[Federal Register Volume 70, Number 37 (Friday, February 25, 2005)]
[Notices]
[Pages 9355-9358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-3727]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3119-FN]
RIN 0938-AM36


Medicare Program; Procedures for Maintaining Code Lists in the 
Negotiated National Coverage Determinations for Clinical Diagnostic 
Laboratory Services

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

ACTION: Final notice.

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SUMMARY: This notice finalizes the procedures proposed in the Federal 
Register on December 24, 2003 (68 FR 74607). It establishes the 
procedures for maintaining the lists of codes that were included in the 
national coverage determinations (NCDs) that were announced in an 
addendum to the final rule published in the Federal Register on 
November 23, 2001 (66 FR 58788). The final notice also sets forth the 
circumstances in which a laboratory is permitted to use the date a 
specimen was retrieved from storage for testing as the date of service 
instead of the date of collection.

DATES: Effective Date: The notice is effective on March 28, 2005.

FOR FURTHER INFORMATION CONTACT: Jackie Sheridan-Moore, (410) 786-4635.

SUPPLEMENTARY INFORMATION:

I. Background

A. Current Statutory Authority and Medicare Policies

    Sections 1833 and 1861 of the Social Security Act (the Act) provide 
for payment of, among other things, clinical diagnostic laboratory 
services under Medicare Part B. A laboratory furnishing tests on human 
specimens must meet all applicable requirements of the Clinical 
Laboratory Improvement Amendments of 1988 (CLIA) (Pub. L. 100-578) 
enacted on October 31, 1988, as implemented by the regulations set 
forth at 42 CFR part 493. Part 493 applies to all laboratories seeking 
payment under the Medicare and Medicaid programs.
    Under section 1842(a) of the Act, we contract with carriers to 
perform bill processing and benefit payment functions for Medicare Part 
B (Supplementary Medical Insurance). Under section 1816(a) of the Act, 
we contract with fiscal intermediaries to perform claims processing and 
benefit payment functions for Medicare Part A (Hospital Insurance). 
Fiscal intermediaries also process claims payable from the Medicare 
Part B trust fund that are submitted by providers that participate in 
Medicare Part A, like hospitals and skilled nursing facilities. We use 
the term ``contractor(s)'' to mean carriers and fiscal intermediaries.
    Medicare contractors review and adjudicate claims for services to 
ensure that Medicare payments are made only for services that are 
covered under Medicare Part A or Part B. If a contractor develops a 
local coverage determination (LCD) (formerly called local medical 
review policies (LMRP)), its LCD/LMRP applies only within the 
geographic area it serves as stated in the September 26, 2003 notice 
(68 FR 55636). Current guidance regarding the development of LCDs/LMRPs 
appears in section 13.1.3 of the Program Integrity Manual (HCFA Pub. 
100-8).

B. Legislation

    Section 4554(b)(1) of the Balanced Budget Act of 1997 (BBA) (Pub. 
L. 105-133) enacted on August 5, 1997, mandates the use of a negotiated 
rulemaking committee to develop national coverage and administrative 
policies for clinical diagnostic laboratory services payable under 
Medicare Part B by January 1, 1999. Section 4554(b)(2) of the BBA 
requires that these national coverage policies be designed to promote 
program integrity and national uniformity and simplify administrative 
requirements for clinical diagnostic laboratory services payable under 
Medicare Part B.
    As directed by this statutory provision, we convened a negotiated 
rulemaking committee that developed recommendations for coverage and 
administrative policies in accordance with the provisions of the BBA. 
On March 10, 2000, we published a proposed rule in the Federal Register 
(65 FR 13082) proposing to adopt the committee's recommendations. The 
final rule was published on November 23, 2001 in the Federal Register 
(66 FR 58788).

