[Federal Register Volume 61, Number 128 (Tuesday, July 2, 1996)] [Proposed Rules] [Pages 34614-34662] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-16744] [[Page 34613]] _______________________________________________________________________ Part IV Department of Health and Human Services _______________________________________________________________________ Health Care Financing Administration _______________________________________________________________________ 42 CFR Parts 410 and 415 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 1997; Proposed Rule Federal Register / Vol. 61, No. 128 / Tuesday, July 2, 1996 / Proposed Rules [[Page 34614]] DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration 42 CFR Parts 405, 410, and 415 [BPD-852-P] RIN 0938-AH40 Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 1997 AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This proposed rule discusses several policy changes affecting Medicare payment for physician services including payment for diagnostic services and transportation in connection with furnishing diagnostic tests. The proposed rule also discusses comprehensive locality changes and changes in the procedure status codes for a variety of services. DATES: Comments will be considered if we receive them at the appropriate address, as provided below, no later than 5 p.m. on September 3, 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-852-P, P.O. Box 26688, Baltimore, MD 21207-0488. 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-852-P. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 309-G of the Department's offices at 200 Independence Avenue, SW., Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890). For comments that relate to information collection requirements, mail a copy of the comments to: Allison Herron Eydt, HCFA Desk Officer, Office of Information and Regulatory Affairs, Room 10235, New Executive Office Building, Washington, DC 20530. 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SUPPLEMENTARY INFORMATION: To assist readers in referencing sections contained in this preamble, we are providing the following table of contents. Some of the issues discussed in this preamble affect the payment policies but do not require changes to the regulations in the Code of Federal Regulations. Table of Contents I. Background A. Legislative History B. Published Changes to the Fee Schedule II. Specific Proposals for Calendar Year 1997 A. Payment Area (Locality) and Corresponding Geographic Practice Cost Index Changes 1. Background 2. Locality Study 3. Nonselected Options 4. Proposal a. Proposed Variant of Option 1 (Option 1i, 5-Percent Threshold) b. Proposed Option 1i, 5-Percent Threshold, with Subcounty Payment Area Restructuring c. Effects of Proposed Option 1i, 5-Percent Threshold, with Subcounty FSA Restructuring B. Special Rules for the Payment of Diagnostic Tests, Including Diagnostic Radiologic Procedures 1. Background 2. Proposal 3. Chiropractor Exception 4. Non-Physician Practitioners C. Transportation in Connection with Furnishing Diagnostic Tests D. Bundled Services 1. Hot or Cold Packs 2. Dermatology Procedures a. Bundling of Repair Codes into Excision Codes b. Skin Lesion Destruction Codes E. Change in Coverage Status for Screening and Obsolete Procedures 1. Vital Capacity Testing 2. Certain Cardiovascular Procedures F. Payments for Supervising Physicians in Teaching Settings 1. Definition of Approved Graduate Medical Education Programs 2. Evaluation and Management Services Furnished in Certain Settings G. Change in Global Periods for Four Percutaneous Biliary Procedures III. Collection of Information Requirements IV. Response to Comments V. Regulatory Impact Analysis A. Regulatory Flexibility Act B. Payment Area (Locality) and Corresponding Geographic Practice Cost Index Changes C. Special Rules for the Payment of Diagnostic Tests, Including Diagnostic Radiologic Procedures D. Transportation in Connection with Furnishing Diagnostic Tests E. Bundled Services 1. Hot or Cold Packs 2. Dermatology Procedures a. Bundling of Repair Codes into Excision Codes b. Skin Lesion Destruction Codes F. Change in Coverage Status for Screening and Obsolete Procedures 1. Vital Capacity Testing 2. Certain Cardiovascular Procedures G. Payments for Supervising Physicians in Teaching Settings H. Change in Global Periods for Four Percutaneous Biliary Procedures I. Rural Hospital Impact Statement Addendum A--1996 Geographic Adjustment Factors (GAFs) by Medicare Payment Locality/Locality Part for January 1, 1996 Localities and Proposed Option, Fee Schedule Areas (FSAs), in Descending Order of Difference Addendum B--Medicare Fee Schedule Areas (Localities) and 1996 Geographic [[Page 34615]] Adjustment Factors (GAFs), Current and Proposed Option by State and County/County Part In addition, because of the many organizations and terms to which we refer by acronym in this final rule, we are listing these acronyms and their corresponding terms in alphabetical order below: AMA American Medical Association CFR Code of Federal Regulations CPT [Physicians'] Current Procedural Terminology [4th Edition, 1996, copyrighted by the American Medical Association] CY Calendar year EKG Electrocardiogram FSA Fee Schedule Area FY Fiscal year GAF Geographic adjustment factor GPCI Geographic practice cost index HCFA Health Care Financing Administration HCPAC Health Care Professional Advisory Council HCPCS HCFA Common Procedure Coding System HHS [Department of] Health and Human Services MEI Medicare Economic Index MSA Metropolitan Statistical Area OBRA Omnibus Budget Reconciliation Act OMB Office of Management and Budget PMSA Primary Metropolitan Statistical Area RVU Relative Value Unit TC Technical Component I. Background A. Legislative History The Medicare program was established in 1965 by the addition of title XVIII to the Social Security Act (the Act). 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 the conversion factors to preserve budget neutrality. B. Published Changes to the 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:November 25, 1992, as a final notice with comment period on new and revised RVUs only (57 FR 55914). December 2, 1993, as a final rule with comment period (58 FR 63626) to revise the refinement process used to establish physician work RVUs and to revise payment policies for specific physician services and supplies. (We solicited comments on new and revised RVUs only.) December 8, 1994, as a final rule with comment period (59 FR 63410) to revise the geographic adjustment factor (GAF) values, fee schedule payment areas, and payment policies for specific physician services. 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. 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 rule would affect the regulations set forth at 42 CFR part 405, which encompasses regulations on Federal health insurance for the aged and disabled; part 410, which consists of regulations on supplementary medical insurance benefits and part 415, which contains regulations on services of physicians in provider settings, supervising physicians in teaching settings, and residents in certain settings. II. Specific Proposals for Calendar Year 1997 A. Payment Area (Locality) and Corresponding Geographic Practice Cost Index Changes 1. Background From the inception of Medicare in 1966 until 1992, Medicare payments for physicians' services were made under the reasonable charge system. Under the reasonable charge system, Medicare payment localities for physicians' services were set by local Medicare carriers based on their knowledge of local physician charging patterns. As such, payment areas have had no consistent geographic basis. In general, localities tended to be geographic or political subdivisions such as States, counties, or cities, or designations such as urban and rural. Most of the localities changed little between 1966 and 1992. There were about 240 localities, including 16 States with statewide localities, under the reasonable charge system. Section 1848 of the Act replaced the reasonable charge system of paying for physician services under section 1842(b) of the Act, with the physician fee schedule effective January 1, 1992. Section 1848(j)(2) of the Act defines a physician fee schedule payment area as the locality existing under section 1842(b) of the Act for purposes of computing payment amounts for physician services. Section 1848 did not, however, delete section 1842 of the Act, which gives the Secretary the authority to set localities. We believe the Congress enacted section 1848(j)(2) to allow us to retain existing localities to facilitate the statutory transition to the physician fee schedule, but not to preclude us from making locality changes if warranted. All locality changes are now made by HCFA through the rulemaking process. Medicare carriers are not allowed to set or revise physician fee schedule payment localities. In the June 5, 1991 proposed rule for the physician fee schedule (56 FR 25832), we acknowledged the lack of consistency among localities and the significant demographic and economic changes that had occurred since localities were originally established. We also stated that we planned no large-scale locality changes until we evaluated the various studies on localities being done within HCFA and by outside groups such as the Physician Payment Review Commission and until after the statutory transition from the reasonable charge system to the fee schedule was completed in 1996. We [[Page 34616]] stated that until we decide on ultimate large-scale changes, the only locality changes we would consider would be requests for converting individual States with multiple localities to a single statewide locality if ``* * * overwhelming support from the physician community for the changes can be demonstrated.'' This position was repeated in the November 1991 final rule on the physician fee schedule (56 FR 59514). This willingness to consider applications from physicians in a State for conversion to a statewide locality, if overwhelming support on the part of winning and losing physicians has been demonstrated, reflects our belief that statewide localities generally are preferable to the present Medicare localities because they simplify program administration and encourage physicians to practice in rural areas by reducing urban/rural payment differentials. We received inquiries from a number of State medical societies concerning conversions to a statewide payment area. Under the law, payments vary among physician fee schedule areas only to the extent that resource costs vary as measured by the Geographic Practice Cost Index (GPCI). The GPCI is an index developed to measure resource cost differences among areas in the three components of the physician fee schedule--physician work, practice expenses, and malpractice expenses. Area geographic adjustment factors (GAFs) are weighted composites of the area GPCIs and are useful in comparing overall resource cost and payment level differences among areas. (A comprehensive explanation of the GPCIs and GAFs can be found in the June 24, 1994 proposed rule (59 FR 32756)). We explained to the States inquiring about conversions to a statewide payment area that these conversions involve taking a weighted average of the existing locality GPCIs to form a new statewide GPCI. This means that there may be ``losing'' (usually urban) areas, as well as ``winning'' (usually rural) areas within a State if a conversion is made. We further informed the States that a simple resolution passed by the State medical society is not sufficient proof