[Federal Register Volume 70, Number 85 (Wednesday, May 4, 2005)]
[Rules and Regulations]
[Pages 23690-23768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-8875]



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Part IV





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 416



Medicare Program; Update of Ambulatory Surgical Center List of Covered 
Procedures; Interim Final Rule

  Federal Register / Vol. 70, No. 85 / Wednesday, May 4, 2005 / Rules 
and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 416

[CMS-1478-IFC]


Medicare Program; Update of Ambulatory Surgical Center List of 
Covered Procedures

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule with comment period revises the list 
of procedures that are covered when furnished in an ambulatory surgery 
center (ASC) in accordance with section 1833(i)(1) of the Social 
Security Act. We published our proposed deletions and additions in the 
Federal Register on November 26, 2004.
    In this interim final rule, we respond to public comments and make 
final additions to and deletions from the current list of Medicare 
approved ambulatory surgical center (ASC) procedures.

DATES: Effective date: These regulations are effective on July 5, 2005.
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on July 5, 2005.

ADDRESSES: In commenting, please refer to file code CMS-1478-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of three ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.cms.hhs.gov/regulations/ecomments. (Attachments should be in Microsoft Word, WordPerfect, or 
Excel; however, we prefer Microsoft Word.)
    2. By mail. You may mail written comments (one original and two 
copies) to the following address ONLY: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: CMS-1478-
IFC, PO Box 8017, Baltimore, MD 21244-8017.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-7195 in advance to schedule your arrival 
with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201; or 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    (Because access to the interior of the HHH Building is not readily 
available to persons without Federal Government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for persons wishing to retain a proof of filing by stamping 
in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Dana Burley, (410) 786-0378.

SUPPLEMENTARY INFORMATION:
    Submitting Comments: We will consider comments from the public 
regarding the addition of procedures to the ASC list, deletion of 
procedures from the ASC list, and the ASC payment group assignment for 
newly-added procedures that are identified with an asterisk in Addendum 
A to signify that the procedure was not proposed for addition or 
deletion in the November 26, 2004 rule. You can assist us by 
referencing the file code CMS-1478-IFC and the specific ``issue 
identifier'' that precedes the section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all electronic 
comments received before the close of the comment period on its public 
website as soon as possible after they have been received. Hard copy 
comments received timely will be available for public inspection as 
they are received, generally beginning approximately 3 weeks after 
publication of a document, at the headquarters of the Centers for 
Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, 
Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 
p.m. To schedule an appointment to view public comments, phone 1-800-
743-3951.

I. Background

    [If you choose to comment on issues in this section, please include 
the caption ``Background'' at the beginning of your comments.]

A. Legislative History

    Section 1832(a)(2)(F)(i) of the Social Security Act (the Act) 
provides that benefits under the Medicare Supplementary Medical 
Insurance program (Part B) include payment for facility services 
furnished in connection with surgical procedures we specify and which 
are performed in an ambulatory surgical center (ASC). To participate in 
the Medicare program as an ASC, a facility must meet the standards 
specified in section 1832(a)(2)(F)(i) of the Act; in 42 CFR 416.25, 
which sets forth general conditions and requirements for ASCs; and, in 
42 CFR 416, subpart C, which provides specific conditions for coverage 
for ASCs.
    There are two primary elements in the total cost of performing a 
surgical procedure--the cost of the physician's professional services 
in performing the procedure and the cost of items and services 
furnished by the facility where the procedure is performed (for 
example, surgical supplies and equipment and nursing services). This 
interim final rule with comment period addresses the second element, 
the coverage and payment of facility fees for ASC services under the 
current payment system. As we note below, section 626(b) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(MMA) (Pub. L. 108-173, enacted on December 8, 2003) requires that we 
develop a revised payment system for ASC facility services that would 
be implemented no earlier than January 1, 2006. This interim final rule 
addresses additions to and deletions from the list of Medicare approved 
ASC procedures before the implementation of that revised payment 
system.
    Under the current ASC facility services payment system, the ASC 
payment rate is a standard overhead amount established on the basis of 
our estimate of a fair fee that takes into account the costs incurred 
by ASCs generally in providing facility services in connection with 
performing a specific procedure. The report of the Conference Committee 
accompanying section 934 of the Omnibus Budget Reconciliation Act of 
1980 (OBRA) (Pub. L. 96-499), which enacted the ASC benefit in December 
1980, states that this overhead factor is expected to be calculated on 
a prospective basis

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using sample survey and similar techniques to establish reasonable 
estimated overhead allowances, which take account of volume (within 
reasonable limits), for each of the listed procedures. (See H.R. Rep. 
No. 96-1479, at 134 (1980)).
    To establish those reasonable estimated allowances for services 
furnished before implementation of the revised payment system mandated 
by the MMA, section 626(b)(1) of the MMA amended section 
1833(i)(2)(A)(i) of the Act to require us to take into account the 
audited costs incurred by ASCs to perform a procedure, in accordance 
with a survey. Payment for ASC facility services is subject to the 
usual Medicare Part B deductible and coinsurance requirements, and the 
amounts paid by Medicare must be 80 percent of the standard fee.
    Section 1833(i)(1) of the Act requires us to specify, in 
consultation with appropriate medical organizations, surgical 
procedures that can be safely performed in an ASC and to review and 
update the list of ASC procedures at least every two years.
    Section 141(b) of the Social Security Act Amendments of 1994 (SSAA 
1994) requires us to establish a process for reviewing the 
appropriateness of the payment amount provided under section 
1833(i)(2)(A)(iii) of the Act for intraocular lenses (IOLs) for a class 
of new-technology IOLs. That process was the subject of a separate 
final rule entitled ``Adjustment in Payment Amounts for New Technology 
Intraocular Lenses Furnished by Ambulatory Surgical Centers,'' 
published on June 16, 1999 in the Federal Register (64 FR 32198).

