more complex radiographic procedures; ultrasound studies are 
overvalued; and the most common computerized axial tomography and 
magnetic resonance imaging studies are overvalued. A comment also 
suggested that plain film studies appeared overvalued relative to 
evaluation and management services. Other comments suggested that 
simple planar procedures such as aortography should be decreased to 
equate the readings of these films with equivalent noncontrast studies; 
magnetic resonance imaging should be revalued to reflect easier 
interpretations with contrast material; and both magnetic resonance 
imaging and computerized axial tomography scans should be similar for 
all anatomic locations.
    As part of its report outlining the work RVU recommendations to the 
RUC, the American College of Radiology prepared a comprehensive 
rebuttal of the comments. Specifically, the American College of 
Radiology noted that the current physician work RVUs for plain film 
studies accurately reflect the work involved in the procedure and, 
therefore, should be maintained. Contrary to the comments, the RUC 
concluded, plain film studies are not overvalued relative to more 
complex radiographic studies. The American College of Radiology survey 
data supported the fact that the

[[Page 20028]]

interpretation of plain film studies requires more time than the 
evaluation and management CPT code 99212 (Office/outpatient visit, 
established patient) to which those studies were most often compared.
    The RUC also recommended that the current work RVUs assigned to 
codes involving the use of contrast material should be retained since 
they require more physician work than those not involving the use of 
contrast. When contrast is used, physicians must interpret more images, 
with a concomitant increase in work. Time data and intensity analysis 
prepared by the American College of Radiology confirm the fact that the 
current work RVUs for computerized axial tomography scans reflect the 
physician work involved. The American College of Radiology also noted 
that the number of images varies by the site that is being imaged 
during a computerized axial tomography scan, which rebuts the 
commenters' notion that the work RVUs for this scan be the same 
regardless of site. The American College of Radiology reported that the 
presence of contrast material increases the physician work of magnetic 
resonance imaging since the physician must visualize the anatomy in 
greater detail, therefore, increasing the complexity of the 
interpretation.
    RUC Evaluation/Recommendation: The RUC believed that extensive 
evidence presented by the American Society of Radiology compellingly 
supported maintaining the current work RVUs. The RUC agreed with all of 
the recommended changes based on evidence that was presented by the 
American College of Radiology. For the codes that were presented by the 
Society for Cardiovascular and Interventional Radiology, although the 
RUC agreed that the services were undervalued, the RUC did not believe 
that the Society for Cardiovascular and Interventional Radiology 
presented compelling evidence for the requested increases. Instead, the 
RUC suggested increased work RVUs, but lower than the specialty society 
recommended.
    HCFA Decision: We have accepted all of the RUC recommendations for 
the imaging codes.
12. Cardiothoracic and Vascular Surgery
    The American Society of General Surgeons and the Society of 
Thoracic Surgeons stated that the Harvard study did not appropriately 
value lung procedures. In particular, the commenters stated that the 
Harvard study had estimated, rather than directly measured, preservice 
and postservice times and that the current RVUs do not reflect the 
physician work involved in maintaining proper hemodynamics during 
initiation of anesthesia, stabilizing the patient for transfer to the 
recovery room, and accumulating sufficient evidence that immediate 
reoperation or other intervention for bleeding, impaired circulation, 
or air leak is not needed. The Society of Thoracic Surgeons also 
commented on several cardiac operations that it believed have become 
more complex over time and recommended slight increases in 11 coronary 
artery bypass graft procedures.
    Generally, the RUC did not consider evidence that the Society of 
Thoracic Surgeons provided sufficiently compelling to support increases 
in the work RVUs for the thoracic procedures identified in its comment. 
Also, the RUC has already reviewed most of these services, and any 
changes in work since the Harvard study would have been reflected in 
the RUC's 1993 recommendations. However, the RUC agreed that increases 
were warranted in two of the cardiac surgery procedures, CPT code 33426 
(Repair of mitral valve) and CPT code 33875 (Thoracic aorta graft), 
which have become more complex over the last 5 years.
    The International Society for Cardiovascular Surgery/The Society 
for Vascular Surgery described a number of problems in the current work 
RVUs for vascular surgery procedures, many of which are the result of 
the lack of any distinct study of vascular surgical procedures or 
vascular surgeons in the Harvard study. This lack of a study could have 
particularly deleterious effects for the Medicare program because 
Medicare patients account for an exceptionally high percentage of total 
patients seen by vascular surgeons. The commenter stated, for example, 
that no vascular surgeons were included in the Harvard Technical 
Consulting Groups. It also described errors in the Harvard vignettes, 
which could have resulted from the absence of vascular surgeons on the 
Harvard Technical Consulting Groups and led to incorrect data. The 
commenter also noted that some adjustments were made in these services 
for the 1993 work RVUs based on an Abt study, but that further 
refinements are needed. Finally, the commenter reported the results of 
an effort to obtain intraoperative times from 10 hospitals for 9 
vascular procedures and 11 other codes selected from the list of 
reference procedures. This study found that, while data on nonvascular 
surgeries corresponded closely to existing Harvard and RUC data for the 
services, for vascular surgeries the current data were 20 percent lower 
than the hospital reported times. The American Society of General 
Surgeons also commented on two vascular surgical procedures, CPT code 
34201 (Removal of artery clot) and CPT code 35654 (Artery bypass 
graft).
    The RUC found that the International Society for Cardiovascular 
Surgery/Society for Vascular Surgery offered compelling reasons to 
review the current work RVUs for selected vascular surgery procedures. 
The RUC did not adopt the particular approaches or proposed RVUs 
recommended by the International Society for Cardiovascular Surgery/
Society for Vascular Surgery, however.
    The Society for Cardiovascular and Interventional Radiology, the 
American College of Surgeons, the American Society of Hematology, the 
American Thoracic Society, the International Society for Cardiovascular 
Surgery/Society for Vascular Surgery, and the American Society of 
General Surgeons commented on nine other cardiovascular procedures.
    The RUC agreed with the Society of Cardiovascular and 
Interventional Radiology that there are anomalies in the current work 
RVUs for CPT codes 36215, 36218, 36245, and 36248, all of which are 
codes for placing a catheter in an artery. The RUC recommended an 
adjustment in the current work RVUs for CPT codes 36215 and 36245 to 
make them equal and recommended a change in the global period for CPT 
codes 36218 and 36248 to maintain consistency within this family. The 
RUC adopted the increase recommended by the general and vascular 
surgeons for CPT code 36830 (Creation of arteriovenous fistula by other 
than direct arteriovenous anastomosis (separate procedure); 
nonautogenous graft). For the remainder of the codes in this group, the 
RUC did not believe the commenters presented sufficient evidence to 
support an increase and recommended that the current work RVUs be 
maintained.
    HCFA Decision: We have accepted all of the RUC recommendations for 
the cardiothoracic and vascular surgery codes.
13. Pathology and Laboratory Procedures
    Commenters identified numerous pathology and laboratory procedure 
codes as being overvalued.
    The review of pathology and laboratory procedures primarily focused 
on the codes that commenters identified as overvalued. In response to 
the comments, the College of American Pathologists provided 
recommendations to the RUC to maintain or increase the RVUs for these 
codes. Based on survey results, comparisons to the final

[[Page 20029]]

Harvard study results, comparisons to key reference services, and 
analysis of Medicare claims data, the RUC believed that the College of 
American Pathologists provided compelling evidence for maintaining the 
current work RVUs of these procedures and, for CPT code 86327 
(Immunoelectrophoresis assay), for increasing the work RVUs from their 
current level.
    Comment: The American Society of Hematology provided 
recommendations to the RUC on the following five codes:

------------------------------------------------------------------------
  CPT                                                                   
  code                              Descriptor                          
------------------------------------------------------------------------
36520..  Therapeutic apheresis (plasma and/or cell exchange).           
38230..  Bone marrow harvesting for transplantation.                    
85390..  Fibrinolysins or coagulopathy screen, interpretation and       
          report.                                                       
86077..  Blood bank physician services; difficult cross match and/or    
          evaluation of irregular antibody(s), interpretation and       
          written report.                                               
86079..  Blood bank physician services; authorization for deviation from
          standard blood banking procedures (e.g., use of outdated      
          blood, transfusion of Rh incompatible units), with written    
          report.                                                       
------------------------------------------------------------------------

    RUC Evaluation/Recommendation: Based on survey results and 
comparisons to key reference services, the RUC recommended increasing 
the work RVUs of all five codes; however, in two instances the RUC did 
not believe that the specialty society had provided enough evidence to 
support adopting the increase that the specialty society recommended.
    Comment: The Medical Oncology Association of Southern California, 
Inc. requested increased work RVUs for CPT code 85095 (Bone marrow, 
aspiration only) and CPT code 85102 (Bone marrow biopsy; needle or 
trocar).
    RUC Evaluation/Recommendation: Since the Medical Oncology 
Association of Southern California, Inc. presented no evidence to 
support the comment, the RUC recommended maintaining the current work 
RVUs of these codes.
    HCFA Decision: We have accepted all but two of the RUC 
recommendations for the pathology and laboratory procedures codes: CPT 
code 85390 (Fibrinolysins screen).
    The current work RVUs are 0.37. We received conflicting comments on 
this code. One commenter recommended that the work RVUs be reduced on 
the basis that a fibrinolysin screen requires less time and expertise 
than the interpretation of CPT code 71021 (Chest x-ray), which is 
assigned 0.22 work RVUs with a Harvard study time of 5 minutes. Another 
commenter requested an increase to 1.19 work RVUs. The commenter 
compared this service to CPT code 88331 (Pathology consult in surgery), 
which has 1.19 work RVUs and a Harvard time of 20 to 24 minutes. The 
RUC noted that this procedure has never been surveyed and the current 
work RVUs were established by HCFA. The RUC agreed that the physician 
work of furnishing this service has changed during the past few years. 
The clinical problems presented by patients are more complex, the tests 
are more technical, and the physician is required to perform more 
tests. However, the RUC did not believe that these changes warranted an 
increase to 1.20 work RVUs. Instead, the RUC believed that the service 
is comparable in physician work to the key reference service CPT code 
88305 (Tissue exam by pathologist), which has 0.75 work RVUs. 
Therefore, the RUC recommended 0.75 work RVUs.
    Clinical laboratory tests are covered by the Medicare program and 
paid for under the clinical laboratory fee schedule; performance of the 
test itself does not require the services of a physician and does not 
have physician work associated with it. However, we have recognized 
that there are a limited number of clinical laboratory codes for which 
it is almost always necessary for the laboratory physician to furnish 
an interpretation, and we have assigned 0.37 work RVUs to these 
interpretations. We are not persuaded that the work has changed over 
time. The vignette used to survey this code appeared to represent 
service well beyond interpretation of a single test and seemed to 
describe a typical consultation. CPT code 80502 (Lab pathology 
consultation) describes the surveyed vignette and is valued at 1.33 
work RVUs, which is similar to the 1.20 work RVUs from the RUC survey. 
Therefore, we have retained the current 0.37 work RVUs for CPT code 
85390.
    CPT code 86327 (Immunoelectrophoresis assay).
    The current work RVUs are 0.37. Pathology interpretation of 
laboratory tests was originally valued at 0.37 work RVUs. (See comment 
for CPT code 85390 above.) We are not persuaded that the work has 
changed over time. The vignette used to survey this code appeared to 
represent service well beyond interpretation of a single test and 
seemed to describe a typical consultation. CPT code 80502 (Lab 
pathology consultation) describes the surveyed vignette and is valued 
at 1.33 work RVUs, which is similar to the 1.20 work RVUs from the RUC 
survey.
14. Psychiatry
    The American Psychiatric Association and the American Academy of 
Child and Adolescent Psychiatry submitted comments on psychiatric 
services. Both societies commented that the current physician fee 
schedule has not preserved the original work-value relationships 
developed by Harvard. It was their view that if the relative value of 
the code for 45 minutes of psychotherapy (CPT code 90844) is changed, 
all other values in the psychiatric section of CPT should be changed to 
preserve the original relationship with the psychotherapy code. The 
societies contended that our failure to maintain the relative 
relationships among the psychiatric codes that were surveyed by Harvard 
has resulted in the undervaluation of all psychiatric services.
    The American Psychiatric Association made five other specific 
comments:
     Psychotherapy service CPT codes 90842, 90843, and 90844 
represent three bundled services (continuing medical evaluation, 
medication management, and psychotherapy).
     Psychotherapy codes that are time dependent, especially 
CPT code 90844, have inappropriately low work RVUs as a result of 
undervaluing of time as a dimension of work.
     The nature of psychotherapy services has become more 
intensive since the development of the existing work RVUs.
     The preservice and postservice work for psychiatric 
services is undervalued.
     CPT code 90844 is inappropriately linked to CPT code 99204 
(Office or other outpatient visit for the evaluation and management of 
a new patient). The American Psychiatric Association argued in its 
comments that CPT code 90844 requires that the physician spend 45 to 50 
minutes of face-to-face time with a patient. In contrast, CPT code 
99204 can routinely last less than 45 minutes.
    Based on a combined survey of 250 physicians, clinical 
psychologists, and nurses, the American Psychiatric Association 
presented recommendations for 18 psychiatric codes. The American 
Psychiatric Association, in its comments and during its presentation to 
the RUC, presented the following evidence to support increasing the 
work RVUs of the psychiatric codes:
     Patient type and mix have changed dramatically during the 
past 5 years. The American Psychiatric Association reported that before 
1990, for the most part, ``stable'' patients were seen in an office 
outpatient setting. Patients that