of overwhelming support among both rural and urban physicians for the change. To assist States in deciding whether to convert to a statewide payment area, we published an informational list of projected statewide GPCIs in the June 1991 proposed rule (56 FR 25972). A slightly revised list of projected statewide GPCIs was published in the December 1993 final rule (58 FR 63638). The revisions were made to ensure that any change to a statewide payment area would be done on a budget-neutral basis. That is, that the same amount of payments would be made within a State after the conversion to a statewide payment area as would have been made had the conversion not been made. A comprehensive revision of all GPCIs was made in 1995. A list of revised projected statewide GPCIs was published at Addendum E of the June 1994 proposed rule (59 FR 32789). In most cases, States have been unable to generate the support of the losing physicians for the change. However, three States--Minnesota, Nebraska, and Oklahoma--were converted to statewide payment areas in 1992. (These conversions were announced in the November 1991 final rule (56 FR 59514).) Two additional States--North Carolina and Ohio--were converted to statewide payment areas in 1994. (These conversions were announced in the December 1993 final rule (58 FR 63638).) Iowa was converted to a statewide payment area in 1995. (This conversion was announced in the December 1994 final rule (59 FR 63416).) There are currently 210 payment areas under the physician fee schedule: 22 States with single payment areas; the District of Columbia (with surrounding Maryland and Virginia suburbs), Puerto Rico, and the Virgin Islands are 3 more single payment areas; and 28 multiple-locality States containing 185 payment areas. Table 1 summarizes existing physician fee schedule payment areas. Table 1.--1996 Medicare Physician Fee Schedule Payment Localities by State and Other ------------------------------------------------------------------------ State Localities ------------------------------------------------------------------------ Single locality States: Alaska.................................................... 1 Arkansas.................................................. 1 Colorado.................................................. 1 Delaware.................................................. 1 Hawaii/Guam............................................... 1 Iowa...................................................... 1 Minnesota................................................. 1 Montana................................................... 1 Nebraska.................................................. 1 New Hampshire............................................. 1 New Mexico................................................ 1 North Carolina............................................ 1 North Dakota.............................................. 1 Ohio...................................................... 1 Oklahoma.................................................. 1 Rhode Island.............................................. 1 South Carolina............................................ 1 South Dakota.............................................. 1 Tennessee................................................. 1 Utah...................................................... 1 Vermont................................................... 1 Wyoming................................................... 1 ------------------------------------------------------------------------ 22 States............................................... 22 Other: Wash. D.C................................................. 1 Puerto Rico............................................... 1 Virgin Islands............................................ 1 ------------------------------------------------------------------------ 3 Other................................................. 3 Multiple locality States: Alabama..................................................... 6 Arizona..................................................... 6 California.................................................. 28 Connecticut................................................. 4 Florida..................................................... 4 Georgia..................................................... 4 Idaho....................................................... 2 Illinois.................................................... 16 Indiana..................................................... 3 Kansas...................................................... 3 Kentucky.................................................... 3 Louisiana................................................... 8 Maine....................................................... 3 *Maryland................................................... 3 Massachusetts............................................... 2 Michigan.................................................... 2 Mississippi................................................. 2 Missouri.................................................... 7 Nevada...................................................... 4 New Jersey.................................................. 3 New York.................................................... 8 Oregon...................................................... 5 Pennsylvania................................................ 4 Texas....................................................... 32 *Virginia................................................... 4 Washington.................................................. 3 West Virginia............................................... 5 Wisconsin................................................... 11 ------------------------------------------------------------------------ 28 States............................................... 185 ------------------------------------------------------------------------ Total 1996 Physician Fee Schedule Payment Localities=210. *The Maryland and Virginia localities do not include the parts of Maryland (Prince Georges and Montgomery Counties) and Virginia (Fairfax and Arlington Counties and the city of Alexandria) included in the Washington, D.C. locality. 2. Locality Study There are numerous possibilities for realigning payment localities. After considerable internal discussion, we narrowed the possibilities to four general options. A major goal in selecting these options is to continue to reduce the number of areas, leading to greater simplicity, understandability, ease of administration, reduction in urban/rural payment differences, reduction in payment differences among adjacent areas, and stability of payment updates resulting from the periodic GPCI revisions. Larger payment areas would mean larger data samples thereby leading to less volatile changes in the statutory periodic GPCI revisions. We contracted with Health Economics [[Page 34617]] Research, Inc. to conduct an analysis of these options. The four general fee schedule area (FSA) options are briefly summarized as follows: Option 1: Use current localities as building blocks. The 22 States currently with single localities would remain statewide FSAs. Statewide FSAs would be created in the 28 remaining States, except for current localities whose GAF exceeds the State GAF by a specified percentage threshold (for example, 5 percent). Option 2: Use metropolitan areas (Metropolitan Statistical Areas (MSAs), Primary Metropolitan Statistical Areas (PMSAs), and New England County Metropolitan Areas) as building blocks. The 22 States currently with single localities would remain statewide FSAs. Statewide FSAs would be created in the 28 remaining States, except for metropolitan areas whose GAF exceeds the State GAF by a specified percentage threshold. Option 3: Use metropolitan areas as building blocks. The 22 States currently with single localities would remain statewide FSAs. Each of the 28 remaining States would be divided into 2 to 5 FSAs based on metropolitan area population size: greater than 3 million; 1 to 3 million; .25 to 1 million; less than .25 million; nonmetropolitan. Option 4: Use metropolitan areas as building blocks. Designate five nationwide FSAs based on metropolitan area population size: greater than 3 million; 1 to 3 million; .25 to 1 million; less than .25 million; nonmetropolitan. We also asked Health Economics Research, Inc. for any suggestions for variations on these options that might improve them. We specifically requested that it recommend restructuring FSAs in the 11 States that have subcounty localities. These subcounty configurations, usually cities or zip codes, create unnecessary complexity and administrative burden. Health Economics Research, Inc. issued its final report to us on November 1, 1995. The report consists of three volumes and can be obtained by requesting the following titles from the National Technical Information Service by calling 1-800-553-NTIS, or (703) 487-4650 in Springfield, Virginia: ``Assessment and Redesign of Medicare Fee Schedule Areas (Localities),'' Volume I: Text, NTIS PB96-118815. ``Assessment and Redesign of Medicare Fee Schedule Areas (Localities),'' Volume II: Appendix Tables, NTIS PB96-118823. ``Assessment and Redesign of Medicare Fee Schedule Areas (Localities),'' Volume III: Maps. NTIS PB96-118187. 3. Nonselected Options While we began with four basic options, numerous variations are possible merely depending on which threshold GAF difference is selected. For example, Option 1 is based on the difference between the existing FSA GAF and the State GAF. Many variants on this option are available merely depending upon what threshold GAF difference between the FSAs and the State is selected, for example, 1 percent, 3 percent, 5 percent, 10 percent. Likewise, Option 2 produces many variations depending on the selected threshold GAF difference between the metropolitan area GAF and the State GAF. The major goal of revising FSAs is to simplify the payment areas and reduce payment differences among geographic areas while maintaining accuracy in tracking input price differences among areas. All options involve a certain trade-off between simplicity and understandability and accuracy of tracking of input prices. Many of the variations will produce a similar number of FSAs, but some do so at the expense of producing undesirable payment differences at boundaries or inaccuracies in tracking input prices. After careful examination of all options and their variants, we believe that a variant of Option 1 is clearly the best choice. Before discussing, in depth, our reasons for selecting this option, the following is a brief discussion of why we eliminated Options 2, 3, and 4, in order of the least promising option. A more detailed discussion of these options with tables and maps can be found in the Health Economics Research, Inc. report. Option 4 is the least promising approach to constructing FSAs. While it has the smallest number of FSAs, five nationwide, it is unacceptably inaccurate in tracking input price differences and creates too many large and inappropriate GAF differences across FSA boundaries. Grouping all metropolitan areas of the same size into a single category, regardless of geographic location, would substantially underpay some areas while overpaying others. For example, the following large metropolitan areas would be substantially underpaid under Option 4 (Option 4 GAF/actual GAF is indicated in parenthesis): San Francisco (1.024/1.141); New York City (1.102/1.176); Nassau-Suffolk, New York (1.024/1.199); and Miami (1.024/1.116). Conversely, the following large cites would be overpaid under Option 4: Houston (1.102/1.030); Chicago (1.102/1.061); and Philadelphia (1.102/1.066). In addition to these inaccuracies, Option 4 creates some severe boundary problems. For example, the Houston- Galveston, Texas difference under Option 4 is 1.102 versus 0.937, a nearly 20 percentage point difference, versus an actual area GAF cost difference of 1.030 versus 1.001. Other examples may be found in the tables and maps in the Health Economics Research, Inc. report. In short, State-specific and metropolitan-area-specific factors, which Option 4 ignores, appear to be important influences on input prices. These factors are not captured by nationwide average inputs based on population size. While New York and Houston are in the same metropolitan area size classification of greater than 3 million, they have less in common with each other in terms of practice costs than they do with neighboring metropolitan areas of smaller size. Option 3, we believe, is also unpromising. It creates the largest number of FSAs of any option and is geographically more complex than either Option 1 or Option 2. This option suffers from inadequate tracking of input price variations and inappropriate differences across boundaries, which are caused, as in Option 4, by grouping metropolitan areas by population class. Under this option, within a State, a metropolitan area's costliness is assumed to be dependent only on its population. This is not always an accurate assumption. A small metropolitan area that is a component of a major metropolitan region (for example, a PMSA) may have much higher input prices than a small freestanding metropolitan area surrounded by nonmetropolitan counties. Grouping these types of metropolitan areas together can lead to inaccurate GAFs and inappropriate differences at FSA boundaries. For example, Houston is the only Texas metropolitan area in the highest population category of 3 million or more, and has a GAF under Option 3 of 1.030. The contiguous Galveston PMSA is in the smallest population class of under 250,000. Its actual GAF is 1.001, but under Option 3 it is averaged with other small Texas metropolitan areas and is assigned a GAF of 0.926. Option 3, thus, underpays Galveston and creates a much larger GAF difference at the Houston-Galveston boundary than is warranted by the actual difference in input prices. Expensive Miami and Fort Lauderdale (with GAFs of 1.116 and 1.100) are grouped with lower- price Orlando and Tampa-St. Petersburg (with [[Page 34618]] GAFs of 1.008 and 0.992) under this option. Option 2 is more promising than Options 3 and 4, but less promising than Option 1. While producing similar types and numbers of FSAs in some instances, depending on the threshold used, Option 1 has some advantages over Option 2. First, Option 1 is less disruptive because it uses existing localities as building blocks. Second, the urban payment localities in Option 1 tend to be smaller and more focused on high-cost urban counties and track input price variations better than the larger metropolitan area definitions used in Option 2. The metropolitan areas (MSAs, PMSAs, and New England County Metropolitan Statistical Areas) used as building blocks in this option are based on commuting patterns and are generally much larger than the current urban localities used in Option 1. Examples are the Washington, D.C. locality versus the Washington, D.C. PMSA; the Dallas locality versus the Dallas PMSA; the Chicago locality versus the Chicago PMSA; and the Houston locality versus the Houston PMSA. Input prices in the suburban counties in these PMSAs may be significantly lower than in the urban core and more similar to prices in other parts of the State. This may be especially true of some rural counties on the fringes of metropolitan areas that are categorized as part of the metropolitan area based on commuting patterns. For example, the Washington, D.C. PMSA includes portions of rural West Virginia. Under Option 2, this FSA would have a GAF of 1.090, compared to the actual GAF of Washington, D.C. of 1.122, and the actual GAF of the West Virginia counties included in the Washington, D.C. PMSA of 0.950. Input prices in the parts of rural West Virginia included in the Washington, D.C. PMSA have little in common with input prices in the Washington, D.C. urban core. Also, Option 2 presents significant problems in handling metropolitan areas that cross State boundaries. 4. Proposal a. Proposed Variant of Option 1 (Option 1i, 5-Percent Threshold) Under standard Option 1, the 22 States with a single FSA would remain statewide FSAs. Option 1 then presumes for the remaining 28 States that FSAs should be statewide for each State unless a sub-State payment locality has sufficiently higher input prices (as measured by its GAF) than the average input prices of its State (as measured by the State GAF) to meet a threshold difference. If the percentage difference between the locality's GAF and the State GAF exceeds a specified threshold, that locality would remain a distinct FSA. Otherwise, the locality would be merged into a residual FSA for that State. If no sub- State locality had sufficiently higher prices than the State average to meet the threshold difference, the State would become a single statewide locality. For example, Alabama currently has six localities. The GAFs range from a high of 0.957 for Locality 05, Birmingham, to a low of 0.902 for Locality 06, rest of Alabama. The State GAF is 0.932. Using a threshold of 5 percent, Alabama becomes a statewide locality as the Birmingham GAF exceeds the State GAF by only 2.68 percent. Using a threshold of 2.5 percent, Birmingham would remain a distinct FSA, while the other five localities would become one residual FSA as none of the other current localities exceed the State GAF by 2.5 percent. Option 1 has several advantages over Options 2, 3, and 4. By using the current localities as building blocks, it is the most conservative of the options, is likely to be the least disruptive to physicians, and imposes the least administrative burden on HCFA and the Medicare carriers. GAFs for the largest, highest priced cities and metropolitan areas will not change under this option. Neither will the GAFs of current single locality States change. Many smaller cities and rural areas are combined into residual State areas, eliminating GAF differences among these areas and, thereby, increasing payments in rural areas and substantially reducing the number of localities. Since these areas usually have the smallest price input differences, combining them reduces the number of FSAs at the smallest loss in accuracy of input price tracking. In summation, Option 1 tends to divide States with large variation in input prices among localities into multiple FSAs, albeit significantly fewer than now exist in these States, while combining localities in States with little price variation into a single statewide locality. However, the standard version of Option 1 has two shortcomings. First, some mid-sized metropolitan areas in large States such as California and Texas do not remain distinct FSAs despite their considerably higher input prices than in the rural and small city areas of their States with which they would be combined into a single residual area. Second, some large metropolitan areas in small States, such as Baltimore, Maryland, do not remain distinct FSAs. This is because the State GAF to which all locality GAFs are compared contains the high cost area GAFs. This makes it difficult for the mid-sized areas in large States to exceed the State GAF, even though their own GAFs may substantially exceed the GAF of all other localities in the residual area to which they would be assigned under Option 1. In large States with a wide range of GAFs, the mid-sized cities and metropolitan areas tend to be combined with the residual rest-of-State area. Their GAFs are sharply reduced, lessening the accuracy of input price tracking and creating large boundary differences in GAFs between large and mid-sized cities and at rural State boundaries that are not reflective of true input price differences. For example, with the current payment localities, the contiguous California counties of Los Angeles and Ventura have 1996 GAFs of 1.103 and 1.079, respectively, a 2.4 percentage point difference. Under Option 1, with a 2.5-percent threshold, Ventura becomes part of the residual State area. Its GAF is reduced to 1.012, while Los Angeles's GAF remains at 1.103, a difference of 9.1 percentage points. Other examples of this large boundary effect, all assuming a 2.5-percent threshold, are: San Francisco versus Marin, California (1.153/1.063 currently versus 1.153/1.012 under Option 1); Dallas versus Fort Worth, Texas (1.006/0.977 currently versus 1.006/0.934 under Option 1). In the case of Baltimore, its GAF of 1.032 is primarily responsible for bringing the State GAF up to 1.016. Under Option 1, with a 2.5-percent threshold, it becomes part of a single statewide locality (excluding Maryland counties in the Washington, D.C. locality) with a GAF of 1.016, when in reality it is much more expensive than the rest of the State, which has a combined GAF excluding Baltimore of 0.964. These problems are addressed in our proposed option, Option 1i, 5- percent threshold, a variant of Option 1. In this variant, the GAF of a locality is compared to the average GAF of lower-price localities in the State, rather than to the statewide average. (Like standard Option 1, the 22 States currently having single statewide localities remain statewide localities.) If this difference exceeds a percentage threshold, 5 percent in our proposal, the locality remains a distinct FSA. Otherwise, it becomes part of a statewide or rest-of-State residual FSA. Specifically, a State's localities are ranked from the highest to the lowest GAF. The GAF of the highest-price locality is compared to the weighted average GAF of all lower-price localities. If the percentage difference exceeds a specified threshold, [[Page 34619]] the highest-price locality remains a distinct FSA. If not, the State becomes a single statewide locality. If the highest-price locality remains a distinct FSA, the process is repeated (iterated, hence the designation Option 1i) for the second-highest-price locality. Its GAF is compared to the statewide average GAF excluding the two highest- price localities. If this difference exceeds the threshold, the second- highest-price locality remains a distinct FSA. The logic is repeated (iterated), moving down the ranking of localities by costliness, until the highest-price locality does not exceed the threshold and does not remain a distinct FSA. No further comparisons are made, and the remaining localities become a residual rest-of-State FSA. The GAF of a locality always is compared only to the average GAF of all lower-price localities. This ensures that the statewide or residual State FSA has relatively homogeneous input prices. Option 1i, thus, has all of the advantages of Option 1, while addressing the problems inherent in Option 1: unwarranted boundary differences and large higher-price areas not being separate FSAs in small States. In comparison to Option 1, Option 1i breaks out more payment areas in large States containing a wide range of GAFs by defining more mid-sized cities/areas as distinct FSAs; it more consistently defines homogeneous residual State FSAs; and reduces unwarranted boundary differences. As with Option 1 and Option 2, numerous variants of Option 1i are possible depending on the GAF threshold difference selected. We are proposing Option 1i with a 5-percent threshold. We believe that this option would attain the goal of simplifying the payment areas and reducing payment differences among areas while maintaining accuracy in tracking input prices. A summary measure of an FSA option's accuracy in tracking input prices is the average percentage difference between the county GAF and the GAF of the payment locality to which that county is assigned. These differences are weighted by total physician services RVUs in each county so that inaccuracies in areas where more services are provided are emphasized. A summary measure of payment differences among adjacent geographic areas in an FSA option is the average difference of the GAFs between unique pairs of contiguous counties, weighted by the sum of the RVUs of the two counties. Table 2 shows these summary measures of input price accuracy and small area payment differences for proposed Option 1i, 5-percent threshold, compared to the current localities, statewide localities, and the extremes of a national fee schedule (the same payment everywhere for a specific service) and separate FSAs for all 3,223 counties. Table 2.