B. Summary of Updates of the ASC List

    Section 934 of the Omnibus Budget Reconciliation Act of 1980 
amended sections 1832(a)(2) and 1833 of the Act to authorize the 
Secretary to specify surgical procedures that, although appropriately 
performed in an inpatient hospital setting, can also be performed 
safely on an ambulatory basis in an ASC, a hospital outpatient 
department, or a rural primary care hospital. The report accompanying 
the legislation explained that the Congress intended procedures 
currently performed on an ambulatory basis in a physician's office that 
do not generally require the more elaborate facilities of an ASC not be 
included in the list of covered procedures (H.R. Rep. No. 96-1167, at 
390, reprinted in 1980 U.S.C.C.A.N. 5526, 5753). In a final rule 
published August 5, 1982 in the Federal Register (47 FR 34082), we 
established regulations that included criteria for specifying which 
surgical procedures were to be included for purposes of implementing 
the ASC facility benefit.
    Subsequently, in accordance with Sec.  416.65(c), we published an 
update of the ASC list in the Federal Register on March 28, 2003 (68 FR 
15268).
    During years when we do not update the list in the Federal 
Register, we revise the list to be consistent with annual calendar year 
changes in codes established by the American Medical Association (AMA) 
Current Procedural Terminology (CPT), removing from the ASC list codes 
that are deleted by CPT and adding new codes that replace codes already 
on the ASC list. These annual CPT updates are implemented through 
program instructions to carriers who process ASC claims.

C. Regulatory Requirements

1. Sections 416.65(a), (b), and (c)
    Section 416.65(a) specifies general standards for procedures on the 
ASC list. ASC procedures are those surgical and medical procedures that 
are--
     Commonly performed on an inpatient basis but may be safely 
performed in an ASC;
     Not of a type that are commonly performed or that may be 
safely performed in physicians' offices;
     Limited to procedures requiring a dedicated operating room 
or suite and generally requiring a post-operative recovery room or 
short term (not overnight) convalescent room; and
     Not otherwise excluded from Medicare coverage.
    Specific standards in Sec.  416.65(b) limit ASC procedures to those 
that do not generally exceed 90 minutes operating time and a total of 4 
hours recovery or convalescent time. If anesthesia is required, the 
anesthesia must be local or regional anesthesia, or general anesthesia 
of not more than 90 minutes duration.
    Section 416.65(c) excludes from the ASC list procedures that 
generally result in extensive blood loss, that require major or 
prolonged invasion of body cavities, that directly involve major blood 
vessels, or that are generally emergency or life-threatening in nature.
2. Criteria for Additions To or Deletions From the ASC List
    In April 1987, we adopted quantitative criteria as tools for 
identifying procedures that were commonly performed either in a 
hospital inpatient setting or in a physician's office. Collectively, 
commenters responding to a notice published on February 16, 1984 in the 
Federal Register (49 FR 6023) had recommended that virtually every 
surgical CPT code be included on the ASC list. Consulting with other 
specialist physicians and medical organizations as appropriate, our 
medical staff reviewed the recommended additions to the list to 
determine which code or series of codes were appropriately performed on 
an ambulatory basis within the framework of the regulatory criteria in 
Sec.  416.65. However, when we arrayed the proposed procedures by the 
site where they were most frequently performed according to our claims 
payment data files (1984 Part B Medicare Data (BMAD)), we found that 
many codes were not commonly performed on an inpatient basis or were 
performed in a physician's office the majority of the time, and, thus, 
would not meet the standards in our regulations. Therefore, we decided 
that if a procedure was performed on an inpatient basis 20 percent of 
the time or less, or in a physician's office 50 percent of the time or 
more, it would be excluded from the ASC list. (See Federal Register, 
April 21, 1987 (52 FR 13176).)
    At the time, we believed that these utilization thresholds best 
reflected the legislative objectives of moving procedures from the more 
expensive hospital inpatient setting to the less expensive ASC setting 
without encouraging the migration of procedures from the less expensive 
physician's office setting to the ASC. We applied these quantitative 
standards not only to codes proposed for addition to the ASC list, but 
also to the codes that were currently on the list, to delete codes that 
did not meet the thresholds.
    The trend towards performing surgery on an ambulatory or outpatient 
basis grew steadily, and by 1995, we discovered that a number of 
procedures that were on the ASC list at the time fell short of the 20 
percent and 50 percent thresholds even though the procedures were 
obviously appropriate in the ASC setting. The most notable of these was 
cataract extraction with intraocular lens insertion, very few cases of 
which were being performed on an inpatient basis by the early 1990s. 
The thresholds would also have excluded from the ASC list certain newer 
procedures, such as CPT code 66825, Repositioning of intraocular lens 
prosthesis, requiring an incision (separate procedure), that were 
rarely performed on a hospital inpatient basis but that were 
appropriate for the ASC setting. Strict adherence to the same 20 
percent and 50 percent thresholds both to add and remove procedures did 
not provide latitude for minor fluctuations in utilization across 
settings or errors that could occur in the

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site-of-service data drawn from the National Claims History File that 
we were then using, replacing BMAD data, for analysis.
    In an effort to avoid these anomalies but still retain a relatively 
objective standard for determining which procedures should comprise the 
ASC list, we adopted in the Federal Register notice published on 
January 26, 1995 (60 FR 5185) a modified standard for deleting 
procedures already on the list. We deleted from the list only those 
procedures whose combined inpatient, hospital outpatient, and ASC site 
of service volume was less than 46 percent of the procedure's total 
volume and that were either performed 50 percent of the time or more in 
the physician's office or 10 percent of the time or less in an 
inpatient hospital setting. We retained the 20 percent and 50 percent 
standard to determine which procedures would be appropriate additions 
to the ASC list.

D. Office of the Inspector General Recommendations, January 2003

    In January 2003, the Office of the Inspector General (OIG) issued 
the results of a study entitled ``Payments for Procedures in Outpatient 
Departments and Ambulatory Surgical Centers'' (OEI-05-00-00340). The 
objective of that study was to determine the extent to which Medicare 
payments for the same procedures continue to vary between hospital 
outpatient departments and ambulatory surgical centers and to assess 
the effect of this variance on the Medicare program.
    The OIG concluded, as a result of its study, that there should be a 
greater parity of payments for services performed in an outpatient 
setting and those performed in ASCs. The OIG based this conclusion both 
on its belief that the Congress intended Medicare to be a prudent 
purchaser of services and to pay only for those costs that are 
necessary for the efficient delivery of needed health services and on 
its finding that disparities in Medicare payment amounts for the same 
services furnished in ASCs and hospital outpatient departments resulted 
in an estimated $1.1 billion in additional Medicare program payments. 
The OIG also found that our failure to remove certain procedure codes 
from the list of ASC-approved procedures resulted in an estimated $8 to 
$14 million in additional Medicare program payments.
    The OIG recommended that we--
     Seek authority to set rates that are consistent across 
sites and reflect only the costs necessary for the efficient delivery 
of health services;
     Conduct surveys and use timely ASC survey data to 
reevaluate ASC payment rates; and
     Remove the procedure codes that meet our criteria for 
removal from the ASC list of covered procedures. (In its final report, 
the OIG included a list of 72 CPT codes that it found, based on its 
analysis of calendar year 1999 data, met our criteria for deletion from 
the ASC list.)
    In our response to the OIG's recommendations, we indicated that we 
would consider the OIG's first recommendation as we develop future 
legislative proposals. In response to the second recommendation, we 
indicated our concerns about using survey data as the basis for setting 
ASC payment rates and that we were considering how to implement the 
survey requirement. (Enactment of section 626(b) of the MMA repealing 
the survey requirement and mandating implementation of a revised 
payment system in accordance with certain requirements set forth in the 
MMA supersedes our earlier response to this OIG recommendation.)