C. National Coverage Determinations (NCDs)

    The final rule on coverage and administrative policies for clinical 
diagnostic laboratory services includes an addendum containing NCDs for 
23 clinical diagnostic laboratory tests. These NCDs are binding on all 
Medicare carriers, intermediaries, quality improvement organizations, 
health maintenance organizations, competitive medical plans, and health 
care prepayment plans.
    In accordance with the recommendations of the negotiated rulemaking 
committee, we developed these clinical diagnostic laboratory NCDs in a 
prescribed format. Each NCD has the following sections: the official 
title of the NCD, other names or abbreviations, description, Healthcare 
Common Procedure Coding System (HCPCS) codes, indications, limitations, 
International Classification of Diseases, Ninth Edition, Clinical 
Modification (ICD-9-CM) codes covered by the Medicare program, reasons 
for denial, ICD-9-CM codes denied, ICD-9-CM codes that do not support 
medical necessity, sources of information, coding guidelines, 
documentation requirements, and other comments.
    For each of the clinical diagnostic laboratory service NCDs 
(laboratory NCDs), every ICD-9-CM diagnosis code falls into one of the 
three code lists. The list of covered codes is intended to reflect the 
coding translation of the conditions enumerated in the narrative 
indications section of the NCDs.
    On April 27, 1999, we published a notice (64 FR 22619) outlining 
our procedures for developing and revisiting NCDs. We further updated 
the NCD process in a notice published in the Federal Register on 
September 26, 2003 (68 FR 55634). In the November 23, 2001 final rule 
(66 FR 58793) for coverage and administrative policies for clinical 
diagnostic laboratory services, we stated that we will use the NCD 
process for making changes to the laboratory NCDs. At the conclusion of 
the NCD decision-making process, decision memoranda will be published 
on the CMS Web site that announce the policy we intend to issue and 
discuss the evidence we evaluated and our rationale for the final 
national coverage

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determination. Coverage issues are announced at http://cms.hhs.gov/coverage.

D. Updates of Coding Systems

1. ICD-9-CM Codes
    International Classification of Diseases, Ninth Edition, Clinical 
Modification (ICD-9-CM) codes were developed in 1977 as a means of 
classifying morbidity data for indexing medical records, medical case 
reviews, and ambulatory and other medical care programs, as well as for 
basic health statistics. Since 1989, Sec.  424.32(a)(2) has required 
the reporting of ICD-9-CM coding on all bills for physicians' services.
    In September 1985, the ICD-9-CM Coordination and Maintenance 
Committee (the Committee) was formed. This is a Federal 
interdepartmental committee, co-chaired by CMS and the National Center 
for Health Statistics (NCHS), and charged with maintaining and updating 
the ICD-9-CM system. The Committee is jointly responsible for approving 
coding changes, and developing errata, addenda, and other modifications 
to the ICD-9-CM to reflect newly developed procedures and technologies 
and newly identified diseases.
    The Committee holds public meetings for discussion of educational 
issues and proposed coding changes. These meetings provide an 
opportunity for representatives of recognized organizations in the 
coding field, such as the American Health Information Management 
Association (AHIMA), the American Hospital Association (AHA), and 
various physician specialty groups to contribute ideas on coding 
matters. After considering the opinions expressed at the public 
meetings and in writing, the Committee formulates recommendations that 
must be approved by the agencies.
    ICD-9-CM coding updates are issued annually but in accordance with 
the Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 (MMA) may be issued semi-annually beginning on October 1, 2004. 
Updated ICD-9-CM codes can be found at http://cms.hhs.gov/paymentsystems/icd9. Minutes from the ICD-9-CM Committee meetings are 
available on the Internet at http://cms.hhs.gov/paymentsystems/icd9. We 
announce the annual ICD-9-CM procedure coding changes in the Federal 
Register as part of the annual update of the hospital inpatient 
prospective payment system (PPS). Section 503(a) of the MMA requires 
updating of the ICD-9-CM codes in April of each year, but the addition 
of these codes will not require adjustment to the payment systems until 
the following fiscal year. Consequently, if we update codes for April, 
we will do so through our issuance system and follow it up with a 
notice in the subsequent PPS Final Rule in the Federal Register. These 
codes are not accompanied with payment adjustments. In addition, 
information on the diagnosis coding changes is available on the 
Internet at http://www.cdc.gov/nchs/icd9.htm.
2. CPT-4 Coding
    The Current Procedural Terminology (CPT), Fourth Edition, is a 
listing of descriptive terms and identifying codes for reporting 
medical services and procedures performed by physicians. The purpose of 
the terminology is to provide consistent codes for medical, surgical, 
and diagnostic services.
    The American Medical Association (AMA) convenes the CPT Editorial 
Panel (the Panel) quarterly to consider requests and suggestions for 
changes to CPT. The Panel uses the services of an Advisory Committee 
with expertise in a wide variety of specialties. More information 
regarding the CPT Editorial Panel is available on the following 
Internet Web site: http://www.ama-assn.org/ama/pub/category/3884.html.