--Payment Accuracy and Small Area Payment Difference ---------------------------------------------------------------------------------------------------------------- Average Average county/FSA county Fee schedule area Number of input price boundary FSAs difference* difference* (percent) (percent) ---------------------------------------------------------------------------------------------------------------- National................................................................. 1 6.86 0.00 States................................................................... **53 4.06 0.73 Option 1i, 5% Threshold.................................................. 87 2.09 1.78 1996 Localities.......................................................... 210 1.67 2.30 Counties................................................................. 3223 0.00 3.18 ---------------------------------------------------------------------------------------------------------------- * Weighted by total physician services RVUs. ** Includes Washington D.C., Puerto Rico, and the Virgin Islands. Note: Input price accuracy is measured by the average absolute difference (weighted by total county RVUs) between the county GAF and the FSA GAF. Boundary differences are measured by the average absolute difference in county GAFs between all unique, contiguous county pairs, weighted by the sum of total RVUs of the contiguous counties. At one extreme is a single national FSA with no geographic adjustments. Lack of a GAF obviously does not track input prices at all, resulting in an average payment error of 6.86 percent, but also avoids any payment boundary differences. At the other extreme is an FSA for each of the 3,223 counties, which perfectly tracks county input prices, but has the largest number of, and largest average difference across, payment boundaries. These two extremes highlight the tradeoff between tracking input price variations and avoiding differences among nearby areas. The current payment localities result in an average payment error of 1.67 percent, with an average difference across boundaries of 2.30 percent. Our proposed Option 1i, 5-percent threshold, by itself, without the subcounty payment restructuring discussed below, would significantly reduce the number of payment areas from 210 to 87. It would reduce the average county boundary difference from 2.30 percent to 1.78 percent while increasing the average county input price error by only 0.42 percentage points from 1.67 percent to 2.09 percent. b. Proposed Option 1i, 5-Percent Threshold, with Subcounty Payment Area Restructuring We further propose to refine payment areas by combining with proposed Option 1i, 5-percent threshold, an additional restructuring of localities in the 11 States that currently have subcounty localities. Three of these States--California, Mississippi, and Pennsylvania-- define subcounty localities by zip code. Eight States--Arizona, Connecticut, Kentucky, Massachusetts, Missouri, Nevada, New York, and Oregon employ city/town limits to define localities. The use of subcounty localities creates unnecessary complexity and administrative burden. One of the most compelling reasons to eliminate subcounty payment areas from payment localities is to reduce the administrative work required to maintain zip-code-to-locality crosswalks. Many States employ a zip-code-to-locality crosswalk when processing claims, but the continuous creation, deactivation, and redefinition of U.S. Postal Codes poses a significant obstacle in the maintenance of accurate locality definitions. Town boundaries can also be ambiguous. Since county boundaries are unambiguous and rarely change, aggregating subcounty parts to the county level would minimize the administrative burden of maintaining crosswalks. [[Page 34620]] Another reason to eliminate subcounty localities is simplicity. By aggregating subcounty areas to the county level, a uniform fee schedule system with no area smaller than a county can be introduced nationwide. Furthermore, since the input price data for GPCIs, and ultimately GAF values, are not available at a subcounty level, the subcounty areas provide no additional accuracy in measuring practice input price variations. More often, subcounty localities unnecessarily complicate the calculation of GAF values by requiring laborious tracking by zip code of the subcounty parts. The obvious method for eliminating subcounty localities is to expand a current locality's city/town or zip code boundaries to the surrounding county borders. In exploring this option, we defined ``County Equivalent Localities'' based on the following criteria: For a current locality that includes multiple cities/towns in noncontiguous counties, all counties with any areas in the current locality are incorporated into the new County Equivalent Locality definition. Counties currently divided between two localities are assigned to the locality where the largest portion of physician fee schedule services (RVUs) are provided. The County Equivalent Option may be applied to the 11 subcounty locality States independent of our proposed basic Option 1i, indeed independent of any other changes in payment localities. When adopted with our basic Option 1i, 5-percent threshold, changes are made automatically or easily in 8 of the 11 States: Five States--Arizona, Connecticut, Kentucky, Mississippi, and Nevada become statewide payment areas. California currently has eight subcounty areas, all of which are in Los Angeles County. These areas have the same GAF and payment level and can be aggregated into a single FSA. (These eight localities were kept separate from 1992 to 1995 to facilitate the statutory fee schedule transition period.) In New York, existing subcounty areas are included in the residual rest-of-State area. In Oregon, the current town-based ``Portland'' locality, which includes parts of Clackamas, Multnomah, and Washington counties, can be redefined to encompass the boundaries of these three counties. Because of their unique circumstances, we believe the remaining three subcounty FSA States of Massachusetts, Missouri, and Pennsylvania require simple fundamental payment area reconfigurations. Massachusetts--Massachusetts currently has two noncontiguous payment areas: ``Urban'' and ``Suburban.'' Under Option 1i, 5-Percent Threshold, Massachusetts would become a single statewide locality. The shortcoming of both the current localities and Option 1i, 5-Percent Threshold, is that the high cost Boston area, comprised of parts of Suffolk, Norfolk, and Middlesex counties, is not separated from lower- cost central and western Massachusetts. The problem is caused by the composition of the current ``Urban Massachusetts'' locality, which groups the Worcester, Springfield, and Pittsfield areas with the substantially higher-cost Boston area. We, therefore, propose to change Massachusetts to two new localities: 01--Boston Metropolitan Area (comprised of Suffolk, Norfolk, and Middlesex counties) and 02--rest of Massachusetts. Missouri--Missouri currently has seven noncontiguous payment areas: Northern Kansas City; Kansas City; St. Louis/large East Cities; St Joseph; Rural Northwest counties; small East Cities; and rest of Missouri. Under our proposed Option 1i, 5-Percent Threshold, Missouri would become a statewide payment area. This result would fail to recognize the significant price differences between the Kansas City and St. Louis metropolitan areas and the rest of the State and would result in significant payment area input price difference tracking inaccuracies. To correct this problem, we propose to change Missouri to three payment areas: 01--Kansas City Metropolitan Area (Platte, Clay, and Jackson counties); 02--St Louis Metropolitan Area (St Louis City, St. Louis, Jefferson, and St Charles counties); and 03--rest of Missouri (all other counties). Pennsylvania--Pennsylvania currently has four noncontiguous payment localities: 01--Philadelphia/Pittsburgh medical schools; 02--large Pennsylvania Cities; 03--smaller Pennsylvania Cities; and 04--rest of Pennsylvania. Under proposed Option 1i, 5-Percent Threshold, areas 03 and 04 are combined into a residual rest-of-State area. The problem is that the high cost Philadelphia area is split into two areas, parts of 01 and 02, and is not clearly distinguished from the lower-cost Pittsburgh area and the rest of area 02. The five counties comprising the Philadelphia MSA are the most costly in Pennsylvania and clearly belong together in a ``Philadelphia Metropolitan Area'' locality. Allegheny County, which contains Pittsburgh and, therefore, part of which is grouped with part of Philadelphia in locality 01, is much less expensive than the Philadelphia area and does not belong in the same locality, either cost-wise or geographically. Thus, we propose that Pennsylvania be divided into two localities: 01--Philadelphia Metropolitan Area (Montgomery, Philadelphia, Delaware, Bucks, and Chester counties); and 02--rest of Pennsylvania (all other counties). c. Effects of Proposed Option 1i, 5-Percent Threshold, with Subcounty FSA Restructuring We believe that our proposed restructuring of Medicare payment areas meets the major goal of simplifying payment areas and reducing payment differences among adjacent geographic areas while maintaining accuracy in tracking input prices among areas. It significantly reduces the number of FSAs from 210 to 89, and increases the number of statewide payment areas from 22 to 34, thereby simplifying program administration. It also provides a more rational and understandable basis for localities, reduces urban/rural payment differences, and maintains separate payment areas for relatively high-priced large and mid-sized cities in large States. It decreases the number of payment areas by almost 60 percent, while at the same time reducing average county boundary payment differences, yet reduces average county input price accuracy by only 0.42 percent. The GPCIs, and, therefore, the GAFs, for the proposed new payment areas would be budget neutral within each State. That is, an adjustment would be made to them later in the year (to incorporate the most recent data into the adjustments) to yield the same total physician fee schedule payments within that State that would have been made had the payment areas not been changed. We are anticipating the adjustments to be minor. While some current individual payment areas will experience slight increases in payments and some areas will experience slight decreases in payments under our