E. Current ASC Payment Rates

    Procedures on the ASC list are assigned to one of nine payment 
groups based on our estimate of the costs incurred by the facility to 
perform a procedure. Payment groups 1 through 8 were first implemented 
in September 1990, based on a survey of ASC costs conducted in 1986 (55 
FR 4539). Payment group 9 was added on December 31, 1991 (56 FR 67666) 
to establish a payment rate for extracorporeal shockwave lithotripsy 
(ESWL). There is no clinical consistency among the procedures in a 
payment group. Rather, assignment to a payment group is based solely on 
an estimate of facility costs associated with performing the 
procedures.
    In a proposed rule published on June 12, 1998 in the Federal 
Register (63 FR 32290), we proposed a new ratesetting methodology based 
on ambulatory payment classification (APC) groups that were proposed 
for the new hospital outpatient prospective payment system (OPPS). We 
used data from a survey of ASC costs collected in 1994 as the basis for 
the APC payment rates in the June 12, 1998 proposed rule. The Balanced 
Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) required us to 
phase in full implementation of the proposed ASC rates over a 3-year 
period. The Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000 (BIPA) (Pub. L. 106-554) prohibited 
implementation of a revised prospective payment system for ASCs before 
January 1, 2002 and required that, by January 1, 2003, ASC rates be 
rebased using data from a 1999 or later Medicare survey of ASC costs.
    We discuss in the final rule published on March 28, 2003 in the 
Federal Register (68 FR 15270) the reasons why we did not implement the 
requirements set forth in BBRA and BIPA with regard to rebasing ASC 
payment rates. The March 28, 2003 final rule with comment period 
implemented additions to and deletions from the ASC list that had been 
proposed in the June 12, 1998 proposed rule, but did not implement any 
of the other proposed changes, including the proposed ratesetting 
methodology. We indicated that we were studying approaches to 
ratesetting, some of which may require legislative changes.
    Section 626(b) of MMA repeals the requirement that we conduct a 
survey of ASC costs as the basis for rebasing ASC rates and requires us 
to implement a revised payment system between January 1, 2006 and 
January 1, 2008, that takes into account recommendations in the report 
to the Congress that was to be submitted by January 1, 2005 by the 
Comptroller General of the United States. Since section 626(b)(1) 
amends section 1833(i)(2) of Act, we are required to base payment for 
ASC services on survey data before implementation of the revised 
payment system. Therefore, the additions to the ASC list in this 
interim final rule are assigned to one of the existing nine ASC payment 
groups and rates that are derived from data collected in the 1986 
survey of ASC costs, updated for inflation. The payment group for each 
addition to the ASC list in this interim final rule is based on the 
payment group to which procedures currently on the list, which our 
medical advisors judged to be similar in terms of time and resource 
inputs, are assigned. As of April 1, 2004, in accordance with the 
requirements in section 626(a) of MMA and instructions that we issued 
to our contractors who process ASC claims in Transmittal 51, Change 
Request 3082, on February 6, 2004, the ASC payment rates are the 
following:

Group 1...........................  $333
Group 2...........................  $446
Group 3...........................  $510
Group 4...........................  $630
Group 5...........................  $717
Group 6...........................  $826 ($676 plus $150 for IOL)
Group 7...........................  $995
Group 8...........................  $973 ($823 plus $150 for IOL)
Group 9...........................  $1339
 


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F. Summary of the Provisions of the Proposed Rule

    In the November 26, 2004 proposed rule, we proposed to delete 54 
procedures from the ASC list based on the OIG recommendations. An 
additional 46 deletions were proposed based on data that indicated that 
either the physician office or the inpatient setting was the 
predominant site of service or based on recommendations from specialty 
organizations that there were beneficiary safety concerns associated 
with furnishing the procedure(s) in the ASC.
    We also proposed to add to the list 25 procedures that were 
recommended by commenters and other interested parties.

II. Analysis of and Responses to Public Comments Received on the 
November 26, 2004 Proposed Rule and Provisions of This Interim Final 
Rule With Comment Period

    [If you choose to comment on issues in this section, please include 
the caption ``ANALYSIS OF AND RESPONSES TO PUBLIC COMMENTS RECEIVED ON 
THE NOVEMBER 26, 2004 PROPOSED RULE AND PROVISIONS OF THIS INTERIM 
FINAL RULE WITH COMMENT PERIOD'' at the beginning of your comments.]