[[Page 20030]]

were considered unstable, and otherwise hard to manage, were treated as 
inpatients, allowing the physician to coordinate with the hospital 
staff, if necessary. In the past, patients tended to seek treatment 
earlier and physicians were able to make referrals to psychiatrists 
earlier. The onset of managed care has increased the likelihood that 
many patients are referred to nonphysician mental health providers, 
which has translated into psychiatrists treating only the severely ill 
patient.
     Decreasing inpatient hospital admission has resulted in 
increased patient morbidity. Again, the American Psychiatric 
Association noted that shifting insurance industry patterns have played 
a significant role in this trend. Although many insurance policies 
offer mental health coverage, the coverage is often very restrictive. 
For example, most policies have strict limits on the number of 
inpatient hospital days. Many managed care policies have shifted away 
from long-term psychotherapy in favor of short intermittent treatment 
therapies.
     Since many more patients are seen on an outpatient basis, 
there is an increasing amount of coordination of care with other 
providers. The American Psychiatric Association noted that the time 
spent dealing with coordination of care issues has resulted in an 
increase of physician preservice and postservice work.
     During the past 5 years, new, highly sophisticated 
neuroleptic and antidepressant medications have been introduced. The 
American Psychiatric Association noted that, because of the advances in 
psychopharmacology, a greater number of individual psychotherapy 
patients will likely utilize these medications than was the case 5 
years ago. The greater reliance on these medications has increased the 
complexity of the medical decision making during an individual 
psychotherapy visit. Many of these new drugs require constant 
monitoring, such as weekly blood monitoring in the case of Clorazil. 
The failure to monitor these drugs appropriately could result in 
adverse side effects and possibly death.
     The psychotherapy codes have specific times incorporated 
into the CPT descriptor that do not accurately reflect the current 
practice of psychiatry. The American Psychiatric Association noted that 
the practice of psychiatry has changed significantly since the 
psychotherapy codes were surveyed during the Harvard study; therefore, 
the current RVUs should be increased to reflect this change.
    The RUC reviewed 18 services in the psychiatry section of CPT. For 
13 of those services, the RUC recommended no change from the current 
work RVUs. For the other five services, the RUC believed that the five 
points cited by the American Psychiatric Association provide a 
compelling argument for increasing the work RVUs from their current 
levels. The RUC also concluded that the survey vignettes that the 
specialty society used describe the ``typical patient'' in 1995. In two 
instances, a commenter recommended lowering the current work RVUs of 
psychiatric services. In both instances, the RUC concluded that the 
specialty society provided compelling evidence for maintaining the 
current work RVUs for those codes.
    HCFA Decision: We agree with the RUC recommendations not to change 
the current work RVUs for 13 psychiatric services. We disagree with the 
RUC that there is compelling evidence to increase the work RVUs of the 
remaining 5 psychiatric services (CPT codes 90801, 90843, 90844, 90853, 
and 90855). As a result, we will maintain the current work RVUs for all 
18 psychiatric services. The 1996 work RVUs are slightly higher than 
the 1995 work RVUs because, effective January 1, 1996, we bundled the 
work RVUs for CPT codes 90825 and 90887 across CPT codes 90801, 90820, 
90835, 90842 through 90847, and 90853 through 90857.
15. Other Medical and Therapeutic Services
    Comment: We received isolated comments regarding purportedly 
overvalued miscellaneous diagnostic and therapeutic procedures such as 
biofeedback, esophageal motility studies, pulmonary testing, and 
intralesional chemotherapy.
    RUC Evaluation/Recommendation: Based on recommendations from the 
National Association of Medical Directors of Respiratory Care, the 
American Thoracic Society, the American College of Chest Physicians, 
the Joint Council of Allergy, Asthma and Immunology, and the American 
Academy of Electrodiagnostic Medicine, the RUC recommended maintaining 
the current work RVUs of most of the procedures that were identified by 
commenters. These recommendations were based on survey results, 
comparisons to final Harvard study results, comparisons to key 
reference services, and analysis of Medicare claims data.
    Comment: The American Academy of Neurology submitted a comment on 
CPT code 95951 (Monitoring for identification and lateralization of 
cerebral seizure focus by attached electrodes; combined 
electroencephalographic (EEG) and video recording and interpretation, 
each 24 hours) recommending an increase in work RVUs from 3.80 to 6.75.
    RUC Evaluation/Recommendation: The requested work RVUs were amended 
to 6.00 based on results of the survey by the American Academy of 
Neurology. The RUC held the view that the survey results provided 
sufficient evidence to warrant increasing the work RVUs for the 
procedure. This recommendation was based on a survey of 60 
neurologists, comparisons to final Harvard study results, and 
comparisons to key reference services.
    Comment: The Medical Oncology Association of Southern California, 
Inc. submitted work RVU recommendations for the following CPT codes:

------------------------------------------------------------------------
  CPT                                                                   
  code                              Descriptor                          
------------------------------------------------------------------------
96440..  Chemotherapy administration into pleural cavity, requiring and 
          including thoracentesis.                                      
96445..  Chemotherapy administration into peritoneal cavity, requiring  
          and including peritoneocentesis.                              
96450..  Chemotherapy administration into CNS (e.g., intrathecal),      
          requiring and including lumbar puncture.                      
------------------------------------------------------------------------

    RUC Evaluation/Recommendation: The RUC recommended maintaining the 
current work RVUs for these three chemotherapy codes. These 
recommendations were based on the fact that the RUC had recently 
reviewed one of the procedures and the fact that Medicare Part B data 
showed that the other chemotherapy procedures are infrequently 
performed.
    HCFA Decision: We have accepted all but one of the RUC 
recommendations for other medical and therapeutic services: CPT code 
90911 (Anorectal biofeedback).
    The current work RVUs are 2.15. A commenter recommended a reduction 
to 0.93 work RVUs since this procedure lacks the intensity of CPT code 
90937 (Hemodialysis, repeated evaluation) or CPT code 90801 
(Psychiatric interview). CPT code 46606 (Anoscopy and biopsy) requires 
less time but presents a greater risk than CPT code 90911. The RUC 
recommended retaining the current work RVUs since the procedure is 
lengthy, taking a minimum of 30 minutes but typically lasting 45 to 60 
minutes. The RUC's view was that the procedure is more intense and 
requires more work than CPT code 46606. The RUC considers that this 
procedure is

[[Page 20031]]

similar in its intensity to CPT code 90801.
    In our assessment, the RUC recommendation is too high. Other 
biofeedback procedures are valued at 0.89 work RVUs. This procedure 
involves little physician work and is similar to other biofeedback 
procedures; therefore, we have assigned 0.89 work RVUs.
16. Speech/Language/Hearing
    Comment: The American Speech-Language-Hearing Association and the 
American Academy of Audiology submitted comments on the following CPT 
codes:

------------------------------------------------------------------------
  CPT                                                                   
  code                              Descriptor                          
------------------------------------------------------------------------
92506..  Speech & hearing evaluation.                                   
92507..  Speech/hearing therapy.                                        
92508..  Speech/hearing therapy.                                        
92541..  Spontaneous nystagmus test.                                    
92542..  Positional nystagmus test                                      
92544..  Optokinetic nystagmus test.                                    
92545..  Oscillating tracking test.                                     
92546..  Sinusoidal rotational test.                                    
92585..  Auditory evoked potential.                                     
------------------------------------------------------------------------

    In general, these commenters expressed concern regarding our 
payment policies for audiologists and speech pathologists. These 
organizations stated that the current practice expense component does 
not accurately reflect the technical work that is involved in 
performing the services. In addition, the American Academy of Audiology 
noted that the current physician fee schedule includes zero work RVUs 
for audiology services, even though the Harvard study included 
physician work RVUs for these codes.
    The American Speech-Language-Hearing Association and the American 
Academy of Otolaryngology--Head and Neck Surgery, Inc. had originally 
wanted to survey these services; however, they have now requested that 
the codes be withdrawn from further consideration.
    RUC Evaluation/Recommendation: A majority of these codes have been 
revised for CPT 1996, and the RUC submitted work RVU recommendations to 
us in May 1995. The distinction between physician work RVUs and work 
recognized as practice expenses such as the labor component of 
audiology services is addressed in section II.C.5. of this notice. 
Because interim work RVUs, which are subject to public comment, were 
established in January 1996, and final work RVUs will be established 
for 1997, we are not considering these codes in the 5-year review.
    Comment: Commenters stated that CPT code 92512 (Nasal function 
studies (e.g., rhinomanometry)) is similar to CPT code 94060 
(Bronchospasm evaluation: spirometry as in 94010, before and after 
bronchodilator (aerosol or parenteral) or exercise), with 0.31 work 
RVUs.
    RUC Evaluation/Recommendation: The RUC noted that nasal function 
studies are performed to evaluate the normal or abnormal function of 
the nose. Rhinomanometry is a nasal function study that measures the 
flow and pressure of air through the nose. It enables the physician to 
assess the degree of obstruction, if any, that may be present in the 
nasal passages. Anterior rhinomanometry measures air flow in the front 
of the nasal cavity and is performed by inserting flexible air tubes 
into each nostril. The tubes are connected to a device that measures 
the amount and pressure of air that flows through them as the patient 
breathes. The physician records measurements of air flow and, from 
these, calculates the degree of obstruction. CPT code 94060 is a 
distinctly different test, which uses spirometry to measure exhaled gas 
and record the time of collection. CPT code 94060 is less intense and 
requires less physician time than CPT code 92512. Therefore, the RUC 
recommended that the current work RVUs be maintained.
    HCFA Decision: We have accepted all of the RUC recommendations for 
the speech, language, and hearing codes.