proposed FSA changes, the effects on the overwhelming majority of areas will be minimal. Of the total current areas in the 28 States currently having multiple FSAs, 82 percent change less than 3 percent, 93 percent change less than 4 percent, and 96 percent change less than 5 percent. Forty-three percent of the areas will experience increases in payments, 33 percent will experience decreases, and 24 percent will experience no change. Addendum A, ``1996 Geographic Adjustment Factors (GAFs) by Medicare Payment Locality/ [[Page 34621]] Locality Part for January 1, 1996 Localities and Proposed Option, Fee Schedule Areas (FSAs) in Descending Order of Difference'' shows the effects for each of the current localities in multiple FSA States (as previously mentioned, the 22 States currently having a single statewide locality remain statewide localities) of our proposed locality reconfiguration by comparing existing GAFs to the GAFs for the new localities. Because our proposal eliminates subcounty areas, we are also publishing Addendum B, ``Medicare Fee Schedule Areas (Localities) and 1996 Geographic Adjustment Factors (GAFs), Current and Proposed Option by State and County/County Part'' that shows, alphabetically by State and county, the current locality and GAF and the proposed locality and GAF for each county. As can be seen from Addendum A, only four areas will lose more than 4 percent under our proposal: Pennsylvania area 01, Philadelphia/ Pittsburgh Medical Schools; Pennsylvania area 02, large Pennsylvania Cities; Missouri area 01, St. Louis/large Eastern Cities; and Massachusetts area 01, Urban Massachusetts. These are unique situations and require explanation. As the asterisks on these areas indicate, these losing areas are only part of an existing locality and are in States in which we are recommending fundamental restructuring of FSAs because of existing subcounty FSAs and the current combining of areas with widely different input prices into a single area. In actuality, only part of the existing area will lose. As Addendum A shows, the remaining part of the area will win under our proposal. For example, the largest projected loser, Pennsylvania area 01, is in reality only the part of Pittsburgh that is currently included in area 01. The Philadelphia portion of Pennsylvania area 01 is a projected winner under our proposal. As mentioned earlier, while Pittsburgh is in Allegheny County, which has considerably lower input prices than the Philadelphia area, part of Pittsburgh is included with part of Philadelphia in area 01. This has the effect of overpaying the Pittsburgh part of area 01 and underpaying the Philadelphia part of area 01. Our proposal remedies this situation by grouping Philadelphia with similar priced counties in the Philadelphia MSA, while grouping Pittsburgh with similar priced areas in the rest of Pennsylvania. This also explains why Pennsylvania area 02 shows up as both one of the four largest losers and as the largest winner. Under our proposal, the part of area 02 comprised of larger cities outside of the Philadelphia MSA is no longer included with the higher priced counties in the Philadelphia MSA, but is included in the residual Pennsylvania FSA. This lowers their GAFs, while increasing the GAFs of the higher priced counties in the Philadelphia MSA that now become part of the Philadelphia FSA. The same logic holds true for Massachusetts and Missouri. The losing parts of current Massachusetts locality 01 are the Worcester, Springfield, and Pittsfield areas which, while having substantially lower costs than Boston, are currently included in the same locality. The winning part of Massachusetts locality 01 is the higher-cost Boston metropolitan area. In Missouri, the losing parts of locality 01, St. Louis/large East Cities, are the lower-cost Columbia, Springfield, and Jefferson City areas that are currently included with higher-cost St. Louis. The winning part of this locality is the St. Louis metropolitan area. These four largest losing areas then result from our correcting the current anomalous situation created by including low-cost and high- cost areas in a single locality by reconfiguring the localities to more accurately reflect input price variations. We welcome comments on our proposed payment area changes. Our proposal is based on the application of statistical criteria to aggregate localities within a State that are not significantly different as indicated by current GAFs. We would welcome alternative rationale and criteria for exceptions to this statistically based methodology. While we are open to considering exceptions to this statistically based realignment, commenters suggesting variations on our proposal should submit an analysis of why their variation is preferable. For example, commenters suggesting that their particular area, which would become part of a residual rest-of-state area under our proposal, should be retained as a separate payment area should submit data to show that their area costs exceed the costs of the other areas in the residual payment area by the 5-percent threshold. As mentioned earlier, the great majority of existing FSAs would experience only very minor changes in payment levels under the proposed new payment area configuration. We are concerned, however, about the few areas estimated to experience the largest reductions in payments. To lessen the impact on these areas, we propose phasing in the effect of the proposed new payment areas over a 2-year period in States containing a locality that is estimated to experience a decrease in payments that exceeds a certain threshold. We selected a 2-year period because when we implement the GPCI revisions required by law every 3 years, the law provides for a 2-year transition period. Revising localities requires calculating GPCIs to correspond to the revised localities. A transition period, however, adds another element to the changes to the physician fee schedule. For example, the law requires that the conversion factor be updated each year. In addition, we annually add new RVUs for new and revised services. In 1997, we will implement the comprehensive changes in work RVUs required by law. In 1998, the law requires us to implement new resource-based practice expense RVUs. In 1998 and 1999, we will implement new GPCIs as required by law. A transition period for our locality changes would add one more payment change to these other changes. Since most payment areas would experience very minor changes, we believe that transitioning these areas would unnecessarily add another change. Since the purpose of the proposed phase-in is to limit the effect on the areas estimated to experience the largest decrease in payments because of our proposed payment area revisions, we propose that no area be allowed to lose more than 4 percent in the first year. We selected the 4-percent threshold because that is about one-half of the largest estimated area payment decrease. The proposed payment area changes would be fully effective in 1997 in all States not containing an area whose payments are estimated to decrease by more than 4 percent under our proposal. Under this phase-in, only two States, Pennsylvania and Missouri, would be transitioned as they are the only States with areas that would experience a decrease of more than 4 percent. In these States, areas estimated to lose more than 4 percent would be assigned 1997 GPCIs whose values would limit the loss to 4 percent. Since the proposed new payment area changes would be budget-neutral within a State, all areas within a State would be subject to the 2-year phase-in if the State contained an area whose payment level is estimated to decrease by more than 4 percent. This means that areas estimated to receive increases in payments in these States would receive only part of the increase in 1997 as transitional 1997 GPCIs would be calculated to maintain budget neutrality within the State. In 1998, all areas in these transitioned States would be totally incorporated into their new localities and be assigned the fully implemented new locality GPCIs. We have designed this transition approach [[Page 34622]] to cushion the effect of the change for the localities that would be experiencing the greatest losses. We invite comments on this transition proposal and are open to suggestions about alternative transition approaches. Our proposal would leave 16 States with multiple payment areas. We believe our proposal justifies multiple areas in these States because of input price differences within these States. However, as stated earlier in the background discussion on this issue, we are generally in favor of statewide payment areas as they simplify program administration and encourage physicians to practice in rural areas by eliminating urban/rural payment differentials within the State. Therefore, to continue to be responsive to the physician community, even if our proposed payment area reconfiguration is adopted, we will continue to consider converting any of the remaining multiple payment area States into a single statewide payment area if overwhelming support among physicians in both winning and losing areas can be demonstrated. This proposed policy change does not require a change to the regulations set forth in Sec. 414.4 (``Fee schedule areas''). B. Special Rules for the Payment of Diagnostic Tests, Including Diagnostic Radiologic Procedures 1. Background The payment for diagnostic procedures, including diagnostic radiologic procedures, under the Medicare program is made under two statutory benefits. Section 1861(s)(1) of the Act describes physician services as part of the medical and other health services benefit. This paragraph describes the professional component of a diagnostic test, which is the interpretation of the test. Under the physician fee schedule and the Medicare carrier payment systems, these services are coded with the CPT modifier ``26.'' Payment for taking a test is made under section 1861(s)(3) of the Act. We have termed the taking of a test the technical component of the test, and it is indicated under the physician fee schedule with the ``TC'' modifier. Section 2070.1 of the Medicare Carriers Manual provides that for a diagnostic test to be covered, the service must be related to a patient's illness or injury (or symptom or complaint) and ordered by a physician. This instruction was intended to relate a diagnostic test to a patient's illness or injury, symptom, or complaint. The results of the test were to be used to treat the patient or refer him or her for treatment. It has come to our attention from various sources, including carrier medical directors, that, in some cases, the intent of this instruction has been frustrated. We have heard of instances in which a physician is employed for the sole purpose of ordering tests. This physician has no relationship to the beneficiary, and it is highly likely that tests by this physician would not be medically necessary. We believe this practice generates unnecessary diagnostic tests and places Medicare beneficiaries at needless risk both medically and financially. We propose to further clarify this long-standing manual instruction requirement that tests be ordered by a physician by specifying that the physician ordering the test must be the physician treating the patient. This proposed policy would link the ordering of the diagnostic test to the physician who will use the test results to treat the patient. 