A. General Comments

    Summaries of the public comments and our responses to those 
comments are set forth in the various sections of this preamble under 
the appropriate headings.
    We received a number of general public comments on our proposed 
changes to the ASC list.
    Comment: The comments we received expressed opposition to our 
proposed deletions. Although we received many comments requesting that 
we not delete specific procedures, we also received many from 
individual physicians, ASCs, professional and trade associations, and 
medical societies and organizations expressing their belief that our 
proposed deletion of 100 procedures from the ASC list was misguided. 
The overwhelming response from the public was that there are many 
beneficiaries for whom the ASC setting is the safest and most 
appropriate setting for a number of surgical procedures. The commenters 
were especially concerned about our proposals to delete procedures 
based on either the OIG recommendations or high physician office 
utilization.
    They stated that there were several detrimental effects that would 
likely result from deletion of the codes as proposed. They believe that 
deleting the procedures will result in beneficiaries' decreased access 
to the most appropriate care, increased costs for the Medicare program 
and for beneficiaries because the procedures will have to be furnished 
in the more costly hospital outpatient department if the ASC is not an 
option, and creation of incentives to perform procedures in 
inappropriate settings.
    Response: As will be discussed in more detail in other sections of 
this interim final rule, we recognize the validity of the arguments and 
clinical evidence that was provided to us by commenters. As a result, 
we will delete fewer procedures from the ASC list than we proposed.
    Comment: We also received a number of comments that expressed 
disappointment that we have not adopted new criteria for determining 
which procedures are to be included on the ASC list. The commenters 
stated that the current criteria are obsolete and are in need of 
updating to account for new clinical practices and technological 
advances. Furthermore, many commenters objected to having an ASC list 
of procedures. They believe that we should adopt an exclusionary list 
instead.
    Response: We are embarking on development of a new payment system 
as mandated by section 626 of the MMA. As part of that process, we will 
review the criteria for determining which procedures are eligible for 
inclusion on the ASC list.
    Comment: We received several comments that expressed doubt about 
our proposals for ASC list additions and deletions based on 
reimbursement. The commenters believe that we are overstepping our 
authority in considering payment levels before we add codes to the ASC 
list. Specifically, they use as an example our decision to exclude from 
the ASC list procedures that would be paid significantly more by 
Medicare under the ASC payment system than they are currently being 
paid under the hospital outpatient prospective system.
    Response: As discussed in our March 28, 2003 final rule (68 FR 
15270), we do not add procedures to the lowest ASC payment group that 
would be paid significantly more in an ASC than the same procedure is 
paid in the hospital outpatient department. We believe that our process 
is consistent with the law and its intent. The legislative history of 
section 934 of the Omnibus Reconciliation Act of 1980 (Pub. L. 96-499), 
which created the ASC benefit, indicates congressional intent to 
encourage performance of surgery in lower cost settings. Thus, we 
believe it is antithetical to the statutory mandate to create 
incentives which could shift those procedures to an ASC setting for 
increased Medicare payment. Similarly, we try not to add procedures to 
the list that would be significantly underpaid in the highest ASC 
payment group.
    In the June 1998 proposed rule, we proposed the addition of CPT 
code 50590, Extracorporeal shock wave lithotripsy to what would have 
been the highest payment group. The American Lithotripsy Society 
disagreed with the addition payment rate and, through litigation, 
avoided that addition. We now are embarking on development of a new 
payment system for ASCs, and so are not adopting any revisions to our 
rate-setting method before that development. At this time, we are 
updating the list of procedures on the ASC list, and it is beyond the 
scope of this rule to create payment groups that would provide payments 
closer to the costs of procedures that are either much more costly or 
much less costly than the existing highest and lowest ASC payment 
group.
    In the November 26, 2004 ASC proposed rule, we proposed to delete 
100 procedures from the ASC list, most of which were being performed in 
the office setting in more than half the number of cases. We also 
proposed to add 25 new procedures to the ASC list. Comments on the 
proposed rule indicate that the ASC cases for codes proposed for 
deletion from the ASC list will migrate to the outpatient hospital 
setting rather than to the physician office setting because the 
procedures performed in ASCs involve patients who need anesthesia, or 
who have significant comorbidities or anatomic abnormalities, or who 
require a sterile operating room.
    Based in part on the convincing arguments and clinical evidence 
submitted by commenters, we are deleting only five procedures from the 
ASC list out of the original 100 procedures that we proposed to delete. 
We have noted minimal shifts among ambulatory sites of service over the 
past decade even though most of the codes that we proposed to delete 
have been on the ASC list throughout that period. In other words, the 
availability of these procedures in ASCs has not induced substantial 
shifts in the site of service. We are also adding 67 procedures to the 
ASC list, based on commenters' recommendations.
    Over the past several years, the number of small, physician-owned 
specialty hospitals specializing in surgical and orthopedic services 
has grown rapidly. We have investigated this set of hospitals as part 
of our

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research in support of a report to the Congress mandated by section 
507(c) of the MMA. Among other findings, we discovered that the 
surgical and orthopedic hospitals that billed the program in 2003 had 
an average daily census of 4.5. The predominant services in these 
hospitals appeared to be outpatient services rather than inpatient 
services. We speculate that physicians may be participating in the 
ownership of small hospitals rather than ASCs partly in order to take 
advantage of payment differences: Under Medicare's current payment 
systems, outpatient services in many instances receive higher payments 
under the outpatient prospective payment system than under the ASC fee 
schedule.
    Section 626 of the MMA requires and sets parameters for a revision 
to the ASC fee schedule. The existing fee schedule is comparatively 
crude, with only nine payment rates used for approximately 2500 
different surgical procedures. Consequently, each payment cell spans a 
broad set of clinically heterogeneous services. In addition, the basic 
structure of rates has not been updated since 1990. This combination of 
factors has resulted, among other things, in incentives to perform 
procedures in a hospital outpatient setting rather than an ASC, or the 
converse, when payment rates for particular procedures diverge 
significantly from the resources consumed in connection with the 
procedures. Reforming the ASC fee schedule can materially reduce these 
divergences and mitigate inappropriate incentives from this quarter 
that favor proliferation of specialty hospitals.
    The MMA requires that the new payment system be implemented after 
December 2005 and not later than 2008. GAO has prepared and is about to 
conduct a survey to determine the relative costs associated with 
procedures performed in ASCs as part of a report to Congress required 
under the MMA. We are to take into account the recommendations 
contained in the GAO report. Given the need to collect and analyze data 
and to complete full notice-and-comment rulemaking, we plan to 
implement the ASC payment reform January 1, 2008. Flowing from the MMA 
requirement that the GAO compare the relative costs of procedures 
furnished in ASCs to the relative costs of procedures furnished in 
hospital outpatient departments, we are exploring relating the ASC fee 
schedule to the outpatient prospective payment system, using the same 
or very similar ambulatory payment classifications. Linking the two 
systems could provide a mechanism for automatic updates of weights in 
the ASC system and reduce divergences between the two payments to an 
average percentage value.

B. Proposed Deletions

    In accordance with the statutory requirement that we review and 
update the ASC list at least every 2 years, we, in consultation with 
our medical advisors, reviewed the current ASC list against the 
criteria. In this review, we also considered deletions recommended by 
medical specialty societies and other commenters. Further, we reviewed 
the codes that the OIG recommended for deletion from the ASC list. In 
most cases, our medical advisors agreed that the procedures recommended 
by the OIG for deletion no longer met the criteria for ASC procedures, 
and we proposed to delete most of them from the ASC list. We removed 
the following seven procedures recommended for deletion by the OIG from 
the ASC list: CPT codes 21920, 42104, 51725, 56405, 56605, 62367, and 
62368.
    However, there were 11 procedures the OIG recommended for deletion 
that our medical advisors determined, for health and safety reasons, 
should be retained on the list:

   Table 1.--Procedures OIG Recommended for Deletion Not Proposed for
                                Deletion
------------------------------------------------------------------------
             CPT code                         Short descriptor
------------------------------------------------------------------------
30802.............................  Cauterization, inner nose.
31525.............................  Diagnostic laryngoscopy.
31570.............................  Laryngoscopy with injection.
45305.............................  Proctosigmoidoscopy w/bx.
46050.............................  Incision of anal abscess.
51710.............................  Change of bladder tube.
51726.............................  Complex cystometrogram.
51772.............................  Urethra pressure profile.
52285.............................  Cystoscopy and treatment.
67031.............................  Laser surgery, eye strands.
67921.............................  Repair eyelid defect.
------------------------------------------------------------------------

    We received no comments about this proposal, and we are making 
final our proposal to retain these procedures on the ASC list.
    Based on our review of other procedures on the ASC list, we 
proposed to delete from the ASC list those listed in Table 2, for the 
reasons specified.
    Rationale for deletion is indicated as follows:
    1. Procedure is performed in physician's office more than 50 
percent of the time.
    2. Medical specialty organizations recommended deletion because of 
safety concerns.
    3. Procedure is performed predominantly in the inpatient setting.
    4. OIG recommended for deletion and CMS medical advisors concur.