C. Other Comments

1. Evaluation and Management Services
    We received numerous comments requesting review of evaluation and 
management services. Most of the comments focused on office visits, 
hospital visits, and consultations. The commenters offered three major 
reasons for requesting that the work RVUs for these evaluation and 
management services be reviewed:
     The physician work involved in these services has 
increased since the initial Harvard study of RVUs was conducted. As a 
mechanism to control costs over the past 10 years, there has been 
increased pressure to treat patients in the office rather than the 
hospital or emergency room. Patients are being discharged from the 
hospital sooner. As a result, the typical patient seen in the office 
and in the hospital is more complex than the patient seen in the mid-
1980's. Also, the preservice and postservice work has changed due to 
the following factors:
    + Increased documentation requirements.
    + Time and effort required for obtaining or providing 
authorizations for tests and referrals.
    + Higher patient expectations and an increasingly well informed 
patient population.
    + Increased coordination with other health professionals and family 
members.
    + Increased patient education regarding issues such as fall 
prevention and adverse drug reactions.
     Evaluation and management services are undervalued 
relative to most other procedures. The highest level evaluation and 
management services require a ``comprehensive examination'' and 
``medical decision making of high complexity,'' yet the assigned work 
RVUs for these services are lower than for procedures that involve less 
time, less mental effort and judgment, and less technical skill and 
physical effort. An analysis of intraservice work per unit time 
(intensity) by one commenter found that the intensity of 96 percent of 
the services paid under the physician fee schedule exceeded the 
existing intensity of evaluation and management services. The existing 
intensities were calculated by dividing the work RVUs by the typical 
time of the CPT codes for evaluation and management services.
     The current CPT codes for evaluation and management 
services were never directly surveyed or studied in the Harvard RVU 
study. The Harvard study conducted its survey from 1986 through 1988; 
the new CPT codes were published in 1992. At the time of the Harvard 
surveys, evaluation and management services were not defined based on 
the level of history, examination, and medical decision making. A 
crosswalk from the old CPT codes to the new CPT codes was used to 
establish work RVUs. Also, the preservice and postservice work was not 
directly surveyed, nor was postservice work defined.
    We forwarded these comments to the RUC. The RUC agreed with the 
commenters that an in-depth review of the work involved in office and 
hospital visits and consultations was warranted. We also referred 
comments suggesting that the work RVUs for nursing facility visits and 
home visits should be reviewed.
    After reviewing selected evaluation and management services, the 
RUC found the evidence compelling to recommend increasing the work RVUs 
for office visits, subsequent hospital visits, and consultations. The 
RUC made an interim recommendation not to change the work RVUs for the 
home visits. In developing its

[[Page 20032]]

recommendations, the RUC focused principally on the work involved in 
the evaluation and management services, how the work has changed over 
time, and how the work is related to the work of other evaluation and 
management services and non-evaluation and management services. The RUC 
recommended work RVUs for 39 of the 98 evaluation and management 
services for which we have assigned work RVUs. When there was not a 
recommendation, the RUC took the position that the work RVUs did not 
need to be changed.
    As we evaluated the RUC recommendations, we noted several 
inconsistencies:
     The recommendations significantly alter the existing 
relationships among all the evaluation and management services without 
providing compelling evidence that the existing rank order is 
incorrect.
     The complexity of the service, as described by the level 
of history, examination, and decision making, did not directly 
correspond to the recommended work RVUs.
     The survey data were flawed; however, the RUC used the 
postservice work times that it acknowledges are overstated in its 
formula to calculate intraservice work intensity. The formula actually 
calculates something that is more accurately described as total work 
intensity, that is, total work divided by total time.
     Many of the arguments to increase the RVUs are based on 
the assumptions that the CPT codes do not adequately describe the 
service and that the current CPT codes for evaluation and management 
services were not used in the Harvard surveys.
    We believe that maintaining the relationships among the evaluation 
and management services is important. Therefore, we have examined all 
98 evaluation and management services for which we have assigned work 
RVUs. In assigning work RVUs, we considered the level of complexity of 
each service and valued the service as described by the CPT code. As 
the American Academy of Family Physicians noted in its original 5-year 
review comments, ``valuing a service which requires more effort and 
more time at a lower level than a `simple' procedure is inconsistent 
with the concept of a resource-based relative value scale.'' We believe 
that this rationale applies within the family of evaluation and 
management services. We took the survey data into general consideration 
but also investigated other objective data sources such as the AMA 
Socioeconomic Monitoring Survey from 1988 and 1994.
    If, as the commenters have suggested, the patients are more complex 
and the postservice work has increased, we should expect to see a 
change in the number of patient care hours a physician works or in the 
number of patient visits per week or a change in the level of visit 
billed. However, data from the AMA Socioeconomic Monitoring Survey as 
published in Physician Marketplace Statistics 1989 and 1994, reveal 
that the median number of hours a physician works in patient care (51) 
and the median number of patient visits per week (101) have not changed 
between 1988 and 1994. The AMA definition of hours in patient care 
includes activities that we consider to be postservice work. Using 
these data along with Medicare frequency data and the total service 
times provided in the RUC recommendations (RUC RVUs/RUC intensities), 
we calculated that the minimum number of hours in patient care 
necessary to perform 101 visits per week is 78.5. This discrepancy 
suggests that the RUC recommendations overestimate the total times by 
approximately 50 percent.
    In reviewing our claims data, we have seen a slight increase in the 
average number of work RVUs billed within each group of evaluation and 
management services. For each family of evaluation and management 
services, we calculated the quarterly average work RVUs since the 
beginning of the physician fee schedule. The average work RVUs for the 
family of office/outpatient visit for an established patient (CPT codes 
99211 through 99215), have increased from 0.60 to 0.62, a 3.33 percent 
increase from 1992 to 1995. This increase may reflect the increasing 
complexity of the Medicare patient or other factors.
    National Ambulatory Medical Care Survey data from 1989 and 1993 
reveal that the mean face-to-face time for all office visits has 
increased 13.6 percent. In 1989, the mean time was 16.2 minutes and in 
1993 it was 18.4 minutes. Although the change is statistically 
significant, we question its clinical significance. The data 
demonstrate, however, that between 1989 and 1993 there has been a shift 
toward office visits with longer face-to-face times.
    We approached review of the work RVUs for the evaluation and 
management services with three basic assumptions that were integral to 
the Harvard study and the 1992 work RVU refinement:
     All services within a family of evaluation and management 
services (that is, office visits) have the same intraservice work 
intensity.
     The intraservice work times in the CPT code descriptors 
are correct.
     The preservice and postservice work intensity is a fixed 
percentage of the intraservice work intensity.
    The RUC recommendations do not preserve these basic assumptions 
except for using the CPT times as an accurate measure of intraservice 
work times. Despite claiming that it maintained constant intensities 
within a family, the intensities the RUC calculated are not always 
consistent. For example, the RUC intensities for CPT codes 99231 
through 99233 range from 0.018 to 0.021. It is also unclear whether the 
RUC calculated preservice and postservice work intensities. If we 
assume a fixed intraservice work intensity within a family of 
evaluation and management codes, the RUC recommendations actually 
assign higher amounts of preservice and postservice work to the lower 
level codes within an evaluation and management family.
    The commenters claim that Harvard did not survey the current 
evaluation and management codes is technically correct but very 
misleading. In fact, the current codes were carefully developed to 
support the clinical vignettes used in, and the results of, the Harvard 
surveys. An extraordinary amount of work by Harvard, HCFA, the 
Physician Payment Review Commission, the CPT Editorial Panel, and the 
specialty societies went into the formulation and testing of the codes. 
We will continue to value services based on the CPT descriptions. If 
physicians believe that the definitions do not correctly describe the 
service as furnished in today's health care sector, they should discuss 
revising the definitions with the CPT Editorial Panel.
    In assigning work RVUs to these services, we defined preservice 
work as preparing to see the patient, reviewing records, and 
communicating with other professionals, as appropriate. We defined 
postservice work as including all coordination of care, documentation, 
and telephone calls with the patient, family members, or other health 
professionals associated with the delivery of care to the patient until 
the next face-to-face evaluation and management service is furnished 
(excluding separately billable services such as care plan oversight, 
CPT code 99375). The RUC used these definitions in its survey of 
evaluation and management services. Unlike the RUC and other 
commenters, we consider the time and effort required for obtaining and 
providing authorizations for tests and referrals to be a practice 
expense

[[Page 20033]]

issue because most of the work is done by a physician's staff rather 
than the physicians themselves.
    We agree with the commenters that the intensities of evaluation and 
management services should be increased to bring them closer to the 
intensities of procedural services on the physician fee schedule. 
Therefore, we propose to increase the intensities of the intraservice 
work, which is that portion of total work furnished either face-to-face 
with the patient in the office or on the floor or unit for inpatient 
services. We also agree with the commenters that postservice work has 
increased over time. We propose to increase the fixed percentage of 
intraservice work that represents preservice and postservice work. To 
determine the appropriate amounts to increase these intensities, we 
have chosen CPT code 99291 (Critical care, first hour) as our anchor 
because we believe that it is the most intense evaluation and 
management service. We accepted the RUC recommendation of 4.00 work 
RVUs for this service.
    If we assume that CPT code 99291 is the most intense service, we do 
not want the work RVUs for the other evaluation and management services 
to exceed 4.00. Under the current work RVUs, we have an established 
relationship between CPT code 99291 and CPT code 99213 (Level-three 
established patient office visit). CPT code 99213 represents a service 
with 15 minutes of face-to-face time. CPT code 99291 represents an hour 
of service. We believe that four times the value for CPT code 99213 
plus the work RVUs for ventilation management (1.22) and the 
interpretation of a single view chest x-ray (0.18) should be about 
equivalent to the work RVUs for critical care. We selected ventilation 
management and interpretation of a chest x-ray because they are the 
commonly performed items in critical care that are bundled into the 
critical care work RVUs. Given this relationship, we used an iterative 
process and determined that, for most evaluation and management 
services, if we increased the intraservice work intensity by 10 percent 
and the fixed percentage of intraservice work (to capture preservice 
and postservice work) by 25 percent, we would increase the work RVUs 
for evaluation and management services in a manner that would be 
consistent with the RUC recommendations while maintaining the existing 
relationships of the evaluation and management families.
    We followed a straightforward methodology in revising the work 
RVUs. For each code in the following classes: office, new patient; 
office, established patient; initial hospital care; subsequent hospital 
care; office consultation; initial inpatient consultation; and follow-
up inpatient consultation, we calculated the revised intensity by 
adjusting the intensities developed in 1992 and described in our 
November 25, 1992 final notice for the 1993 physician fee schedule (57 
FR 55949 through 55951). Those intensities were originally based upon 
results of the Harvard study and adjusted to maintain linearity in 1992 
based on comments received on the 1991 physician fee schedule final 
rule (56 FR 59502).
    The revised intraservice work intensities that have resulted from 
our 5-year review of evaluation and management services are summarized 
in the following table.