2. Proposal We propose that for diagnostic tests, including diagnostic radiologic procedures, to be covered, they must be ordered by the physician who treats the beneficiary. The physician who treats the beneficiary is the physician responsible for the treatment of the patient and who orders the test or radiologic procedure to use the results in the management of the beneficiary's specific medical problem(s). (Physicians can order tests while they are consulting for another physician.) We believe this requirement is fundamental for coverage and payment of diagnostic tests and, therefore, are including it in the regulations at Sec. 410.32 (``Diagnostic X-ray tests, diagnostic laboratory tests, and other diagnostic tests: Conditions''). 3. Chiropractor Exception A physician who orders the x-ray that is used by a chiropractor to demonstrate the subluxation of the spine in a beneficiary who is receiving manual manipulation treatments would be exempted from this rule. Because no payment can be made for a diagnostic test ordered by a chiropractor under Sec. 410.22(b)(2), we propose to allow payment for the x-ray when ordered by a physician who will not be treating the patient for subluxation of the spine. Otherwise, beneficiaries would always have to pay out-of-pocket for these x-rays, which would frustrate their use of the chiropractic benefit. 4. Non-Physician Practitioners Certain non-physician practitioners who provide services that would be physician services if furnished by a physician under a specific enumerated benefit in the statute would be considered as the physician treating the beneficiary for the purpose of this section. Non-physician practitioners who meet this definition are physician assistants (section 1861(s)(2)(K)(i) of the Act); and nurse practitioners and clinical nurse specialists (sections 1861(s)(2)(K)(ii) and 1861(s)(2)(K)(iii) of the Act), operating within the scope of their State licenses. C. Transportation in Connection with Furnishing Diagnostic Tests Section 1861(s)(3) of the Act establishes coverage for diagnostic x-rays furnished in a place of residence used as the patient's home if the performance of the tests meets health and safety conditions established by the Secretary. This provision is the basis for payment of x-ray services furnished by approved portable suppliers to beneficiaries in their homes and in nursing facilities. Although the Congress did not explicitly so state, we determined that, because of the increased costs in transporting the x-ray equipment to the beneficiary, the Congress intended that we pay an additional amount for transportation expenses. Therefore, we established HCFA Common Procedure Coding System (HCPCS) codes R0070 and R0075 (for single-patient and multiple-patient trips, respectively) to pay approved portable x-ray suppliers a transportation ``component'' when they furnish the services listed in section 2070.4.C of the Medicare Carriers Manual. We later added the taking of an electrocardiogram (EKG) tracing to the list of services approved suppliers of portable x-ray services may furnish (section 2070.4.F of the Medicare Carriers Manual) and established HCPCS code R0076 to pay for the transportation of EKG equipment. In the December 1995 final rule (60 FR 63149), we published our revised policy of precluding separate payment for the transportation of diagnostic equipment except under certain circumstances. These circumstances include standard EKG procedures furnished by an approved supplier of portable x-ray services or by an independent physiological laboratory (section 2070.1.G of the Medicare Carriers Manual) under HCPCS code R0076 in connection with the provision of CPT codes 93000 (Electrocardiogram, complete) or 93005 (Electrocardiogram, tracing). After further review of this policy, we have decided that the exceptions are inconsistent with the law and legislative [[Page 34623]] history regarding the payment for transportation of EKG equipment. Section 1861(s)(3) discusses only the coverage of x-rays furnished in a beneficiary's place of residence. Because there is no mention in the statute about the coverage of EKGs furnished in a beneficiary's place of residence, we are returning to our original interpretation of the law. We propose allowing separate payment only for the transportation of x-ray equipment furnished by approved suppliers of portable x-ray services. As a result, we would not allow separate payment for the transportation of EKG equipment furnished by any supplier. Therefore, we propose to eliminate HCPCS code R0076. Payment for CPT codes 93000 and 93005 will not change, nor will the coverage of these services change. This proposed policy change is not explicitly addressed in our regulations. D. Bundled Services 1. Hot or Cold Packs The application of hot or cold packs to one or more areas is billed using CPT code 97010. These modalities (that is, physical agents applied to produce therapeutic change to biologic tissue) are primarily used in conjunction with therapeutic procedures to provide analgesia, relieve muscle spasm, or reduce inflammation and edema. Generally, hot packs are used for subacute or chronic conditions, while cold packs are used for acute and chronic conditions. The results of a comprehensive analysis of Medicare claims data indicate that CPT code 97010 is being used extensively with a wide variety of services such as office visits and physical medicine and rehabilitative services. Therefore, we are proposing to bundle payment for CPT code 97010 into the payment for all other services including, but not limited to, those with which it historically has been billed with the greatest frequency (such as office visits and physical therapy). We believe that our proposal to bundle payment and, thus, to preclude separate payment for the application of hot and cold packs is justified for three reasons: As a therapy, hot and cold packs are easily self- administered. Generally, we do not cover procedures that are basically self-administered; hot and cold packs, by their nature, do not require the level of professional involvement as do the other physical medicine and rehabilitation modalities. Although we acknowledge that professional judgment is involved in the use of hot and cold packs, much less judgment is demanded for them than for other modalities. These packs are commonly used in the home, and, thus, require a minimal level of professional attention. The application of hot and cold packs is usually a precursor to other interventions and, as such, is appropriately used in combination with other procedures. Our data analysis supports this conclusion because the majority of claims for CPT code 97010 occurred in conjunction with claims for other services performed on the same day. We propose to change the status indicator for CPT code 97010 to ``B'' to indicate that the service is covered under Medicare but payment for it is bundled into the payment for other services. Separate payment for CPT code 97010 would not be permitted under this proposed change. This change would be implemented in a budget neutral manner across all other procedures. Because the RVUs for this procedure would be redistributed across all physician fee schedule services, there would be no measurable impact. This proposed policy change is not explicitly addressed in our regulations. 2. Dermatology Procedures a. Bundling of Repair Codes into Excision Codes Currently, the RVUs for the dermatology excision codes (CPT codes 11400 through 11446 and 11600 through 11646) include services described by the simple repair codes (CPT codes 12001 through 12018). The dermatologist can bill separately for the intermediate or complex repair (closure) codes (CPT codes 12031 through 12057 and 13100 through 13152, respectively) in addition to the excision codes. We do not allow separate billing for closure for any other surgical procedure. The closure is included in the comprehensive procedure. We believe that applying the same standard to dermatologists is appropriate. Therefore, we propose to cease paying separately for the repair codes when billed in conjunction with the excision codes. We are proposing to bundle the RVUs for the intermediate and complex repair codes (CPT codes 12031 through 12057 and CPT codes 13100 through 13152, respectively) into both the benign and malignant skin lesion excision codes (CPT codes 11400 through 11446 and 11600 through 11646, respectively). Under our proposal, we would redistribute the RVUs for the repair codes across CPT codes 11400 through 11446 and 11600 through 11646. We would base the number of RVUs for redistribution on the frequency with which the repair codes are billed with the excision codes. We are not proposing to assign these repair codes a ``B'' status indicator because we acknowledge that these codes are not used exclusively with excision services. Instead, we would implement this proposed policy change through our correct coding initiative. This proposed change would standardize our policy for payment for wound closure. This proposed policy change is not explicitly addressed in our regulations. b. Skin Lesion Destruction Codes There are several CPT codes that describe the destruction of various benign or premalignant lesions. Within this group of codes, the reporting methods vary. Sometimes the code describes the destruction of a single lesion but requires reporting multiple codes for the destruction of several lesions; other times it describes destruction of as many as 15 lesions. Thus, it is sometimes not clear how many codes to report. The codes are specific to particular areas of the body or particular types of lesions. Because these categories are not mutually exclusive, the coding system provides the opportunity to report the destruction of a given lesion in more than one way. Finally, this complicated coding structure has produced anomalies in work relative values. We propose to simplify the reporting of and payment for the destruction of benign or premalignant skin lesions. We propose to assign a ``G'' status indicator to CPT codes 11050 through 11052, 11200 and 11201, 17000 through 17105, 17110, and 17200 and 17201 to indicate that these CPT codes are not valid for Medicare purposes and that there is another code to use for the reporting of and payment for these services. To report the destruction of benign and premalignant skin lesions, we propose to create two HCPCS codes. The first code would describe the destruction of up to and including 15 lesions. The second code would describe destruction of each additional 10 lesions. To assign RVUs to these codes, we propose to take a weighted average of the RVUs assigned to CPT codes 11050 through 11052, 11200 and 11201, 17000 through 17105, 17110, and 17200 and 17201 based on the billing frequencies and the code descriptors. This proposed policy change is not explicitly addressed in our regulations. [[Page 34624]] E. Change in Coverage Status for Screening and Obsolete Procedures 1. Vital Capacity Testing CPT code 94150 (Vital capacity, total) is a screening measure. It is typically performed on patients who are asymptomatic. Because these tests are performed on patients who do not have symptoms of breathing problems, they represent preventive services that are, by statute, not covered by Medicare. Some Medicare carriers do not cover this code at present. However, we inadvertently failed to identify CPT code 94150 as noncovered by Medicare on a national basis. Therefore, we propose changing the status indicator for CPT code 94150 from ``A'' to ``N'' to represent its noncovered status. This policy change is not specifically addressed in our regulations. It would be reflected in the Medicare physician fee schedule database and in Addendum B (Relative Value Units and Related Information) of the physician fee schedule final rule, which will be published later this year. 2. Certain Cardiovascular Procedures In the absence of a national Medicare policy on the following CPT codes, we currently allow our Medicare carriers discretion in deciding whether to allow coverage for these procedures: ------------------------------------------------------------------------ CPT code Descriptor ------------------------------------------------------------------------ 93201 Phonocardiogram with or without ECG lead; with supervision during recording with interpretation and report (when equipment is supplied by the physician). 