             Table 2.--Proposed Deletions From the ASC List
------------------------------------------------------------------------
           CPT code                 Short descriptor         Rationale
------------------------------------------------------------------------
11404.........................  Removal of skin lesion..               4
11424.........................  Removal of skin lesion..               4
11444.........................  Removal of skin lesion..               4
11446.........................  Removal of skin lesion..               4
11604.........................  Removal of skin lesion..               4
11624.........................  Removal of skin lesion..               4
11644.........................  Removal of skin lesion..               4
12021.........................  Closure of split wound..               4
13100.........................  Repair of wound or                     4
                                 lesion.
13101.........................  Repair of wound or                     4
                                 lesion.
13120.........................  Repair of wound or                     4
                                 lesion.
13121.........................  Repair of wound or                     4
                                 lesion.
13131.........................  Repair of wound or                     4
                                 lesion.
13132.........................  Repair of wound or                     4
                                 lesion.
13150.........................  Repair of wound or                     4
                                 lesion.
13151.........................  Repair of wound or                     4
                                 lesion.
13152.........................  Repair of wound or                     4
                                 lesion.
14000.........................  Skin tissue                            4
                                 rearrangement.
14020.........................  Skin tissue                            4
                                 rearrangement.
14021.........................  Skin tissue                            4
                                 rearrangement.

[[Page 23695]]

 
14040.........................  Skin tissue                            4
                                 rearrangement.
14041.........................  Skin tissue                            4
                                 rearrangement.
14060.........................  Skin tissue                            4
                                 rearrangement.
14061.........................  Skin tissue                            4
                                 rearrangement.
15732.........................  Muscle-skin graft, head/               2
                                 neck.
15734.........................  Muscle-skin graft, trunk               2
15738.........................  Muscle-skin graft, leg..               2
15740.........................  Island pedicle flap                    4
                                 graft.
19100.........................  Bx breast percut w/o                   4
                                 image.
20670.........................  Removal of support                     4
                                 implant.
21040.........................  Removal of jaw bone                    1
                                 lesion.
21050.........................  Removal of jaw joint....               2
21206.........................  Reconstruct upper jaw                  1
                                 bone.
21210.........................  Face bone graft.........               1
21249.........................  Reconstruction of jaw...               1
21325.........................  Treatment of nose                      1
                                 fracture.
21355.........................  Treat cheek bone                       1
                                 fracture.
21440.........................  Treat dental ridge                     1
                                 fracture.
21485.........................  Reset dislocated jaw....               1
22305.........................  Treat spine process                    4
                                 fracture.
23600.........................  Treat humerus fracture..               4
23620.........................  Treat humerus fracture..               4
24576.........................  Treat humerus fracture..               1
24670.........................  Treat ulnar fracture....               4
25505.........................  Treat fracture of radius               1
26605.........................  Treat metacarpal                       4
                                 fracture.
27520.........................  Treat kneecap fracture..               4
27760.........................  Treatment of ankle                     4
                                 fracture.
27780.........................  Treatment of fibula                    4
                                 fracture.
27786.........................  Treatment of ankle                     4
                                 fracture.
27808.........................  Treatment of ankle                     4
                                 fracture.
28400.........................  Treatment of heel                      4
                                 fracture.
30801.........................  Cauterization, inner                   4
                                 nose.
30915.........................  Ligation, nasal sinus                  2
                                 artery.
30920.........................  Ligation, upper jaw                    2
                                 artery.
31233.........................  Nasal/sinus endoscopy,                 4
                                 dx.
31235.........................  Nasal/sinus endoscopy,                 4
                                 dx.
31237.........................  Nasal/sinus endoscopy,                 4
                                 surg.
31238.........................  Nasal/sinus endoscopy,                 4
                                 surg.
38505.........................  Needle biopsy, lymph                   4
                                 nodes.
40700.........................  Repair cleft lip/nasal..               2
40701.........................  Repair cleft lip/nasal..               2
40814.........................  Excise/repair mouth                    4
                                 lesion.
41009.........................  Drainage of mouth lesion               1
41010.........................  Incision of tongue fold.               1
41112.........................  Excision of tongue                     4
                                 lesion.
41520.........................  Reconstruction, tongue                 1
                                 fold.
41800.........................  Drainage of gum lesion..               1
41827.........................  Excision of gum lesion..               1
42000.........................  Drainage mouth roof                    1
                                 lesion.
42107.........................  Excision lesion, mouth                 1
                                 roof.
42200.........................  Reconstruct cleft palate               2
42205.........................  Reconstruct cleft palate               2
42210.........................  Reconstruct cleft palate               2
42215.........................  Reconstruct cleft palate               2
42220.........................  Reconstruct cleft palate               2
42409.........................  Drainage of salivary                   1
                                 cyst.
42425.........................  Excise parotid gland/                  3
                                 lesion.
42860.........................  Excision of tonsil tags.               1
42892.........................  Revision pharyngeal                    3
                                 walls.
52000.........................  Cystoscopy..............               4
52281.........................  Cystoscopy and treatment               4
53850.........................  Prostatic microwave                    1
                                 thermotx.
55700.........................  Biopsy of prostate......               4
58820.........................  Drain ovary abscess,                   3
                                 open.
60000.........................  Drain thyroid/tongue                   1
                                 cyst.
64420.........................  N block inj, intercost,                4
                                 sng.
64430.........................  N block inj, pudendal...               1
64736.........................  Incision of chin nerve..               1
65800.........................  Drainage of eye.........               1
65805.........................  Drainage of eye.........               4
67141.........................  Treatment of retina.....               4