E. Implementation of NCDs

    One of the goals of section 4554 of the BBA is to promote 
uniformity in Medicare processing of claims for clinical diagnostic 
laboratory services. We developed an electronic edit table module that 
is installed in each of the Medicare claims processing contractors' 
systems. The edit module ensures that: (1) Each contractor matches 
diagnosis to procedures in the same manner; (2) competing laboratories 
in an area will have their claims processed identically regardless of 
whether they are processed by the carrier or fiscal intermediary; and 
(3) all local contractors will have implemented the laboratory NCDs at 
the same time. The edit module is updated quarterly as necessary to 
accommodate coding changes and NCD modifications.

II. Provisions of the Proposed Notice

A. Proposed Process for Code Maintenance

    In the preamble of the final rule published on November 23, 2001 in 
the Federal Register (66 FR 58788), we announced that we intend to 
conduct maintenance of the 23 laboratory NCDs and create new laboratory 
NCDs through the NCD process described in the general notice in the 
Federal Register on April 27, 1999 (64 FR 22619). This process has 
since been updated by a notice published on September 26, 2003 (68 FR 
55634). These notices describe an evidence-based method in which 
determinations are made based on the scientific literature. Formal 
requests for an NCD must be made in accordance with the provisions of 
the September 26, 2003 notice (68 FR 55636). The NCD process is further 
modified by the provisions of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (MMA). We expect to issue a 
guidance document incorporating the changes made to the NCD process by 
section 731 of the MMA in the near future. A summary of the NCD process 
is posted on the Internet at http://www.cms.hhs.gov/coverage/8a4.asp.
    We believe that this NCD process is appropriate for creating new 
NCDs for clinical diagnostic laboratory services. Likewise, the NCD 
process is appropriate for requests for substantive changes to the 
existing laboratory NCDs. However, we believe this process is unduly 
burdensome and time-consuming for requests for other changes to the 
existing laboratory NCD code lists.
    We proposed to establish three separate processes for requesting 
changes to the laboratory NCDs. In this final notice, we are finalizing 
the procedures we proposed in the December 24, 2003 Federal Register 
(68 FR 74607). Substantive changes would use the normal evidence-based 
NCD process. Coding changes that flow from the existing NCD narratives 
of covered indications would be requested by a letter detailing how the 
covered indication(s) in the narrative support the proposed coding and 
descriptor changes. Scientific evidence in support of these requests 
would not be required but would be welcomed to support the requestor's 
position. Typographical errors and new codes and descriptors would be 
implemented through program instructions without public comments.
1. Codes that Flow From the Covered Indications Narrative
    We proposed to establish an abbreviated process for handling 
requests for certain NCD narrative based coding changes to the 
laboratory NCDs. In order for change requests to qualify for this 
process, the new coding must flow from the existing narrative 
indications in a laboratory NCD. Requests that, in effect, constitute 
requests to add new indications must continue to use the NCD evidence-
based process outlined in the September 26, 2003 Federal Register (68 
FR 55636).
    The abbreviated process is similar to the NCD process in that it 
includes