------------------------------------------------------------------------
                                                  1995 intra- 1997 intra-
                   Code/class                       service     service 
                                                   intensity   intensity
------------------------------------------------------------------------
Office visits, new patient......................       0.028       0.031
Office visits, established patient..............       0.028       0.031
Initial hospital visits.........................       0.028       0.031
Subsequent hospital visits......................       0.028       0.031
Office consultations............................       0.028       0.031
Initial inpatient consultations.................       0.022       0.024
Follow-up inpatient consultations...............       0.028       0.031
------------------------------------------------------------------------

    Preservice and postservice work is expressed as a percentage of the 
intraservice work. The following table summarizes the revised 
preservice and postservice work as percentage of intraservice work for 
the evaluation and management codes.

------------------------------------------------------------------------
                                                   1995 mean   1997 mean
                   Code/class                     percentage  percentage
------------------------------------------------------------------------
Office visits, new patient......................        35.0        43.8
Office visits, established patient..............        35.1        43.8
Initial hospital visits.........................        30.3        37.9
Subsequent hospital visits......................        12.5        37.9
Office consultations............................        34.5        38.5
Initial inpatient consultations.................        34.5        37.9
Follow-up inpatient consultations...............        34.9        37.9
------------------------------------------------------------------------

    To calculate the new work RVUs for the above classes of evaluation 
and management services as part of the 5-year review, we used the above 
intraservice work intensities and preservice and postservice work 
percentages in addition to the CPT times. The intraservice work 
intensity was multiplied by the typical time of the codes as listed in 
CPT to determine the new intraservice work values. The preservice and 
postservice work percentage of this value was added to the intraservice 
work value to calculate the final work RVUs for the codes. The formula 
is total work RVUs = (intraservice work intensity)  x  (CPT time)  x  
(1 + pre/post percentage of intraservice work).
    Table 2, ``Evaluation and Management Codes; Five-Year Review--
Proposed Relative Value Units,'' lists all of the evaluation and 
management services and their 1995 and proposed new work RVUs. For each 
code, we have also provided a measure of complexity. This is a numeric 
representation of the level of history, examination, and medical 
decision making associated with the service. These three components of 
the evaluation and management service are considered the key components 
in selecting a level of evaluation and management service. For each of 
the 3 elements, the maximum score is 4; therefore, the most complex 
service has a score of 12. If the CPT code descriptor does not define 
the typical level of history, examination, and decision making 
complexity, as with CPT code 99291 (Critical care, first hour), no 
score for that code may be computed.

BILLING CODE 4120-01-P

[[Page 20034]]

[GRAPHIC] [TIFF OMITTED] TN03MY96.023



[[Page 20035]]

[GRAPHIC] [TIFF OMITTED] TN03MY96.024



BILLING CODE 4210-01-C

[[Page 20036]]

    CPT codes 99201 through 99215 (Office visits).
    We disagree with the RUC' contention that the established patient 
visits are more undervalued than the new patient visits. We also 
disagree with the RUC recommendations that assign higher work RVUs to 
established patient visits than new patient visits of the same duration 
and same level of complexity, for example, the recommended work RVUs 
for CPT codes 99201 and 99212. Both codes describe 10 minute office 
visits of equal complexity. However, the RUC has recommended work RVUs 
for the established patient visit that are 28 percent greater than the 
recommended work RVUs for the new patient visit. Historically, there 
has been a consensus in the physician community (confirmed by the 
Harvard resource-based relative value study) that new patients involve 
more physician work than established patients. It was for this reason 
that the CPT Editorial Panel created separate codes for new and 
established patients.
    Finally, we do not agree that the work RVUs for CPT code 99211 
(Level-one established patient office visit) should change as the RUC 
has recommended. Because this service, by definition, does not require 
the presence of a physician, we are maintaining the 1995 work RVUs.
    We adjusted the intraservice work intensity of CPT code 99213 to 
equal the intensities of the other office visit codes. Rounding due to 
past budget neutrality adjustments had caused the slight variation in 
the intraservice work intensities. To account for the possibility that 
these services were originally undervalued, we increased the 
intraservice work intensity by 10 percent. Because the package of 
postservice work, as defined earlier, was not explicitly surveyed by 
Harvard and we believe that the amount of postservice work has 
increased since these codes were originally assigned RVUs, we increased 
the preservice and postservice work percentage of intraservice work for 
all office visit codes (except for CPT code 99211) by 25 percent.
    Using the adjusted work intensities and the times included in the 
CPT descriptors for the codes, we calculated new work RVUs for all 
office visits. The new work RVUs are on average 17.1 percent greater 
than the 1995 work RVUs for CPT codes 99201 through 99215.
    CPT codes 99221 through 99239 (Hospital visits).
    The RUC assumed that there has been no change in initial hospital 
visits (CPT codes 99221 through 99223) since the original Harvard 
study. In fact, the RUC did not survey these services to determine 
whether its assumption was true. Neither did the RUC suggest that these 
codes were originally undervalued like other evaluation and management 
services. The RUC recommended no change in the work RVUs for these 
codes despite the comments that all evaluation and management services 
were undervalued relative to procedural services. Our view is that if 
the office visits were undervalued, so were the initial hospital 
visits. We approached review of these codes in the same manner as we 
did the office visit codes.
    The RUC recommended that the work RVUs for subsequent hospital 
visits and follow-up inpatient consultations should be equivalent 
because the time and complexity of the lowest, middle, and highest 
levels of subsequent hospital care and follow-up inpatient 
consultations are very similar. We agree that they are similar; 
however, they are not identical. Therefore, we have reviewed each group 
of services on its own merit.
    Because the RUC recommended no change in the work RVUs for initial 
hospital visits and significant increases in the work RVUs for 
subsequent hospital visits, the rank order of these two groups of 
evaluation and management services is distorted. We do not agree, as 
the RUC recommended, that subsequent hospital visits typically require 
more work than initial hospital visits. The work RVUs recommended for 
CPT code 99232 (Level-two subsequent hospital visit with a typical time 
of 25 minutes and a complexity score of 7.0) are 23 percent greater 
than the recommended work RVUs for CPT code 99221 (Level-one initial 
hospital visit with a typical time of 30 minutes and a complexity score 
of 8.5). If we chose to accept the RUC, we would be allowing a shorter, 
less complex service to be valued higher than a longer, more complex 
service. This assignment of work RVUs corrupts the integrity of a 
resource-based relative value system.
    We reestablished a fixed intraservice work intensity for initial 
hospital visits at 0.028. (There was minimal variation across the three 
levels due to the past budget neutrality adjustments.) This intensity 
is the same as the intensity for subsequent hospital visits (CPT codes 
99231 through 99233). As with the office visits, we increased the 
intraservice work intensity by 10 percent for both initial and 
subsequent hospital visits to account for an original undervaluing of 
the services.
    Following the change in the intraservice work intensities, we 
increased the preservice and postservice work percentage of 
intraservice work for the subsequent hospital visits to equal that of 
inpatient consultations. We then increased this percentage for all 
initial and subsequent hospital visit codes by 25 percent. Using the 
adjusted work intensities and the times included in the CPT descriptors 
for the codes, we calculated new work RVUs for all initial and 
subsequent hospital visits. The new work RVUs are on average 20 percent 
greater than the 1995 work RVUs for CPT codes 99221 through 99233.
    After making these adjustments to the initial hospital visit codes, 
we equated CPT code 99238 (Hospital discharge day management, 30 
minutes or less) to CPT code 99221 (Level-one initial hospital visit) 
when assigning new work RVUs. The 1995 work RVUs for CPT codes 99238 
and 99221 are equal. We have decided to maintain this relationship 
because there is no evidence to suggest that altering it is 
appropriate. We did not change the work RVUs for CPT code 99239 
(Hospital discharge day management, more than 30 minutes) because the 
code was new in calendar year 1996. Therefore, there has been no change 
over time in the service described by this code. Not revising the work 
RVUs for CPT code 99239 also places it just below CPT code 99222, a 
similar service of slightly greater duration.
    CPT codes 99217 through 99220 (Observation care services).
    The RUC did not make any recommendations regarding observation care 
services. As part of our effort to examine the whole group of 
evaluation and management services to maintain existing relationships, 
we reviewed these codes.
    In reviewing the work RVUs for CPT code 99217 (Observation care 
discharge), we noted that this code is relatively equivalent to CPT 
code 99238 (Hospital discharge day management). To reflect this 
relationship, we assigned work RVUs to this code equal to the work RVUs 
assigned to CPT code 99221, a 17.3 percent increase in work RVUs.
    The initial observation care services for new or established 
patients (CPT codes 99218 through 99220) match the services described 
by the initial hospital visits codes in the level of complexity. 
Because both sets of codes can only be billed once per date of service 
and patients in observation status are virtually identical to 
inpatients, we have made the work RVUs for CPT codes 99218 through 
99220 equivalent to the work RVUs assigned to CPT codes 99221 through 
99223, thereby increasing the work RVUs by an average of 21.6 percent.
    CPT codes 99241 through 99275 (Consultations).

[[Page 20037]]