[[Page 23696]]

 
68340.........................  Separate eyelid                        1
                                 adhesions.
68810.........................  Probe nasolacrimal duct.               4
69145.........................  Remove ear canal                       4
                                 lesion(s).
69450.........................  Eardrum revision........               2
69725.........................  Release facial nerve....               1
69740.........................  Repair facial nerve.....               2
69745.........................  Repair facial nerve.....               2
69840.........................  Revise inner ear window.               1
------------------------------------------------------------------------

    As displayed in Table 2, among the codes we proposed to delete from 
the ASC list were CPT codes 52000, Cystourethroscopy, 52281, 
Cystourethroscopy, with calibration and/or dilation of urethral 
stricture or stenosis, with or without meatotomy, with or without 
injection procedure for cystography, and 55700, Biopsy, prostate; 
needle or punch, single or multiple, any approach. We proposed deletion 
of these codes from the list in response to the recommendations of the 
OIG. The study recommended that Medicare be a prudent purchaser of 
services and only pay for those that are necessary for the efficient 
delivery of needed health services. The OIG found that discrepancies in 
the payment amounts between services furnished in the ASC and in the 
hospital outpatient setting resulted in additional and unnecessary 
program payments. The OIG also asserted that retention of these codes 
was inconsistent with our criteria for procedures that are 
appropriately performed in an ASC. Based on their study findings, the 
OIG recommended that procedures be removed from the ASC list with the 
expectation that those deleted services would then be furnished in the 
physician office setting at a lower cost to Medicare.
    These procedures have been on the list of Medicare-approved ASC 
procedures since its inception. However, in our review of the 
procedures on the ASC list for the biennial update, we found that the 
codes did not satisfy our criteria for inclusion on the list and, in 
addition, the OIG's report recommendation made it clear that we should 
propose removal of the procedures.
    Comment: We received several hundred comments from the public 
opposing the deletion of these three codes. The commenters provided a 
number of arguments for retaining the codes on the ASC list. They 
asserted that there are circumstances when clinically compelling 
reasons require that these procedures be performed in a facility 
setting rather than in the physician office. Examples of those 
circumstances include the need for general anesthesia and the need for 
access to more highly qualified staff and a full spectrum of emergency 
equipment for patients with various comorbidities. Many Medicare 
beneficiaries have diabetes, prior myocardial infarctions, renal 
insufficiency or urological malignancies, any of which may indicate 
performance of the procedure in a facility setting.
    The commenters also questioned our estimated cost savings as a 
result of the deletions. They stated that the procedures would not 
shift from the ASC to the physician office as assumed by the OIG, but 
would instead shift to the hospital outpatient department in most 
cases. Further, they asserted that deletion of the codes from the ASC 
list will impose a barrier to access for those beneficiaries with 
limited access to a hospital outpatient facility. They asserted that 
the deletion of these codes would actually result in additional costs 
for the Medicare program.
    Response: We have considered the comments and conclude that CPT 
codes 52000, 52281, and 55700 should be retained on the ASC list. We 
find the clinical arguments contained in the comments to be compelling, 
and we believe that protecting patient safety and access to appropriate 
care is our primary responsibility.
    We examined Medicare site of service data for the past 10 years and 
found that the pattern for the site of service for the procedures 
generally was stable. Consistently, the physician office is the 
predominant service setting even though the procedures were included on 
the ASC list. As exhibited in Table 3 below, in 1992, 70 percent of 
cystourethroscopies (52,000) were furnished in the physician office, 
17.5 percent in the outpatient department and 3.3 percent in the ASC. 
The change in distribution across sites of service for this procedure 
from 1992 through 2003 is minimal. Generally, the data show a trend of 
decreasing volume in the hospital outpatient department accompanied by 
an increased volume in the physician office. With the exception of CY 
2000, volume in the ASC setting has remained significantly less than 10 
percent of the total cases.

                                        Table 3.--Site of Service for Cystourethroscopies (CPT 52000), 1992-2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Percent                         Percent                         Percent
                  Year                        Office          (total)           OPD           (total)           ASC           (total)          Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1992....................................         563,548            70.0         140,805            17.5          26,369             3.3         804,683
1995....................................         581,672            72.1         133,024            16.5          41,990             5.2         807,302
2000....................................         618,984            74.1         102,109            12.2          79,116             9.5         835,669
2003....................................         725,000            80.1          92,981            10.3          55,543             6.1         904,860
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We found similar patterns in the Medicare site of service data for 
the other two high volume urology procedures, CPT codes 52281 and 
55700, that we proposed to delete. We believe that the relative 
stability of the utilization and site of service is evidence that the 
inclusion of the codes on the ASC list has not influenced the 
physician's selection of setting for performance of the procedures and 
provides strong evidence that there is a small but consistent 
population of beneficiaries for whom the ASC setting is the most 
appropriate for these procedures.
    In light of the evidence presented to us in the comments, we agree 
with

[[Page 23697]]