93202 Phonocardiogram * * *; tracing only, without interpretation and report (eg, when equipment is supplied by the hospital, clinic). 93204 Phonocardiogram * * *; interpretation and report. 93205 Phonocardiogram with ECG lead, with indirect carotid artery and/or jugular vein tracing, and/ or apex cardiogram; with interpretation and report). 93208 Phonocardiogram * * *; tracing only, without interpretation and report. 93209 Phonocardiogram * * *; interpretation and report only. 93210 Phonocardiogram intracardiac. 93220 Vectorcardiogram (VCG), with or without ECG; with interpretation and report. 93221 Vectorcardiogram * * *; tracing only, without interpretation and report. 93222 Vectorcardiogram * * *; interpretation and report only. ------------------------------------------------------------------------ As a result of our request for comments on the 5-year review of physician work RVUs in the December 1994 final rule (59 FR 63453), the American College of Cardiology commented that these 10 phonocardiography and vectorcardiography diagnostic tests are outmoded and of little clinical value. Our review of Medicare claims data for these tests supports this contention because the volume of claims for these tests has declined significantly in recent years. Only 17,925 claims were submitted in calendar year 1994 for all 10 tests. Based on the American College of Cardiology's recommendation, our review of our recent claims history, and our consultation with other medical specialty groups, we propose to discontinue coverage for these 10 diagnostic tests. The status indicators for these 10 procedures would be changed from ``A'' to ``N'' to reflect their noncovered status. This proposed policy change is not explicitly addressed in our regulations. F. Payments for Supervising Physicians in Teaching Settings 1. Definition of Approved Graduate Medical Education Programs Since publication of the December 1995 final rule, we have received questions about the difference in the definition of an approved residency program for purposes of the teaching physician rules under Sec. 415.152 (``Definitions'') and the definition used in the direct medical education rules under Sec. 413.86(b) (``Direct graduate medical education payments''). To be consistent, we propose to modify Sec. 415.152 to match the definition of an approved graduate medical education program in Sec. 413.86(b). We would add a reference to programs that are recognized as an ``approved medical residency program'' under Sec. 413.86(b). By making this change, the regulations text would reflect a common definition of approved graduate medical education programs for Medicare Part A and Part B. This is a technical change and would have no effect on the implementation of our revised policy regarding the payment for supervising physicians in teaching settings that is effective July 1, 1996. 2. Evaluation and Management Services Furnished in Certain Settings In the December 1995 final rule (60 FR 63135), we revised our policy regarding the payment for supervising physicians in teaching settings. We eliminated the attending physician criteria but clarified the physician presence requirement for services billed to the Medicare carrier. As part of our revised policy, we created a limited exception for residency programs that are fundamentally incompatible with a physical presence requirement. The exception to the physician presence requirement is for certain evaluation and management services (CPT codes 99201, 99202, 99203, 99211, 99212, and 99213) furnished in certain ambulatory care centers within the context of certain types of residency training programs. The exception is set forth in Sec. 415.174 (``Exception: Evaluation and management services furnished in certain centers''). As the exception currently reads, one of the criteria is that ``The range of services furnished by residents in the center includes * * * Comprehensive care not limited by organ system, diagnosis, or gender.'' (Sec. 415.174(a)(4)(iii)). It has come to our attention that many obstetric and gynecological residency programs have been restructured over the years to have a greater primary care focus. Some of these programs that otherwise qualify for an exception might be denied payment if the gender limitation were strictly applied. Contrary to suggestions in correspondence we received after publication of the final rule, it was not our intention to prevent obstetric and gynecological residency programs or other residency programs focusing on women's health care from qualifying for the exception solely because of the patient's gender. Thus, we propose to make a technical change to the regulations text to delete the reference to gender in Sec. 415.174(a)(4)(iii) and change the text to ``Comprehensive care not limited by organ system or diagnosis.'' Of course, such programs must satisfy the otherwise applicable criteria to qualify for an exception. [[Page 34625]] G. Change in Global Periods for Four Percutaneous Biliary Procedures The Society of Cardiovascular and Interventional Radiology advised us that a 90-day global period is inappropriate for four percutaneous biliary procedures. The four procedures are CPT codes 47490 (percutaneous cholecystectomy), 47510 (introduction of percutaneous transhepatic catheter for biliary drainage), 47511 (introduction of percutaneous transhepatic stent for internal and external biliary drainage), and 47630 (biliary duct stone extraction, percutaneous via T-tube tract, basket, or snare (for example, Burhenne technique)). The Society believes that these four procedures should have a ``0-day'' global period. We agree with the Society's arguments that a 90-day global period is contrary to the widespread practice conventions of percutaneous biliary intervention and is inconsistent with other similar interventions in the biliary tract and urinary tract. We believe that the global periods for these four codes should be changed. Therefore, we are proposing to change the global periods for these services from 90 days to 0 days. To make this change, we would reduce the work RVUs assigned to these procedures to reflect the lack of postsurgical work in the shortened global period. We propose to reduce the work RVUs for CPT codes 47490, 47510, 47511, and 47630 by 17 percent if we change the global periods. The 17 percent figure was taken from the original data developed by the Harvard School of Public Health Resource-Based Relative Value Study as the measure of the postsurgical work associated with these codes. This proposed policy change is not explicitly addressed in our regulations. 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. We anticipate that virtually all of the approximately 500,000 physicians who furnish covered services to Medicare beneficiaries would be affected by one or more provisions of this rule. In addition, physicians who are paid by private insurers for non-Medicare services would be affected to the extent that they are paid by private insurers that choose to use the proposed RVUs. This proposed rule is expected to have varying effects on the distribution of Medicare physician payments and services. With few exceptions, we expect that the impact would be limited. Although the proposed rule would not have a significant economic impact on a substantial number of small entities, we are preparing a voluntary regulatory flexibility analysis. Section 1848(c)(2)(B) of the Act requires that adjustments in a year may not cause the amount of expenditures for the year to differ by more than $20 million from the amount of expenditures that would have been made if these adjustments had not been made. If this threshold is exceeded, we would make adjustments to the conversion factors to preserve budget neutrality. The proposals discussed in sections B through H below would have no impact on total Medicare expenditures because the effects of these changes would be neutralized in the calculation of the conversion factors for 1997. B. Payment Area (Locality) and Corresponding Geographic Practice Cost Index Changes As mentioned earlier, our proposal would reduce existing urban/ rural payment differences. Overall, urban areas would experience an average decrease in payments of -0.14 percent, while rural areas will experience an increase in payments of 1 percent. We analyzed the effects of these changes on physicians by specialty. The changes are quite small and follow the expected pattern. We estimate that overall, physicians in family practice and general practice will experience modest increases of about 0.3 percent in payments, while most medical and surgical specialties will experience negligible decreases of about -0.1 to -0.2 percent. This pattern results from the tendency of specialists to be disproportionately concentrated in urban areas, which are estimated to experience a slight decrease in payments under our proposal. The impact on beneficiaries is likewise minor. We examined the impact by beneficiary age, gender, race, and income level. Roughly 20 percent of beneficiaries reside in areas in which payments decrease by less than 5 percent, roughly 50 percent live in areas that experience no change in payments, roughly 25 percent live in areas where payments will increase by less than 5 percent, and about 2 percent live in areas where payments would rise by 5 to 10 percent. The distribution of beneficiaries by age and gender and of Caucasian beneficiaries are nearly identical to this overall distribution. Minority beneficiaries are more heavily concentrated in areas that experience no change in payments; a lower proportion of minority beneficiaries live in both areas experiencing a loss and areas experiencing a gain than do Caucasian beneficiaries. For example, 14.4 percent of minority beneficiaries live in an area experiencing a loss compared to 21 percent of all beneficiaries who live in these areas. Beneficiaries living below poverty level are less likely than all beneficiaries to be living in an area experiencing a payment decrease under our proposal, 16 percent compared to 21 percent. It does not appear that vulnerable Medicare groups--minorities, the very old, or the poor--would suffer decreases in access resulting from our proposal. C. Special Rules for the Payment of Diagnostic Tests, Including Diagnostic Radiologic Procedures Our proposal would require that, to be covered under Medicare, diagnostic tests, including diagnostic radiologic procedures, must be ordered by the physician who treats a beneficiary or furnishes a consultation to the physician who treats the beneficiary. We would allow an exception for x-rays that demonstrate subluxation of the spine that are ordered for a chiropractor. Under Sec. 410.22(b)(2), no payment can be made to a chiropractor who orders diagnostic tests. We propose to allow payment for these x-rays when ordered by a physician who will not be treating the patient for subluxation of the spine. [[Page 34626]] Non-physician practitioners functioning within the specific benefit would be considered the physician treating the beneficiary for the purpose of the proposal. Putting this requirement in regulations (Sec. 410.31 ``Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests: Conditions'') would codify our current manual instruction. This proposed policy may result in some program savings due to the denial of payment for tests that may not be medically necessary because they were ordered by a physician who was not treating the beneficiary. However, we do not have sufficient data to furnish any reliable estimates of savings. D. Transportation in Connection with Furnishing Diagnostic Tests We propose to eliminate payment for the transportation of EKG equipment (HCPCS code R0076) by all billers. In 1994, the last year for which we have complete data, we allowed 260,686 services and paid $9,192,434. Therefore, were it not for our budget-neutrality adjustment, we estimate that this proposal would result in approximately a $9.2 million reduction in Medicare payments. E. Bundled Services 1. Hot or Cold Packs We propose to change the status indicator for CPT code 97010 (Application of a modality to one or more areas; hot or cold packs) to ``B'' to indicate that the service is covered under Medicare but payment for it is bundled into payment for other services. Separate payment for CPT code 97010 will not be permitted under this proposed change. The annual expenditures for CPT code 97010 under our current policy are approximately $41.2 million. Because the RVUs for this procedure will be redistributed across all physician fee schedule services in a budget neutral manner, there will be no measurable impact from this proposal. 