    The RUC concluded that the work RVUs for office consultations and 
inpatient consultations should be ``equivalent at all levels of service 
except the highest. This preserves the same relationship that exists in 
the current RVUs for these services.'' We disagree with the RUC that 
inpatient and office consultations should be equally valued. The 1995 
work RVUs for these two families are not equivalent. The Harvard data 
demonstrated that inpatient consultations are more total work than 
office consultations, except at the lowest level of service. We believe 
that these services are not equivalent because the intraservice times 
are different and the associated postservice work is different (it is 
greater for inpatient consultations). However, we acknowledge that the 
level of complexity of the five levels of services for both inpatient 
and office consultations are the same.
    CPT codes 99241 through 99245 (Office or other outpatient 
consultations).
    The work associated with office consultations is more comparable to 
the work of office visits than to inpatient consultations. Therefore, 
we standardized the intraservice work intensities to make them 
equivalent to the 1995 intraservice work intensities of office and 
hospital visits (0.028). We also adjusted the preservice and 
postservice work percentage of intraservice work to equal the 1995 
percentage for office visits, a slight increase from 34.5 percent to 35 
percent.
    After these initial adjustments were made, we increased the 
intraservice work intensities by 10 percent to reflect our belief that 
the codes may have been originally undervalued. To account for the 
previously defined package of postservice work, we increased the 
preservice and postservice work percentage of intraservice work by 10 
percent. We did not increase the postservice work percentage by 25 
percent as we did with the office visits because we do not believe that 
the postservice work associated with an office consultation is as great 
as for an office visit. The postservice work for an office visit 
includes the ongoing management of the patient until the next face-to-
face visit. The postservice work for a consultation involves writing a 
report for the referring physician without the expectation, in the 
typical case, that the patient will return to the consulting physician, 
nor is the consulting physician responsible for any ongoing management 
of the patient. If the consultation results in a decision to perform 
surgery, any postservice management of the patient is included in the 
global surgical package.
    CPT codes 99251 through 99255 (Initial inpatient consultations).
    We standardized the intraservice work intensities to eliminate the 
minor variation that resulted from the annual budget neutrality 
adjustments to the RVUs. Based on the Harvard study, the intraservice 
work intensity is less than that of the office consultations.
    As we did with hospital visits, we increased the intraservice work 
intensities by 10 percent and the preservice and postservice work 
percentage of intraservice work by 25 percent. These increases reflect 
the belief that the services were initially undervalued and that the 
postservice work, now clearly defined, is greater due to changes over 
time. Postservice work associated with an inpatient consultation is 
greater than that for an office consultation because of the amount of 
work performed off-the-floor by the consulting physician, such as 
checking on laboratory results and reviewing x-rays. The new work RVUs 
are, on average, 17.5 percent greater than the 1995 work RVUs assigned 
to initial inpatient consultations.
    CPT codes 99261 through 99263 (Follow-up inpatient consultations).
    We disagree with the RUC that these codes should have the same work 
RVUs as their corresponding level of the subsequent hospital visit 
codes because the intraservice times are different and consultations 
and visits are not equivalent services. We agree that the intraservice 
work intensities and the preservice and postservice work percentages of 
intraservice work are probably the same for follow-up consultations and 
subsequent hospital visits. Therefore, we adjusted the preservice and 
postservice work percentage of intraservice work to match the 1995 
percentage of the subsequent hospital visits, a decrease from 34.5 
percent to 30.3 percent.
    Using the same rationale as for the initial inpatient 
consultations, we increased the intraservice work intensities by 10 
percent and the preservice and postservice work percentages of 
intraservice work by 25 percent. The new work RVUs for these services 
are about 14 percent higher than the 1995 work RVUs assigned to these 
codes.
    CPT codes 99271 through 99275 (Confirmatory consultations).
    We have decided not to change the work RVUs assigned to these 
codes. There is less work associated with a confirmatory consultation 
than a new patient office visit because the patient arrives with a 
preliminary diagnosis and the consulting physician is expected to 
provide an opinion or advice only. Not adjusting the work RVUs alters 
the existing relationships that these codes have with the rest of the 
evaluation and management services, but we believe that this change is 
appropriate.
    CPT codes 99281 through 99285 (Emergency department services).
    We disagree with the RUC's recommendation to maintain the 1995 work 
RVUs for emergency department services. The RUC did not consider the 
emergency room physicians' survey of CPT codes 99284 and 99285 adequate 
to support change. In our view, this survey was no less adequate than 
some surveys on which the RUC based its recommendations to increase the 
work RVUs of other evaluation and management codes. For consistency and 
equity, if other visit codes are being reviewed because of a belief 
that evaluation and management services were originally undervalued, 
emergency department services should also be reviewed.
    Given that we have assigned increased work RVUs to other evaluation 
and management services with complexities comparable to those of the 
emergency room services, we believe that we should make comparable 
changes to CPT codes 99281 through 99285. We do not have work 
intensities or CPT times for these codes, thus, we have assigned work 
RVUs to these services that maintain their proportional relationship 
with the work RVUs assigned to CPT code 99255, the non-critical care 
evaluation and management code with the highest work RVUs. The 
resulting work RVUs reflect an average 16.6 percent increase from the 
1995 work RVUs for emergency department services.
    CPT codes 99291 through 99297 (Critical care services).
    We have accepted the RUC recommendations for CPT codes 99291 and 
99292. Because the work RVUs for CPT codes 99293 through 99297 are 
based on the work RVUs of CPT codes 99291 and 99292, we have adjusted 
the work RVUs for these neonatal intensive care services. Using the 
formula articulated in the December 2, 1993 final rule for the 1994 
physician fee schedule (58 FR 63675), CPT code 99295 is equivalent to 4 
hours of critical care, CPT code 99296 is equivalent to 2 hours of 
critical care, and CPT code 99297 is equivalent to 1 hour of critical 
care. Therefore, the new work RVUs for CPT code 99295 (16.00) are 
calculated as follows: the work RVUs of CPT code 99291 (4.00) plus six 
times CPT code 99292 (6 x 2.00). The new work RVUs for CPT code 99296 
(8.00) equal the work

[[Page 20038]]

RVUs of CPT code 99291 (4.00) plus two times CPT code 99292 (2 x 2.00). 
The new work RVUs for CPT code 99297 (4.00) equal the work RVUs of CPT 
code 99291 (4.00).
    CPT codes 99301 through 99313 (Nursing facility services).
    In 1992, these codes were evaluated by a multispecialty refinement 
panel after commenters had requested that we assign work RVUs for 
nursing facility services that were more commensurate with the work 
RVUs assigned to the hospital visit codes. The commenters believed that 
nursing facility visits were most similar to hospital visits in time, 
intensity, and complexity. In general, the refinement panel agreed with 
the commenters. Therefore, we need to revise the work RVUs assigned to 
CPT codes 99301 through 99313 because we have revised the work RVUs for 
the initial and subsequent hospital visits. In order to maintain the 
relationship that the refinement panel created, we are assigning new 
work RVUs to the nursing facility services using the CPT times and the 
revised intensities for initial and subsequent hospital visits 
(intraservice intensity = 0.031 and the pre/post fixed percentage of 
intraservice work = 37.9 percent). Because the 1995 work RVUs resulted 
from a refinement panel, they do not consistently represent the above 
relationship. The proposed work RVUs use the intensities for initial 
and subsequent hospital visits for all the nursing facility codes. As a 
result, some of the proposed work RVUs are lower than the current work 
RVUs.
    CPT codes 99341 through 99353 (Home services).
    Our view is that the current relationship between the work RVUs for 
home visits and office visits should be maintained. The May 1992 
refinement panel equated the home codes to office visit codes. Our 
position is that a home visit takes longer to furnish than a service 
with a similar content (level of history, examination, and medical 
decision making) in an office setting, thus, the home visits are 
equated with office visits of greater length. Therefore, we assigned 
new work RVUs to the home visit codes using the following relationships 
with the new work RVUs for office visits:
    New patients:

CPT code 99341=CPT code 99203;
CPT code 99342=CPT code 99204;
CPT code 99343=CPT code 99205.

    Established patients:

CPT code 99351=CPT code 99213;
CPT code 99352=CPT code 99214;
CPT code 99353=CPT code 99215.

Because the 1995 work RVUs resulted from a refinement panel, the above 
relationships are not perfectly represented by the 1995 work RVUs. 
Therefore, in assigning new work RVUs with the above-described 
relationship, we have decreased the work RVUs for CPT codes 99351 and 
99352.
    CPT codes 99321 through 99333 (Domiciliary, rest home (e.g., 
boarding home), or custodial care services).
    The source of the 1995 work RVUs is HCFA. We assumed that these 
services require less work than home visits because of the availability 
of personal assistant services. We have taken the average of the 
relative proportion of the 1995 work RVUs for these codes to the 1995 
work RVUs of the home visit codes; on that basis, the domiciliary codes 
represent two-thirds of the work of the home visits. We are maintaining 
the existing relationship in the fee schedule. We calculated the new 
work RVUs for CPT codes 99321 through 99333 by multiplying the work 
RVUs for CPT codes 99341 through 99353 by 0.667. Specifically, the 
relationship between the two families is the following:

CPT code 99321=(0.667) CPT code 99341
CPT code 99322=(0.667) CPT code 99342
CPT code 99323=(0.667) CPT code 99343
CPT code 99331=(0.667) CPT code 99351
CPT code 99332=(0.667) CPT code 99352
CPT code 99333=(0.667) CPT code 99353

    CPT codes 99354 through 99357 (Prolonged physician service with 
direct (face-to-face) patient contact).
    We did not receive any RUC recommendations for these services. 
However, the 1995 work RVUs for these codes are based on the work RVUs 
of three other evaluation and management codes. This relationship was 
established in the December 8, 1994 final rule for the 1995 physician 
fee schedule (59 FR 63437 through 63440). To maintain this 
relationship, we have recalculated the work RVUs for CPT codes 99354 
through 99357 using the new work RVUs for CPT codes 99215, 99221, and 
99222. The work RVUs for CPT codes 99354 and 99355 are equal to the 
work RVUs assigned to CPT code 99215. The work RVUs for CPT codes 99356 
and 99357 are equal to the average of the work RVUs of CPT codes 99221 
and 99222.
    We understand that some physicians do not associate the use of 
prolonged service codes with potential increases in postservice work. 
Because the work RVUs for these prolonged service codes are based on 
other evaluation and management services, the use of a prolonged 
service code increases the potential amount of postservice work 
associated with the service being furnished to the Medicare 
beneficiary. The prolonged service codes describe additional face-to-
face time but CPT codes 99215, 99221, and 99222 include postservice 
time. By establishing a clear relationship among these codes, a 
prolonged face-to-face service may very well have increased postservice 
work. We believe that the use of these codes adequately describes the 
total service.
    CPT code 99375 (Care plan oversight).
    Because the current 1.73 work RVUs resulted from a 1995 refinement 
panel, we do not see any need to adjust the work RVUs further.
    CPT codes 99381 through 99412 (Preventive medicine services).
    The work RVUs assigned to these codes were added to the Medicare 
physician fee schedule in 1995. Because these codes were recently 
valued, we do not believe that we need to review the work RVUs for 
them. The intraservice work intensities and the preservice and 
postservice work have not changed since 1994 when the work RVUs were 
assigned. Because we are not adjusting the work RVUs, we are changing 
the rank order of the evaluation and management services. We believe 
that the new rank order better reflects the relative complexities of 
the office visits for a sick patient and for a healthy patient. For 
example, a preventive medicine visit for a 65-year old patient (CPT 
code 99397) has work RVUs assigned to it that are between a level-four 
and level-five office visit for an established, sick patient (CPT codes 
99214 and 99215). In fact, the work RVUs are only 3 percent less than 
the new RVUs assigned to CPT code 99215.
    CPT codes 99431 through 99440 (Newborn care).
    The work RVUs for these services resulted from a multispecialty 
refinement panel convened in the summer of 1994. The work RVUs for CPT 
code 99435 were assigned last summer. We do not believe that we need to 
revise these codes since the work RVUs were recently assigned.

Ophthalmology Codes

    We referred comments to the RUC requesting review of the 
ophthalmology codes for eye visits. The comments compared the work RVUs 
for these codes to the work RVUs for office visits.
    The RUC agreed that a permanent link should be established between 
the ophthalmological eye examination codes and evaluation and 
management services. The RUC recommended that

[[Page 20039]]

the following relationship be established for assigning work RVUs to 
the ophthalmological codes:
      CPT code 92002 (Ophthalmological services: medical 
examination and evaluation with initiation of diagnostic and treatment 
program; intermediate, new patient) should have the same work RVUs as 
CPT code 99202 (Level-two office/outpatient visit, new patient).
      CPT code 92004 (Ophthalmological services: medical 
examination and evaluation, with initiation of diagnostic and treatment 
program; comprehensive, new patient, one or more visits) should have 
the same work RVUs as CPT code 99203 (Level-three office/outpatient 
visit, new patient).
      CPT code 92012 (Ophthalmological services: medical 
examination and evaluation with initiation of diagnostic and treatment 
program; intermediate, established patient) should have the same work 
RVUs as CPT code 99213 (Level-three office/outpatient visit, 
established patient).
      CPT code 92014 (Ophthalmological services: medical 
examination and evaluation with initiation of diagnostic and treatment 
program; comprehensive, established patient, one or more visits) should 
have the same work RVUs as CPT code 99214 (Level-four office/outpatient 
visit, established patient).
    We agree with the relationships in the RUC recommendation. However, 
because the work RVUs that we assigned to CPT codes 99202, 99203, 
99213, and 99214 are different from the RUC-recommended work RVUs for 
these codes, the work RVUs that we have assigned to the 
ophthalmological codes are different from the RUC recommendation. We 
have assigned the following work RVUs:

------------------------------------------------------------------------
                                                          1995     New  
                       CPT code                           work     work 
                                                          RVUs     RVUs 
------------------------------------------------------------------------
92002.................................................     1.01     0.88
92004.................................................     1.61     1.34
92012.................................................     0.82     0.67
92014.................................................     1.06     1.10
------------------------------------------------------------------------