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posting on the Internet and an opportunity for the public to comment 
before coding change(s) are made. The principal difference between the 
processes is the volume of information required. Requesters using the 
abbreviated process will submit a letter detailing the provision of the 
NCD narrative that clearly indicates coverage for the requested code. 
Scientific literature in support of the coding change is not required. 
However, scientific literature supporting the request and clinical 
guidelines from relevant healthcare organizations is welcome.
2. Clerical Coding Change
    The ICD-9-CM diagnosis codes and the CPT procedure codes are 
periodically updated with coding and descriptor changes. Codes and 
descriptors that are changed through this process may include those 
that have been incorporated in the laboratory NCDs. We believe the NCDs 
must be updated quickly to reflect current coding practices whenever 
the coding and descriptor changes occur. Similarly, clerical errors in 
laboratory NCD code lists, like typographical errors, should be 
corrected as quickly as possible. Consequently, we proposed to 
establish a streamlined process for making clerical changes to codes 
contained within the laboratory NCDs. (See the December 24, 2003 
Federal Register notice (68 FR 74607)).
    Under this proposal, the general public would request clerical or 
ministerial changes by sending a letter to: Director, Coverage and 
Analysis Group, Mail Stop C1-09-06, 7500 Security Boulevard, Baltimore, 
Maryland 21244-1850. In addition, we would initiate this process to 
correct clerical and ministerial errors that we discover. We would 
incorporate all of these changes into the edit module software and 
announce them in the coding manual that we publish on the Internet at 
http://www.cms.hhs.gov/ncd/labindexlist.asp.
    In summary, we proposed to establish three separate processes for 
maintaining the laboratory NCDs. We would make clerical and ministerial 
changes quickly without prior posting on the Internet or public 
comment. We would announce clerical changes in a CMS instruction before 
incorporation into the edit software. Coding changes that flow from the 
narrative of the existing NCD would be handled through an abbreviated 
process similar to the NCD process. Requests for coding changes that 
flow from the existing narrative NCD would not require the submission 
of scientific evidence. We would post a notice of this type of request 
on the Internet and accept public comments for 30 days before making a 
determination. Requests for a substantive change to an NCD would 
continue to be handled through the normal NCD process described in the 
September 26, 2003 Federal Register (68 FR 55634). Requests for 
substantive changes to NCDs would continue to require scientific 
evidence in support of the change in policy. We would post a tracking 
sheet announcing our acceptance of a request to substantively change an 
NCD on the Internet and public comments would be solicited for 30 days 
before making a determination. The draft decision memorandum for NCDs 
would be open to pubic comment before implementation.

B. Publication of the Code Lists for the Laboratory NCDs

    We have generally published NCDs in the Medicare Coverage Issues 
Manual (CIM). This manual was replaced by the National Coverage 
Determination (NCD) Manual.
    We proposed to incorporate only the narrative portion of the 
laboratory NCDs in the NCD Manual. The coding lists and standardized 
portions of the NCDs would be displayed in a laboratory NCD Coding 
Manual that is available electronically on the Internet at http://www.cms.hhs.gov/ncd/labindexlist.asp. Printed copies would be made 
available to readers who do not have access to the Internet for a fee 
of 10 cents per page.

C. Date of Service

    In the final rule of coverage and administrative policies for 
clinical diagnostic laboratory services that we published on November 
23, 2001 (66 FR 58792), we clarified the date of service for clinical 
diagnostic laboratory services. Specifically, we stated that: ``For 
laboratory tests that require a specimen from stored collections, the 
date of service should be defined as the date the specimen was obtained 
from the archives.''
    The final rule did not further define how long a specimen must be 
stored before it is considered ``archived.'' We clarified in Program 
Memorandum AB-02-134, that in the absence of specific instructions 
issued nationally through rulemaking, contractors have discretion in 
making determinations regarding the length of time a specimen must be 
stored to be considered ``archived.'' We stated, however, that the rule 
contemplates a long storage period.
    We proposed to further clarify the date of service provision for 
clinical diagnostic laboratory services. We suggested requiring that a 
specimen must be stored for more than 30 calendar days to be considered 
``archived.'' The date of service for these archived specimens would be 
the date the specimen was obtained from storage. Specimens stored 30 
days or less would have a date of service of the date the specimen was 
collected.
    The final rule also clarified that the date of service for tests 
when the collection spanned more than 24 hours would be the date the 
collection began. These extended collection periods are common on fecal 
occult blood tests and urine collections for hormone analysis in 
pregnant women.
    We have received several comments since issuing the final rule that 
stated that the common practice in the laboratory community is to use 
the date the collection ended as the date of service. We proposed to 
alter our policy to specify that the date of service would be the date 
the collection ended instead of the date the collection began.