commenters that these procedures should be retained on the ASC list in 
spite of the high percentage of cases performed in the physician office 
setting. Moreover, in light of our plans to develop and implement a new 
payment system for ASCs by 2008 and our expectation that the criteria 
for inclusion on the ASC list will be reviewed as part of developing 
the new payment system, we believe that deleting these codes at this 
time could cause undue confusion and hardship for many beneficiaries.
    If we accept the commenters' assertions that many of the procedures 
currently furnished in the ASC must be performed in a facility setting, 
as we have, we must reconsider the cost savings estimates that we 
assumed when we proposed deletion of these codes. If a significant 
portion of the procedures will migrate to the hospital outpatient 
department rather than to the physician office, then we may have 
diminished cost saving estimates compared to those included in our 
proposed rule, with resultant increased payment by the Medicare program 
rather than savings. See section IV of this interim final rule for a 
full discussion of cost savings estimates.
    Comment: In addition to the comments requesting that we not delete 
the three procedures, CPT codes 52000, 52281, and 55700, we received 
about 100 comments requesting that we not delete CPT codes 11404 
through 15740, as listed in Table 2. These commenters made many of the 
same points discussed above regarding deletion of this range of 
procedure codes. The same concerns regarding patient safety and access 
to appropriate care were consistently raised.
    The commenters presented equally compelling clinical arguments 
opposing deletion of these procedures. They assert that it is often 
difficult to schedule these non-emergent procedures in outpatient 
departments but that the need for sterile conditions for the procedures 
requires a facility setting rather than the physician office. Many 
patients require heavy sedation or general anesthesia because of the 
delicate nature of many of the procedures, and need a facility setting 
due to Medicare patient comorbidities. Further, commenters cited a 
number of CPT coding definitions that make it impossible to identify 
important information about specific procedures that are performed. 
That is, one code describes a number of different procedures, some of 
which are significantly more complex than others reported using the 
same CPT code. For example, CPT code 31233, Nasal/sinus endoscopy, 
diagnostic with maxillary sinusoscopy (via inferior meatus or canine 
fossa puncture), describes a procedure that may be accomplished by 
either of two distinct approaches, one of which may require no 
anesthesia while the other (requiring insertion of a trochar through 
the roof of the patient's mouth) does require sedation in a facility 
setting.
    Further, they assert that the deletion of the codes as proposed 
will not result in cost savings for the Medicare program but will 
result in diminished beneficiary access to appropriate care and to cost 
increases because the cases currently performed in the ASC will shift 
to hospital outpatient departments.
    Response: We find the commenters' arguments convincing. We examined 
the site of service for these procedures over the past 5 years, and, as 
was the case for the urology codes, we found that the patterns for 
provision of these services were generally unchanged during that time. 
In light of the clinical evidence presented in the comments and our 
finding that the percent of procedures that are being performed in the 
ASC today is no greater than it was in 1999, we conclude that these 
procedures should be retained on the ASC list, and we will not make 
final our proposal to delete them.
    Further, we believe that the estimated cost savings included in the 
proposed rule may have been over-stated. Therefore, we performed cost 
analyses using predicted site of service distribution changes that we 
believe are more realistic than those we used in the proposed rule. A 
full discussion of the cost estimates is presented in section V of this 
rule.
    Comment: We received comments opposing the deletion of almost every 
procedure we proposed to delete in the proposed rule. The reasons 
provided were generally the same as those presented by the commenters 
regarding the urology and skin codes discussed above: that there is a 
portion of the Medicare patient population who, due to clinical 
characteristics or due to limitations on access, is best served by 
having access to these procedures in an ASC.
    Response: We have examined the comments, the site of service data, 
and the list of proposed deletions, and we have decided that the 
evidence supplied by the commenters regarding the three urology 
procedures and the skin procedures, combined with the impending 
implementation of a new payment system in 2008 argue against making 
major changes in the ASC list at this time. Maintaining a degree of 
stability in the ASC list until the new payment system is implemented 
will minimize the risk of limiting beneficiary access to needed 
services as well as unintended incentives that could result in 
significant shifts of procedures to the generally more costly hospital 
outpatient setting.
    Therefore, we will delete only the five codes about which we 
received no comments. CPT codes 21440, 23600, and 23620 are all 
procedures that are performed in the office setting more than half of 
the time. CPT code 69725 is performed as an inpatient procedure 100 
percent of the time. The resources required to perform CPT code 53850 
significantly exceed the highest ASC payment group. Therefore, we are 
making final our proposal to delete the five codes listed in Table 4.

         Table 4.--Final List of Codes Deleted From the ASC List
------------------------------------------------------------------------
             CPT code                            Descriptor
------------------------------------------------------------------------
21440.............................  Treat dental ridge fracture.
23600.............................  Treat humerus fracture.
23620.............................  Treat humerus fracture.
53850.............................  Prostatic microwave thermotx.
69725.............................  Release facial nerve.
------------------------------------------------------------------------

C. Proposed Additions

1. Additions Recommended by Commenters and Other Interested Parties
    In response to public comments and our medical staff review, we 
proposed to add the procedures displayed in Table 5 to the list of 
Medicare-approved ASC procedures.

    Table 5.--Proposed Additions Recommended by Commenters and Other
                           Interested Parties
------------------------------------------------------------------------
                                                             Proposed
          HCPCS code                Short descriptor      payment  group
------------------------------------------------------------------------
15001.........................  Skin graft add-on.......               1
15836.........................  Excise excessive skin                  3
                                 tissue.

[[Page 23698]]

 
15839.........................  Excise excessive skin                  3
                                 tissue.
21120.........................  Reconstruction of chin..               7
21125.........................  Augmentation, lower jaw                7
                                 bone.
29873.........................  Knee arthroscopy/surgery               3
30220.........................  Insert nasal septal                    3
                                 button.
31500.........................  Insert emergency airway.               1
31603.........................  Incision of windpipe....               1
35475.........................  Repair arterial blockage               9
35476.........................  Repair venous blockage..               9
36834.........................  Repair AV aneurysm......               3
37205.........................  Transcatheter stent.....               9
37206.........................  Transcatheter stent add-               9
                                 on.
37500.........................  Endoscopy ligate perf                  3
                                 veins.
42665.........................  Ligation of salivary                   7
                                 duct.
44397.........................  Colonoscopy w/stent.....               1
45327.........................  Proctosigmoidoscopy w/                 1
                                 stent.
45341.........................  Sigmoidoscopy w/                       1
                                 ultrasound.
45342.........................  Sigmoidoscopy w/us guide               1
                                 bx.
45345.........................  Sigmoidoscopy w/stent...               1
45387.........................  Colonoscopy w/stent.....               1
57288.........................  Repair bladder defect...               5
62264.........................  Epidural lysis on single               1
                                 day.
67343.........................  Release eye tissue......               7
------------------------------------------------------------------------

    Comment: We received many comments in support of the proposed 
additions to the ASC list. However, we received one comment that 
opposed the additions of CPT codes 37205, 37206, 35475, and 35476. The 
commenter stated that these procedures were not appropriate for the ASC 
setting and would allow for potential substandard care.
    Response: Our medical staff's reconsideration of these procedures 
led to our decision not to add them to the ASC list. The procedures 
involve major vessels and therefore do not meet our criteria for 
inclusion on the ASC list.
    CPT code 31500, Insert emergency airway, also will be removed from 
the list of additions to be made final. We will not add this procedure 
to the ASC list because it would be significantly overpaid even in the 
lowest ASC payment group. As discussed in our March 2003, final rule 
(68 FR 15270), our policy is not to add procedures for which 
significant overpayments would result.
    However, we will make final our proposal to add the other codes in 
Table 5. The final list of all procedures to be added to the ASC list 
is in section II, Table 7.
    Comment: We also received a number of comments requesting higher 
payment levels than those proposed for some of the codes. Table 6 
provides a summary display of the procedure codes and the proposed 
payment group assignments and the commenter-requested payment group 
assignments for the codes for which a specific group was identified. 
For several procedures, there was variation among commenters regarding 
payment group requests and so more than one payment group is 
identified.