These work RVUs represent a reduction from the current work RVUs for 
eye examinations, except for the slight increase in work RVUs for CPT 
code 92014.
2. Review of Studies by Abt Associates, Inc.
    The RUC evaluated the methodologies used by Abt Associates, Inc. 
before considering the actual recommended work RVUs. The RUC concluded 
that the Abt studies for orthopaedics and otolaryngology produced 
correct rank-ordering of codes within the respective specialties, but 
that an additional study would need to be conducted to produce 
compelling evidence that the proposed work RVUs were correct. The RUC 
did not reach any conclusions about the Abt study commissioned by the 
American Society of Anesthesiologists but indicated that the specialty 
was still entitled to demonstrate the validity of the study's 
methodology through the normal RUC update process.
    Following the RUC review, the American Academy of Orthopaedic 
Surgeons, with our concurrence, withdrew its Abt study from 
consideration and developed a list of 83 codes for which it conducted a 
survey and submitted individual recommendations. The American Academy 
of Otolaryngology--Head and Neck Surgery, Inc. provided detailed 
comments on about 100 codes, in addition to submitting an Abt study. 
The American Academy of Otolaryngology--Head and Neck Surgery, Inc. 
evaluated the work of the individually identified codes and made 
recommendations for work RVUs. The American Society of 
Anesthesiologists conducted further research to validate its Abt study 
and presented the results.
3. Pediatrics
    Section 124 of the Social Security Act Amendments of 1994 (Public 
Law 103-432), enacted on October 31, 1994, requires the development of 
RVUs for the full range of pediatric services. As we noted in our 
December 8, 1994 final rule, we believe that the work RVUs for the full 
range of pediatric services are essentially complete (59 FR 63454). We 
proposed to use the 5-year review process to determine whether there 
are significant variations in the resources used in furnishing similar 
services to children and adults.
    The comments submitted by the American Academy of Pediatrics 
responded to our question in the December 8, 1994 final rule of whether 
the work involved in treating pediatric patients is different from that 
involved in treating adult patients (59 FR 63454). The American Academy 
of Pediatrics requested that new codes be added to the CPT to describe 
different age categories of patients, and that work RVUs be assigned to 
these codes reflecting the differences in work for patients of 
different ages. Following adoption of new or revised CPT codes for 
pediatric services, the RUC will recommend work RVUs.
    If, after reviewing the RUC recommendations, we choose to assign 
work RVUs for these new codes, we will do so in a future annual 
physician fee schedule update.
4. Anesthesia
    Comment: The American Society of Anesthesiologists submitted the 
report of a study conducted by Abt Associates, Inc. covering all the 
current CPT codes for anesthesia services. Abt conducted the study to 
assess the work of anesthesia services in a way that does not rely on 
the current anesthesia conversion factor.
    We base Medicare payments for anesthesia services on allowable base 
and time units. We have developed a uniform relative value guide in 
which the base unit per anesthesia code is largely based on the 
American Society of Anesthesiologists' relative value guide. We 
published the anesthesia codes and their imputed work RVUs in our 
December 8, 1994 final rule (59 FR 63456 through 63459) for the 1995 
physician fee schedule and in the January 3, 1995 correction notice (60 
FR 48 through 49). Anesthesiologists report the actual anesthesia time 
for each procedure on the claim, and the carrier converts the time to 
time units. The carriers then multiply the sum of base and time units 
by the anesthesia conversion factor.
    Although the relative values for each service are not based on the 
Harvard study, we used the Harvard study to determine the anesthesia 
conversion factor established under the physician fee schedule in 1992. 
As with other specialties, Harvard first conducted a survey of 
anesthesiologists of the work involved in a number of anesthesia 
services, including two procedures performed by anesthesiologists 
subject to the conventional RVU payment methodology instead of the base 
and time unit payment methodology. These are CPT code 93503 (Insertion 
and placement of flow directed catheter (e.g., Swan-Ganz) for 
monitoring purposes) and CPT code 62279 (Injection of diagnostic or 
therapeutic anesthetic or antispasmodic substance (including 
narcotics); epidural, lumbar or caudal, continuous). Two evaluation and 
management services were also included. Then, Harvard selected cross-
specialty links and placed the anesthesia services on the common scale 
with other specialties. Our use of these results produced a 42 percent 
reduction in the work RVUs for anesthesia, which was a 29 percent 
reduction in the anesthesia conversion factor.
    The American Society of Anesthesiologists' comments claimed that 
the Harvard cross-specialty process produced flawed results, and this 
is the reason for the Abt study. The study involved Abt convening a

[[Page 20040]]

multidisciplinary panel of 12 physicians. The panel accepted as correct 
the average anesthesia times for 15 surgical procedures selected for 
in-depth study. The panel separated the anesthesia time for each 
service into five components: preservice work, induction, procedure, 
emergence, and postservice work. The sum of the times for induction, 
procedure, and emergence were, in almost all cases, equal to the 
intraservice times we supplied.
    For each component of these reference services, the panel rated the 
intensity (defined as the intraservice work per unit time (IWPUT)) of 
the work effort. The panel selected four key procedures, listed in the 
table below, as the fundamental levels of intensity for use in this 
comparison, with the unit of time being 1 minute:

------------------------------------------------------------------------
                                                              Intensity 
    CPT code                     Descriptor                    (IWPUT)  
------------------------------------------------------------------------
99204..........  Office or other outpatient visit for the          0.027
                  evaluation and management of a new                    
                  patient.                                              
62279..........  Injection of diagnostic or therapeutic            0.044
                  anesthetic or antispasmodic substance                 
                  (including narcotics); epidural, lumbar               
                  or caudal, continuous.                                
99291..........  Critical care, evaluation and management          0.061
                  of the unstable or critically injured                 
                  patient, requiring the constant                       
                  attendance of the physician; first hour.              
33405..........  Replacement, aortic valve, with                   0.090
                  cardiopulmonary bypass; with prosthetic               
                  valve other than homograft.                           
------------------------------------------------------------------------

    The panel then multiplied the intensity values by the time for each 
component to produce recommended work RVUs on the same scale as other 
services in the Medicare payment schedule. The 15 studied services 
represent 45.6 percent of total Medicare payments for anesthesia 
services.
    For illustrative purposes, the panel presented an example for CPT 
code 00350 (Anesthesia for procedures on major vessels of neck; not 
otherwise specified) from the Abt study. The surgical CPT code is 35301 
(Thromboendarterectomy, with or without patch graft; carotid, 
vertebral, subclavian, by neck incision).
    CPT Code 00350 (Anesthesia for procedures on major vessels of neck; 
not otherwise specified).

------------------------------------------------------------------------
                                             Time    Intensity          
                 Period                   (minutes)   (IWPUT)     Work  
------------------------------------------------------------------------
Preanesthesia...........................        20     @ 0.027    = 0.54
Induction...............................        25     @ 0.061    = 1.53
Procedure...............................       120     @ 0.044    = 5.28
Emergence...............................        20     @ 0.061    = 1.22
Postanesthesia..........................        20     @ 0.027    = 0.54
                                                               ---------
    Total Work..........................  .........  .........    = 9.11
------------------------------------------------------------------------

The panel followed the same process for each of the 15 procedures. The 
panel performed a regression analysis to extrapolate from these 15 
procedures to the other anesthesia services in CPT.
    Based on the results of the panel's study, the American Society of 
Anesthesiologists recommended that the work RVUs for all anesthesia 
services be increased by 40 percent through an increase of 
approximately 27 percent in the anesthesia conversion factor.
    RUC Evaluation/Recommendation: The RUC's evaluation of the American 
Society of Anesthesiologists' comment focused initially on the 
methodology employed by Abt, particularly the use of assigned intensity 
levels rather than measures of physician work. The RUC suggested to the 
American Society of Anesthesiologists that, because many 
anesthesiologists have experience in other specialties, a study could 
be conducted of anesthesiologists who are board-certified in more than 
one specialty. In this study, physicians could assess the work involved 
in reference services compared to the work involved in both anesthesia 
and nonanesthesia services. This study could validate the approach of 
assigning intensity levels to the discrete time periods.
    The RUC also expressed concern about the particular levels of 
intensity selected, especially the use of the IWPUT of CPT code 99204 
(Office or other outpatient visit for the evaluation and management of 
a new patient) as the lowest value for any anesthesia work, which is 
used for the period when the surgeon is performing the operation. The 
RUC noted that the regression analysis used to expand the study from 
the 15 services directly studied to the 250 anesthesia codes in the CPT 
appeared to work well.
    In response to the RUC's request, the American Society of 
Anesthesiologists conducted a RUC-like survey of anesthesiologists who 
are board certified in more than one specialty. This survey, however, 
produced even higher work RVUs (median survey values were on average 30 
percent higher) than the physician panel produced. The American Society 
of Anesthesiologists also reconvened the multidisciplinary panel to 
review the survey results and to discuss the levels of intensity 
assigned to the codes. The panel used the survey results to refine its 
previous estimates, but did not adopt the survey results as a 
substitute for its previous approach. The panel also confirmed its view 
that the intensity levels selected are correct.
    The RUC asked for an additional explanation of the intensity levels 
selected, particularly the use of 0.027, the IWPUT for evaluation and 
management services, as the reference service for that period of time 
when the surgeon is performing the procedure and the patient is 
anesthetized. The American Society of Anesthesiologists' advisor 
explained that during this period the anesthesiologist is continuously 
monitoring the patient, integrating the anesthesia care with what the 
surgeon is doing, integrating data, making decisions, and doing 
whatever has to be done for the patient. The panel considered this to 
be equivalent to face-to-face evaluation and management services.
    The RUC concluded that, although this period of time clearly 
involved two of the components of physician work, time and stress 
(because of the risk of harm to the patient), this part of each 
procedure does not involve the same mental effort, judgment, technical 
skill, and physical effort as an evaluation and management encounter.
    Following this review, the American Society of Anesthesiologists 
made some adjustments to its recommendations by reducing the IWPUT for 
the period of time considered to be equivalent to evaluation and 
management services from 0.027 to 0.025. It also shortened the number 
of minutes to which the two highest intensity levels were assigned.
    Based on the review, the RUC did not find the anesthesia study 
sufficiently compelling to justify a recommendation changing the work 
RVUs. The RUC concluded that the method used was a reasonable estimate 
of the rank order of the procedures. The RUC was concerned, however, 
that the actual magnitudes were not validated and therefore could not 
be directly compared to other specialties.