III. Analysis of and Responses to Public Comments

    We received no public comments on the December 24, 2003 proposed 
notice (68 FR 74607).

IV. Provisions of the Final Notice

    We are establishing the provisions of the proposed notice as final.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995 (PRA), we are required to 
provide 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether OMB should approve an information 
collection, section 3506(c)(2)(A) of the PRA requires that we solicit 
comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In summary, we are establishing a new process for handling requests 
for certain coding changes to the laboratory NCDs. In order for 
requests to qualify for this process, requests must be made in writing 
to us, clearly stating the rationale for the coding change. The request 
must articulate that the codes

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flow from the existing narrative indications for the clinical 
diagnostic laboratory test. In other words, the requested change must 
be classified as a correction, an updating change, or a replacement to 
an existing code. Requests that, in effect, constitute requests to add 
new indications must use the NCD evidence-based process outlined in the 
April 27, 1999 and subsequent September 26, 2003 issues of the Federal 
Register.
    The burden associated with the process referenced above is the time 
and effort necessary to submit a request in writing, clearly stating 
the rationale for the coding change. We believe that it will require 
one hour per request and that eight requests will be submitted on an 
annual basis.
    However, based on the current number of submissions received on an 
annual basis (less then 10), this is not an information collection 
defined by the PRA (5 CFR 1320.3(c)(4)). If in the future we receive 
more than 10 responses on an annual basis, we will submit these 
information collection requirements to OMB for review and approval as 
required by the PRA.

VI. Regulatory Impact Statement

    In this notice, we establish an abbreviated mechanism for making 
changes to the lists of ICD-9-CM and CPT codes that are included in the 
laboratory NCDs. We clarify when a specimen is considered archived for 
purposes of the date of service provision contained in the November 21, 
2001 final rule. We do not expect this rule to impose any significant 
burden on laboratories. The established policy clarifications may 
lessen the burden on laboratories by establishing uniform procedures 
for reporting date of service on archived specimens. Should there be 
any unanticipated increase or decrease of burden, the effects will be 
minimal.
    We have examined the impacts of this final notice as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review) 
and the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 
96-354), section 1102(b) of the Social Security Act, the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
    Executive Order 12866 (as amended by Executive Order 13258, which 
merely reassigns responsibility of duties) directs agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
We have reviewed this final notice and have determined it is not a 
major rule. Therefore, we are not required to perform an assessment of 
the costs and savings. The notice is purely procedural and, therefore, 
is not expected to impose any appreciable burden or generate compliance 
costs for laboratories.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals, and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. For purposes of the RFA, 
approximately 80 percent of clinical diagnostic laboratories are 
considered small businesses according to the Small Business 
Administration's size standards with total revenues of $29 million or 
less in any 1 year. Individuals and States are not included in the 
definition of a small entity. We are not preparing an analysis for the 
RFA because we have determined that this final notice will not have a 
significant impact on a substantial number of small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside a Metropolitan 
Statistical Area and has fewer than 100 beds. We are not preparing an 
analysis for section 1102(b) of the Act because we have determined that 
this final notice will not have a significant impact on the operations 
of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any notice that may result in expenditure in any 1 year by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $110 million. This final notice will have no 
consequential effect on the governments mentioned or on the private 
sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a final notice that imposes 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. We have 
reviewed this final notice and have determined that it will not have a 
substantial effect on State or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

    Dated: September 1, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: November 9, 2004.
Tommy G. Thompson,
Secretary.
[FR Doc. 05-3727 Filed 2-24-05; 8:45 am]
BILLING CODE 4120-01-P