2. Dermatology Procedures a. Bundling of Repair Codes into Excision Codes We propose to cease paying separately for CPT codes 12031 through 12057 and 13100 through 13152 (intermediate and complex repair codes, respectively) if these codes are billed in conjunction with CPT codes 11400 through 11446 and 11600 through 11646 (dermatology excision codes for benign and malignant lesions, respectively). Because we would redistribute the RVUs for the repair codes across the excision codes, there would be little budgetary effect from this proposal. b. Skin Lesion Destruction Codes We propose to change the way Medicare pays for the destruction of benign or premalignant skin lesions. Currently there are several CPT codes that describe a variety of ways of reporting the destruction of skin lesions. We propose to assign a ``G'' status code to CPT codes 11050 through 11052, 11200 and 11201, 17000 through 17105, 17110, and 17200 and 17201 and create two HCPCS codes to report the destruction of skin lesions. Because we will use a weighted average of the current RVUs assigned to the CPT codes that describe the destruction of benign or premalignant skin lesions in valuing the two proposed codes, this proposal would have no significant impact on Medicare expenditures. F. Change of Coverage Status for Screening and Obsolete Procedures 1. Vital Capacity Testing We propose changing the coverage status for vital capacity tests (CPT code 94150) from ``active'' to ``noncovered.'' These vital capacity tests are screening services. With limited exceptions, section 1862(a)(1)(A) of the Act precludes Medicare coverage for screening procedures. This code is infrequently billed; in 1994 only 101,150 services were paid for CPT code 94150 for a total Medicare expenditure of $1,077,600. We do not believe that the change in coverage status would have a significant impact on Medicare expenditures. We would also budget neutralize the $1 million across all fee schedule services. 2. Certain Cardiovascular Procedures We propose changing the coverage status for certain cardiovascular procedures (CPT codes 93201, 93202, 93204, 93205, 93208, 93209, 93210, 93220, 93221, and 93222) to noncovered. Because there has been a decline in the billing of these services in recent years and in 1994, we only allowed a total of 17,925 services with $690,326 in allowed charges for all 10 diagnostic tests, we do not believe that the change in coverage status would have a significant impact on Medicare expenditures. G. Payments for Supervising Physicians in Teaching Settings This proposed rule would make a technical change to Sec. 415.152 (``Definitions'') to make the definition of an approved graduate medical education program consistent with the definition in Sec. 413.86(b) (``Direct graduate medical education payments''). Because this is only a technical change to standardize almost identical definitions, it would have no budgetary impact on Medicare expenditures. We propose a technical change to remove the word ``gender'' from Sec. 415.174(a)(4)(iii) (``Exception: Evaluation and management services furnished in certain centers''). We did not include the reference to gender with the intention of excluding obstetric and gynecological or other women's care residency programs solely because of patient gender. This technical change would make clear that the exception criteria would not be applied in such a manner. Because this technical change merely clarifies our intent with respect to a policy that has not yet been implemented, there would be no budgetary effect. H. Change in Global Period for Four Percutaneous Biliary Procedures To implement our proposal to change the global periods for four percutaneous biliary procedures (CPT codes 47490, 47510, 47511, and 47630) from 90 days to 0 days, we are proposing to reduce the work RVUs for these procedures by 17 percent. These work RVUs will be redistributed across all services; therefore, there is no significant impact. I. 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 rule would have little direct effect on payments to rural hospitals since this rule would change only payments made to physicians and certain other practitioners under Part B of the Medicare program and would [[Page 34627]] make no change in payments to hospitals under Part A. We do not believe the changes would have a major, indirect effect on rural hospitals. Therefore, we are not preparing an analysis for section 1102(b) of the Act since we have determined, and the Secretary certifies, that this rule would not have a significant impact on the operations of a substantial number of small rural hospitals. In accordance with the provisions of Executive Order 12866, this proposed rule was reviewed by OMB. List of Subjects 42 CFR Part 410 Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Rural areas, X-rays. 42 CFR Part 415 Health facilities, Health professions, Medicare, and Reporting and recordkeeping requirements. 42 CFR chapter IV would be amended as set forth below: PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS A. Part 410 is amended as set forth below: 1. The authority citation for part 410 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), unless otherwise indicated. 2. In Sec. 410.32 paragraphs (a) and (b) are redesignated as paragraphs (b) and (c), respectively, and a new paragraph (a) is added to read as follows: Sec. 410.32 Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests: Conditions. (a) Ordering diagnostic tests. All diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests must be ordered by the physician who treats the beneficiary, that is, the physician who is actively furnishing a consultation or treating a beneficiary for a specific medical problem(s) and uses the results in the management of the beneficiary's specific medical problem(s). Physicians who order the x-ray used by a chiropractor to demonstrate the subluxation of the spine in a beneficiary who is receiving manual manipulation treatments are exempted from this requirement. Non-physician practitioners (physician assistants, nurse practitioners, and clinical nurse specialists) who provide services that would be physician services if furnished by a physician and who are operating within the scope of their statutory benefit are considered the physician treating the beneficiary for the purpose of this section. * * * * * PART 415--SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS, SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND RESIDENTS IN CERTAIN SETTINGS B. Part 415 is amended as set forth below: 1. The authority citation for part 415 continues to read as follows: Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 2. In Sec. 415.152 the introductory text is republished, and the definition of ``approved graduate medical education (GME) program'' is revised to read as follows: Sec. 415.152 Definitions. As used in this subpart-- Approved graduate medical education (GME) program means one of the following: (1) A residency program approved by the Accreditation Council for Graduate Medical Education of the American Medical Association, by the Committee on Hospitals of the Bureau of Professional Education of the American Osteopathic Association, by the Council on Dental Education of the American Dental Association, or by the Council on Podiatric Medicine Education of the American Podiatric Medical Association. (2) A program otherwise recognized as an ``approved medical residency program'' under Sec. 413.86(b) of this chapter. * * * * * Sec. 415.174 [Amended] 3. In Sec. 415.174, in paragraph (a)(4)(iii), the phrase ``system, diagnosis, or gender'' is removed, and the phrase ``system or diagnosis'' is added in its place. (Catalog of Federal Domestic Assistance Program No. 93.774, Medicare--Supplementary Medical Insurance Program) Dated: June 21, 1996. Bruce C. Vladeck, Administrator, Health Care Financing Administration. Dated: June 21, 1996. Donna E. Shalala, Secretary. BILLING CODE 4120-01-P [[Page 34628]] [GRAPHIC] [TIFF OMITTED] TP02JY96.000 [[Page 34629]] [GRAPHIC] [TIFF OMITTED] TP02JY96.001 [[Page 34630]] [GRAPHIC] [TIFF OMITTED] TP02JY96.002 [[Page 34631]] [GRAPHIC] [TIFF OMITTED] TP02JY96.003 [[Page 34632]] [GRAPHIC] [TIFF OMITTED] TP02JY96.004 [[Page 34633]] [GRAPHIC] [TIFF OMITTED] TP02JY96.005 [[Page 34634]] [GRAPHIC] [TIFF OMITTED] TP02JY96.006 [[Page 34635]] [GRAPHIC] [TIFF OMITTED] TP02JY96.007 [[Page 34636]] [GRAPHIC] [TIFF OMITTED] TP02JY96.008 [[Page 34637]] [GRAPHIC] [TIFF OMITTED] TP02JY96.009 [[Page 34638]] [GRAPHIC] [TIFF OMITTED] TP02JY96.010 [[Page 34639]] [GRAPHIC] [TIFF OMITTED] TP02JY96.011 [[Page 34640]] [GRAPHIC] [TIFF OMITTED] TP02JY96.012 [[Page 34641]] [GRAPHIC] [TIFF OMITTED] TP02JY96.013 [[Page 34642]] [GRAPHIC] [TIFF OMITTED] TP02JY96.014 [[Page 34643]] [GRAPHIC] [TIFF OMITTED] TP02JY96.015 [[Page 34644]] [GRAPHIC] [TIFF OMITTED] TP02JY96.016 [[Page 34645]] [GRAPHIC] [TIFF OMITTED] TP02JY96.017 [[Page 34646]] [GRAPHIC] [TIFF OMITTED] TP02JY96.018 [[Page 34647]] [GRAPHIC] [TIFF OMITTED] TP02JY96.019 [[Page 34648]] [GRAPHIC] [TIFF OMITTED] TP02JY96.020 [[Page 34649]] [GRAPHIC] [TIFF OMITTED] TP02JY96.021 [[Page 34650]] [GRAPHIC] [TIFF OMITTED] TP02JY96.022 [[Page 34651]] [GRAPHIC] [TIFF OMITTED] TP02JY96.023 [[Page 34652]] [GRAPHIC] [TIFF OMITTED] TP02JY96.024 [[Page 34653]] [GRAPHIC] [TIFF OMITTED] TP02JY96.025 [[Page 34654]] [GRAPHIC] [TIFF OMITTED] TP02JY96.026 [[Page 34655]] [GRAPHIC] [TIFF OMITTED] TP02JY96.027 [[Page 34656]] [GRAPHIC] [TIFF OMITTED] TP02JY96.028 [[Page 34657]] [GRAPHIC] [TIFF OMITTED] TP02JY96.029 [[Page 34658]] [GRAPHIC] [TIFF OMITTED] TP02JY96.030 [[Page 34659]] [GRAPHIC] [TIFF OMITTED] TP02JY96.031 [[Page 34660]] [GRAPHIC] [TIFF OMITTED] TP02JY96.032 [[Page 34661]] [GRAPHIC] [TIFF OMITTED] TP02JY96.033 [[Page 34662]] [GRAPHIC] [TIFF OMITTED] TP02JY96.034 [FR Doc. 96-16744 Filed 6-27-96; 9:43 am] BILLING CODE 4120-01-C