[[Page 20041]]

    The RUC agreed to reconsider this issue at its February 1996 
meeting and allowed Abt Associates to make an additional presentation. 
The RUC has not transmitted to us the results of its recommendation 
made at that meeting. Since we have not yet received the final 
recommendation, we will maintain the current base unit values and the 
current 1996 national conversion factor of $15.28 per unit.
5. Codes Without Work Relative Value Units
    Comment: Two specialty societies objected to certain codes having 
zero work RVUs. The American Psychological Association believed we 
should adopt the 1993 RUC work RVU recommendations for CPT codes 90830 
(a code which was deleted and replaced by CPT code 96100 (Psychological 
testing) in 1996), 95880 (Cerebral aphasia testing), 95881 (Cerebral 
developmental test), 95882 (Cognitive function testing), and 95883 
(Neuropsychological testing). Those work RVU recommendations were in 
the 2.00 to 2.20 range. Also, the American Academy of Audiology 
believed that work RVUs of greater than zero should be assigned to 
certain audiology function tests that now have zero work RVUs.
    Essentially, the organizations contended that our view that only 
the work of a physician, such as a doctor of medicine or a doctor of 
osteopathy, should qualify for work RVUs, is erroneous. They contended 
that everything that is included within the definition of a physician 
service under section 1848(j)(3) of the Act has work that is done by a 
``physician'' and should therefore have physician work RVUs.
    Response: We disagree. Section 1848 of the Act defined physician 
services to delineate which services would be paid under the physician 
fee schedule. The Congress intended that more than the professional 
services of doctors of medicine and doctors of osteopathy, that is, 
physicians as defined in section 1861(r) of the Act, be included for 
payment under the physician fee schedule.
    We currently believe, however, that under section 1848 of the Act, 
only the work of physicians, as defined in section 1861(r) of the Act, 
their ``incident to'' employees, and independently practicing 
occupational and physical therapists qualify for payment through the 
work RVUs.
    Every service for which payment is made under the physician fee 
schedule requires the expenditure of work resources by some entity. X-
ray technicians ``work'' to produce the technical component of a 
diagnostic chest x-ray. Radiology technicians ``work'' to produce the 
technical component of radiation therapy. However, the Congress did not 
intend that every expenditure of ``work'' under the fee schedule be 
paid through the physician work RVUs. In section 1848(c)(1)(B) of the 
Act, the term ``practice expense component'' is defined to clearly 
include the wages of personnel who perform or create physician fee 
schedule services. Their labor is reimbursed through the practice 
expense component rather than the physician work component. Practice 
expense RVUs are currently charge-based, but, in 1998, they will be 
resource-based and there will be an opportunity for appropriate 
adjustments to these practice expense RVUs.
6. Codes Referred to the Physicians' Current Procedural Terminology 
Editorial Panel
    For CPT 1997, the AMA placed a moratorium on specialty requests for 
coding changes in order to prevent a large number of new codes from 
being implemented at the same time as the changes in the physician fee 
schedule due to the 5-year review. The only coding change requests 
being considered are those for new technologies that cannot currently 
be reported with other codes in CPT and those for codes that are not on 
the physician fee schedule (for example, clinical laboratory services). 
The RUC and the CPT Editorial Panel had also anticipated, however, that 
a small percentage of the issues included in the 5-year review would 
require review by CPT before they could be considered by the RUC, 
because it appeared likely that some comments on misvalued codes would 
actually be due to the codes' nomenclature.
    After reviewing the comments referred for inclusion in the 5-year 
review, the RUC identified 25 issues that it recommended be considered 
by CPT before further review by the RUC. The RUC requested the 
specialty societies to submit proposals to CPT in time for any coding 
changes to be reviewed by the RUC and reflected in CPT 1997 and the 
1997 physician fee schedule, simultaneous with the other changes due to 
the 5-year review. We discuss these issues in Table 3, ``Codes Referred 
to the Physicians' Current Procedural Terminology Editorial Panel,'' 
which follows.
    In addition to issues requiring further review by CPT, four issues 
were addressed in 5-year review comments that had already been 
addressed by the CPT Editorial Panel and the RUC as part of the updates 
for CPT 1996. We also discuss these issues in Table 3.

BILLING CODE 4120-01-P

[[Page 20042]]

[GRAPHIC] [TIFF OMITTED] TN03MY96.025



[[Page 20043]]

[GRAPHIC] [TIFF OMITTED] TN03MY96.026



BILLING CODE 4120-01-C

[[Page 20044]]

    The American Academy of Pediatrics submitted a public comment 
requesting that 480 CPT codes each be divided into several codes for 
different age categories and about 20 new codes be added for pediatric 
services that are not currently described in CPT. To address these 
issues, a Pediatrics Committee, comprised of RUC members and two 
members of the CPT Editorial Panel, was formed. This committee has made 
several recommendations to the American Academy of Pediatrics about how 
to handle the issues raised in its comments.
    The RUC referred 65 codes to the CPT Editorial Panel to be 
considered for coding changes before further review by the RUC. These 
codes are included in the Addendum, ``Codes Subject to Comment.''
7. Potentially Overvalued Services
    Comment/RUC Evaluation/Recommendation: Because specialty societies 
would be likely to identify the most important undervalued services 
during the public comment period for the December 8, 1994 final rule 
(59 FR 63410), several groups, including the Physician Payment Review 
Commission, underscored the need to identify potentially overvalued 
services. The RUC and HCFA performed four complementary analyses to 
identify potentially misvalued services, based primarily on recent 
Medicare claims data. These analyses are discussed below.
    HCFA provided data on IWPUT and other characteristics of services 
to carrier medical directors to use in a systematic analysis to 
identify misvalued services. As a result of this review, HCFA referred 
300 potentially misvalued codes to the RUC. Those codes are included in 
Table 1 of this notice.
    The RUC analyzed trends in the frequency and site-of-service for 
services furnished between 1992 and 1994. It identified services for 
which the frequency increased by an average of more than 25 percent per 
year, the percentage of times the service was furnished in an inpatient 
setting decreased by more than 5 percent per year, and there were more 
than 1,000 Medicare claims for the service in 1992 and 1994.
    The RUC believed that the combination of a high rate of increase in 
annual frequency combined with a shift from inpatient to outpatient 
site-of-service could be an indicator that the services were becoming 
more commonly furnished and that the work involved each time the 
service was performed may be less than the current work RVUs imply.
    The RUC also conducted an analysis of IWPUT, although the analysis 
differed somewhat from the HCFA analysis. The RUC divided the codes 
into clinical groupings and calculated the mean IWPUT for each group. 
The RUC identified individual services as being potentially overvalued 
if they had an IWPUT more than 3 standard deviations above the mean for 
the group.
    Finally, the RUC identified a number of codes for which the final 
Harvard work RVUs are significantly lower than the 1995 Medicare work 
RVUs. This relationship suggested that the Medicare work RVUs are too 
high.
    After eliminating from these three categories those codes that were 
already included in the 5-year review because of the comment process, 
the RUC asked us if 33 of these potentially overvalued codes could be 
included in the 5-year review. Since the codes were not identified 
until June 1995, the RUC also asked if it could take more time, if 
necessary, to complete review of these codes. We agreed to add the 
codes and to allow more time for review. We have noted these 33 codes 
in Table 1 of this notice.
    The RUC disseminated the list to all the specialty societies on its 
Advisory Committee and, as with the codes identified through the 
comment process, asked them to indicate whether they wished to be 
involved in developing the primary recommendation to the RUC for each 
code. The RUC asked the specialty societies that responded 
affirmatively to take one of the following four actions:
     Recommend lower work RVUs for the code.
     Demonstrate, if the code was identified by the RUC's 
analysis of the Harvard data, that it is appropriate that the service 
have a higher IWPUT than other clinically related codes or that the 
current Medicare work RVUs are more appropriate than the Harvard work 
RVUs.
     Demonstrate, if the code was identified by the AMA trends 
analysis, that the service work has not decreased over time.
     Show why the code was identified for review in error.
    The full RUC, not one of the RUC workgroups, conducted the primary 
review of most of these services. For 10 of the 33 codes, the specialty 
societies recommended that the work RVUs be reduced, and the RUC 
concurred with these recommendations. Five of them were found to have 
been identified in error because of problems in the Medicare Part B 
data or because previous coding changes were responsible for the trend 
changes. The RUC reviewed an additional 17 services and recommended 
that the current work RVUs be maintained. We did not receive RUC 
recommendations for the 6 remaining codes. One code, CPT code 67210, 
was sent to the CPT Editorial Panel for clarification. The RUC has not 
completed its consideration of the other 5 codes.
    HCFA Decision: We agree with all but one of the RUC 
recommendations. For CPT codes 28010, 33970, 67210, 77420, 77425, and 
77430, we are proposing to maintain the current work RVUs because we 
have no RUC recommendations or additional evidence to assist us in 
revising the values.
    CPT code 37201 (Transcatheter therapy, infusion for thrombolysis 
other than coronary).
    The current work RVUs are 7.25. The RUC agreed with the Society for 
Cardiovascular and Interventional Radiology that the frequency of 
claims for this code is growing because thrombolytic infusion is an 
effective therapy for thrombosed arteries and grafts, allowing 
physicians to save patient limbs. The service is still a relatively new 
technology and the RUC believed that it is appropriately valued.
    Unlike CPT code 34111 (Removal of arm artery clot), a similar open 
procedure with a 90-day global period, CPT code 37201 is billed with an 
evaluation and management code and a supervision and interpretation 
code. Therefore, we believe that the work RVUs for CPT code 37201 
should approximate the work RVUs for CPT code 34111 (7.18) minus the 
work RVUs for a level-two subsequent hospital visit (0.88) and the work 
RVUs for the radiological supervision and interpretation, CPT code 
75894 (1.31). We are proposing 5.00 work RVUs for CPT code 37201.

D. Other Issues

1. Budget Neutrality
    In conjunction with our review of proposed changes to the work 
RVUs, we reexamined our method for making the required budget 
neutrality adjustments. Past adjustments were made across-the-board, 
either on all RVUs or, beginning in 1996, on the conversion factors. 
Because this is a 5-year review of work RVUs, we believe the budget 
neutrality adjustment should be made only on the work RVUs.
    Many services on the physician fee schedule have no work RVUs 
assigned to them. Services with no work RVUs were not subject to this 
5-year review.

[[Page 20045]]

If we made the budget neutrality adjustment either on all RVUs or on 
the conversion factors, those services would be negatively affected by 
a process that did not consider those codes. Other services that would 
be adversely affected by an across-the-board approach to budget 
neutrality are those with a practice expense percentage of total RVUs 
that is greater than the average practice expense percentage for the 
physician fee schedule.
    Next year we will propose new resource-based RVUs to capture the 
practice expenses associated with each CPT and alphanumeric HCPCS code 
on the physician fee schedule. We expect to make a budget neutrality 
adjustment as a result of this change. At that time, we plan to make 
the adjustment across the practice expense RVUs. Making the budget 
neutrality adjustment only across the type of RVUs affected maintains 
the integrity of the different pools for work, practice expense, and 
malpractice expense.
    Therefore, we propose a budget neutrality adjustment resulting from 
the 5-year review of work RVUs on work RVUs only. This proposal is 
consistent with the Physician Payment Review Commission's 
recommendation in its 1996 Annual Report to Congress that 
``Implementation of any changes to work relative values as a result of 
the current five-year review should be budget neutral with respect to 
work values and should not affect practice expense and malpractice 
expense relative values.''
    Based on our proposed work RVUs, the necessary budget neutrality 
adjustment across the work RVUs is a decrease of 7.63 percent. This 
percentage is subject to change depending on refinements made in 
response to the comments. Because this adjustment would be on only the 
work RVUs, it does not directly correspond to the impact on payments. 
The total impact of this adjustment will also be somewhat mitigated by 
the anticipated updates to the conversion factors for 1997. For a 
discussion of the impact on Medicare payments, refer to section V.B. To 
make the adjustment, we plan to rescale across the work RVUs. However, 
in recognition that changing RVUs causes some administrative burdens 
for other payers, we will consider developing a new budget neutrality 
adjuster that will be applied only to the work RVUs if we receive 
comments requesting that we do so. In this case, the payment formula 
would be calculated as follows: [(work RVU) (work adjuster) (work 
geographic practice cost index) + (practice expense RVU) (practice 
expense geographic practice cost index) + (malpractice RVU) 
(malpractice geographic practice cost index)]  x  conversion factor. 
From year to year this new adjuster would reflect the cumulative 
adjustment needed to maintain work budget neutrality.
    We will continue to make any budget neutrality adjustment due to 
policy changes on the conversion factors and not on the RVUs. Under our 
proposal, only adjustments resulting from RVU changes will be made on 
the appropriate pool of RVUs (for example, work, practice expense, or 
malpractice expense).
2. Calculation of Practice Expense and Malpractice Expense Relative 
Value Units
    As we noted in our December 8, 1994 final rule, practice expense 
and malpractice expense RVUs were not subject to comment and will not 
be recalculated as a part of the 5-year review of work RVUs (59 FR 
63454). Section 1848(c)(2) of the Act requires that the practice 
expense and malpractice expense RVUs be calculated based upon 1991 
allowed charges and practice expense and malpractice expense shares for 
the specialties that furnish the services. When we calculated the 
practice expense and malpractice expense RVUs, we aged 1989 actual 
charges forward to approximate 1991 actual charges, and we used the 
specialty practice shares from the AMA's Socioeconomic Survey of 
practice expenses by specialty.
    In addition, as we mentioned in our December 8, 1995 final rule, we 
are presently developing a methodology for a resource-based system for 
practice expense RVUs for each physician service (60 FR 63169). We 
expect to publish a proposed rule in the spring of 1997 and will 
implement the resource-based practice expense RVUs beginning January 1, 
1998.
3. Impact of Work Relative Value Unit Changes for Evaluation and 
Management Services on Work Relative Value Units for Global Surgical 
Services
    In the November 25, 1992 final notice for the 1993 physician fee 
schedule, we increased the RVUs for some evaluation and management 
services. At the time, we stated, ``Because we have not increased the 
RVUs for the lower level codes, we do not believe it would be necessary 
or appropriate to revise the work RVUs of any surgical procedures 
resulting from our refinement of the evaluation and management 
services.'' (57 FR 55951) We based this decision on evidence from the 
Harvard study that indicates that the evaluation and management 
services included in the global surgical packages are typically 
comparable to lower level visits.
    Based on data from the 5-year review of work RVUs, we are proposing 
to increase most of the work RVUs for evaluation and management 
services, including those for lower level established patient visits. 
Our reasons for increasing these work RVUs suggest that making 
corresponding across-the-board increases to the work RVUs for all 
global surgical packages may be inappropriate. To the extent that 
evaluation and management services have been undervalued relative to 
procedural services, it can be inferred that we should not increase the 
procedural services simply because we increased the work RVUs for the 
evaluation and management services. In many cases the work RVUs for 
global services have been reviewed, either as part of the 5-year review 
or for new and revised codes, and significant aberrations of the work 
in the postoperative office visits have not been obvious. The 
assumption that work RVUs for evaluation and management services are 
directly related to global surgical services has not been validated.
    We also revised the work RVUs for the evaluation and management 
services in recognition of the increase in preservice and postservice 
work. Many of the items included in preservice and postservice work are 
not of equal magnitude when considering preoperative and postoperative 
visits. We believe that the preservice and postservice work associated 
with postoperative visits has not changed. The arguments about 
increased case management, telephone calls, and documentation that 
supported changes for evaluation and management services may not hold 
true for visits in a global surgical period where many elements may be 
duplicative. For example, the documentation requirements are much lower 
for a surgical follow-up visit than for an established patient office 
visit because individual claims subject to audit are not being 
submitted. The visits also all fall within a defined time limit (that 
is, 0, 10, or 90 days). Regular office visits are not so predictable, 
increasing the time that the postservice work may cover.
    When we originally valued most of the global surgical packages, we 
did not use a discreet building block approach. We acknowledged the 
need to incorporate evaluation and management equivalents but did not 
use specific evaluation and management services as described by CPT. 
For all these reasons, we believe that the global surgical packages 
should be valued solely on their own merit rather than in

[[Page 20046]]

connection with the evaluation and management services.
    We did not receive comments that suggested we make changes to the 
work RVUs assigned to CPT codes with global periods to reflect changes 
in the work RVUs for the evaluation and management services. We did 
receive comments to review many procedure codes because of changes in 
technology, work, skill, etc. Unlike the comments regarding the need to 
review the evaluation and management services, the comments on surgical 
codes did not discuss any change in the postservice work associated 
with the postoperative visits. Additionally, the RUC did not express an 
opinion on this issue.
    Given a lack of evidence that the preservice and postservice work 
associated with surgical procedures has changed, we are not adjusting 
the work RVUs of services with a global period. We have no plans to 
adjust the global surgical packages as a result of our increases to the 
evaluation and management services. If the physician community, through 
the RUC, makes a recommendation to us on this issue, we will consider 
reviewing our current policy. However, until we receive compelling 
evidence to make adjustments to the global surgical packages, we will 
make no across-the-board adjustments outside of our regular review of 
work RVUs.
4. Future Review
    Since the physician fee schedule was implemented in 1992 we have 
undertaken significant annual revisions to the work RVUs for large 
numbers of codes, and with the publication of a final rule later this 
year we will have completed the first 5-year review. We believe that 
through these extensive efforts the work RVUs are now largely correct. 
We believe that a significant case would need to be made to change the 
work RVUs for the overwhelming bulk of procedures.
    For the future, we are considering periodic review of the physician 
fee schedule as necessary. However, there are several categories of 
codes and issues for which we have tentative plans to review prior to 
the next 5-year review: Services that typically require reporting more 
than one code to describe the service correctly; the relationship of 
physician work between analogous open and closed procedures; radiation 
oncology; and rank order anomalies within families.
5. Nature and Format of Comments on Work Relative Value Units
    We will accept comments on the proposed work RVUs for the codes 
identified in the Addendum of this notice. We will also accept comments 
on the anesthesia codes. Comments should discuss how the work 
associated with a given CPT/HCPCS code is analogous to the work in 
other services or discuss the rationale for disagreeing with the RUC 
recommendation. We are especially interested in information or 
arguments that were not presented in earlier comments.

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).

IV. 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.

V. Regulatory Impact Analysis

A. Regulatory Flexibility Act

    Consistent with the Regulatory Flexibility Act (5 U.S.C. 601 
through 612), we prepare a regulatory flexibility analysis 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 
Regulatory Flexibility Act, all physicians are considered to be small 
entities.
    Although the changes included in this proposed notice are not 
expected to have a significant economic impact on a substantial number 
of small entities, we are preparing a voluntary regulatory flexibility 
analysis. The provisions of this proposed notice would have varying 
effects on the distribution of Medicare physician payments across 
specialties. 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 
notice. 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 RVUs. However, with few 
exceptions, we expect that the impact on individual medical 
practitioners would be limited.

B. Effects on Physician Payments

1. Impact Estimation Methodology
    Physician fee schedule impacts were estimated by comparing 
predicted physician payments under a continuation of the current work 
RVUs to the estimated payments under the proposed work RVUs resulting 
from the 5-year review. The impact analysis does not incorporate 
assumptions about volume and intensity responses.
2. Overall Fee Schedule Impact
    Because the proposed work RVUs cause an increase in total estimated 
payments under the physician fee schedule, we must reduce payments in 
order to maintain budget neutrality as required by section 
1848(c)(2)(B)(ii)(II) of the Act. As we discussed in section II.D.1. of 
this notice, we are proposing to make the budget neutrality adjustment 
on the physician work component on the physician fee schedule. In the 
discussion below of differential impacts by specialty, we have 
incorporated this projected downward adjustment of 7.63 percent.
3. Specialty Level Effect
    Table 4, ``Five-Year Review Impact on Medicare Payments by 
Specialty,'' shows the estimated percentage change in Medicare 
physician payment from the current work RVUs to the proposed work RVUs 
by specialty. The specialties are ranked according to the impact of the 
work RVU change on Medicare payments. The magnitude of the impact 
depends on the mix of services the specialty provides. In general, 
because of the proposed changes to the evaluation and management 
services, those specialties that account for more visits and fewer 
procedures are expected to experience larger increases in Medicare 
payments than procedurally oriented specialties, including surgical 
specialties.
    Because the budget neutrality adjustment reduces payments for 
services with work RVUs which did not experience any change as a result 
of the 5-year review, specialties that primarily perform these services 
will experience a negative impact. For example, although the one code 
that chiropractors can bill under Medicare, HCPCS code A2000, was 
unchanged, chiropractors are expected to experience a 4.4 percent 
decrease in Medicare payments. This decrease is less than the budget 
neutrality adjustment of 7.63 percent because only 60 percent of 
payments for

[[Page 20047]]

HCPCS code A2000 are attributable to the work RVUs. The rest of the 
payments are attributable to the practice expense and malpractice 
expense RVUs which were unaffected by the budget neutrality adjustment. 
The total impact of the budget neutrality adjustment will be somewhat 
mitigated by the anticipated updates to the conversion factors for 
1997.

   Table 4.--Five-Year Review Impact on Medicare Payments by Specialty  
------------------------------------------------------------------------
                                                               Impact of
                                                                work RVU
                          Specialty                              change 
                                                               (percent)
------------------------------------------------------------------------
Family Practice..............................................        4.6
Internal Medicine............................................        4.2
Hematology Oncology..........................................        3.9
Emergency Medicine...........................................        3.7
Pulmonary....................................................        3.6
General Practice.............................................        3.5
Rheumatology.................................................        3.4
All Other Physicians.........................................        2.9
Neurology....................................................        2.6
Obstetrics/Gynecology........................................        2.0
Clinics......................................................        1.2
Cardiology...................................................        1.1
Otolaryngology...............................................        0.9
Vascular Surgery.............................................        0.5
Gastroenterology.............................................        0.2
Neurosurgery.................................................        0.2
Nephrology...................................................       -0.4
General Surgery..............................................       -0.8
Orthopedic Surgery...........................................       -1.5
Suppliers....................................................       -1.6
Urology......................................................       -1.6
Oral Surgery.................................................       -1.8
Thoracic Surgery.............................................       -1.8
Plastic Surgery..............................................       -2.0
Psychiatry...................................................       -2.2
Cardiac Surgery..............................................       -2.4
Radiology....................................................       -2.6
Podiatry.....................................................       -2.6
Radiation Oncology...........................................       -3.1
Ophthalmology................................................       -3.8
Nonphysician Practitioners...................................       -4.1
Pathology....................................................       -4.2
Optometrist..................................................       -4.5
Chiropractor.................................................       -4.6
Anesthesiology...............................................       -4.7
Dermatology..................................................       -6.2
All Physician Specialties....................................        0.0
------------------------------------------------------------------------

C. 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 
Regulatory Flexibility Act. 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 notice would have little direct effect on payments to 
rural hospitals since this notice would change only payments made to 
physicians and certain other practitioners under Part B of the Medicare 
program and would not change 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 notice would not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.


    Authority: Section 1848(c) of the Social Security Act (42 U.S.C. 
1395w-4(c)).

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

    Dated: April 26, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Dated: April 26, 1996.
Donna E. Shalala,
Secretary.

Addendum--Codes Subject to Comment

    This addendum lists the codes reviewed during the 5-year review. 
This addendum includes the following information:
     CPT/HCPCS (HCFA Common Procedure Coding System) code. This 
is the CPT or alphanumeric HCPCS code for a service.
     Modifier. A modifier -26 is shown if the work RVUs 
represent the professional component of the service.
     Description. This is an abbreviated version of the 
narrative description of the code.
     Proposed work RVUs. This column contains the proposed RVUs 
for physician work. The work RVUs shown have not been adjusted for 
budget neutrality.

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[FR Doc. 96-10902 Filed 5-2-96; 8:45 am]
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