                   Table 6.--Payment Group Assignments Proposed and As Requested by Commenters
----------------------------------------------------------------------------------------------------------------
                                                                                   NPRM  payment     Requested
                HCPCS code                            Short descriptor                 group      payment  group
----------------------------------------------------------------------------------------------------------------
15836.....................................  Excise excessive skin tissue........               3               5
15839.....................................  Excise excessive skin tissue........               3               5
29873.....................................  Knee arthroscopy/surgery............               3               4
37500.....................................  Endoscopy ligate perf veins.........               3             N/A
44397.....................................  Colonoscopy w/stent.................               1               3
45327.....................................  Proctosigmoidoscopy w/stent.........               1               3
45341.....................................  Sigmoidoscopy w/ultrasound..........               1        2, 3 & 9
45342.....................................  Sigmoidoscopy w/us guide bx.........               1        2, 3 & 9
45345.....................................  Sigmoidoscopy w/stent...............               1        2, 3 & 9
45387.....................................  Colonoscopy w/stent.................               1               3
57288.....................................  Repair bladder defect...............               1               9
62264.....................................  Epidural lysis on single day........               1             N/A
----------------------------------------------------------------------------------------------------------------

    Response: We considered each of these requests and believe that the 
payment groups that we proposed are appropriate. In making the proposed 
assignments, we considered the assignments of codes already on the ASC 
list that the proposed additions most closely resembled in terms of 
clinical work and resource inputs such as equipment, supplies, and time 
required in the operating suite. To the extent possible, we assigned 
the

[[Page 23699]]

additions to the list to the same payment groups to which comparable 
procedures are currently assigned. We will make no changes at this time 
and will make final the payment groups as proposed.

D. Procedures Requested for Addition in Comments

    We also received a large number of comments requesting that we add 
procedures to the ASC list in addition to those we proposed to add in 
the November 26, 2004 proposed rule. Following is a discussion of each 
of those requests.
    Comment: We received a comment requesting that we add CPT codes 
10061, Incision and drainage of abscess, complicated or multiple, and 
10081, Incision and drainage of pilonidal cyst, complicated, to the 
Medicare list of procedures covered in the ASC.
    Response: We reviewed the site of service data for these procedures 
and discussed the request with our medical staff. CPT codes 10061 and 
10081 are performed most of the time in the physician office, and we 
believe that they are most appropriately performed there and do not 
believe that they are procedures that should be added to the ASC list.
    Comment: Several commenters requested that we add CPT code 61795 
(stereotactic computer assisted volumetric (navigational) procedure). 
The commenters stated that this procedure is reported with other 
procedures on the list and is already reimbursed by most commercial 
payors in most settings, including ASCs. They stated that Medicare also 
reimburses this technology in both the inpatient and outpatient setting 
and that it is appropriate for an ASC.
    Response: CPT code 61795 is for coding the use of equipment, is not 
a surgical procedure, and is therefore, not an appropriate addition to 
the ASC list. We will not add this to the ASC list of covered 
procedures.
    Comment: Many commenters requested that we add CPT code 30220 
(insertion, nasal septal prosthesis) to the ASC list. They stated that 
it was clinically appropriate for the ASC setting.
    Response: This procedure meets our criteria for inclusion on the 
ASC list. We agree that it is appropriate for the ASC list and are 
adding this procedure to payment group 3.
    Comment: We received a request to add CPT code 31040 
(pterygomaxillary fossa surgery). The commenters stated that it is 
clinically similar to CPT code 30920, Ligation arteries: internal 
maxillary artery transantral, a procedure already on the list and meets 
our criteria for inclusion on the ASC list.
    Response: Our medical staff do not agree that these two codes are 
comparable. CPT code 30920 is furnished as an inpatient procedure 61 
percent of the time and was proposed for deletion from the list in the 
November 26, 2004 proposed rule. CPT code 31040 is predominantly an 
office procedure (66 percent of the time). We do not believe that CPT 
code 31040 is an appropriate addition to the ASC list at this time.
    Comment: Many commenters requested that we add CPT code 31545 
(Laryngoscopy, direct, operative, w/operating microscope or telescope, 
w/submucosal removal of non-neoplastic lesion of vocal cord, 
reconstruction local tissue flap); and CPT code 31546 (Laryngoscopy, 
direct, operative, w/operating microscope or telescope, w/ submucosal 
removal of non-neoplastic lesion of vocal cord, reconstruction with 
graft (incl. obtaining autograft)). They stated that these procedures 
are clinically similar to the procedures in the CPT codes 31615 through 
31656 range, many of which are currently on the list.
    Response: Our medical staff agrees that CPT codes 31545 and 31546 
are clinically similar to some endoscopic lesion removal and skin flap 
or grafting procedures that are already on the list. We are adding both 
of these procedures to the ASC list in payment group 4.
    Comment: We received a few requests to add CPT code 40812 (Excision 
of lesion of mucosa and submucosa, vestibule of mouth; with simple 
repair).
    Response: We are not adding the procedure to the ASC list. This is 
primarily an office procedure. Data show that the procedure does not 
meet our criteria for office volume percentage and does not typically 
require the resources of a facility setting. For the small percentage 
of times that a facility setting is warranted, the procedure could be 
furnished in the hospital outpatient department.
    Comment: A few commenters requested that we add CPT codes 42842 
(Radical resection, tonsil, tonsillar pillars, &/or retromolar trigone; 
w/o closure); and 42844 (Radical resection, tonsil, tonsillar pillars, 
&/or retromolar trigone; closure w/loca). The commenters stated that 
these procedures meet our criteria and are appropriate for an ASC.
    Response: Clinically, these procedures typically require the 
resources of the hospital inpatient setting. While these procedures are 
also performed on an outpatient basis, the risks of complication 
require the ability to initiate an immediate inpatient response making 
these procedures inappropriate in the ASC setting.
    Comment: We received several comments requesting that we add CPT 
code 43761, Repositioning of the gastric feeding tube, any method, 
through the duodenum for enteric nutrition, to the Medicare ASC list. 
The commenters believe that the addition is warranted in order to 
provide more latitude to physicians and patients to choose the site of 
service for performance of this procedure.
    Response: This procedure is most often performed in the inpatient 
hospital setting, and our medical staff do not believe that CPT code 
43761 is an appropriate procedure for the ASC setting.
    Comment: Several commenters requested that the following eight CPT 
codes be added to the Medicare ASC list.
     45300 Proctosigmoidoscopy, rigid; diagnostic, with or 
without collection of specimen(s) by brushing or washing
     45303 Proctosigmoidoscopy, rigid; diagnostic, with 
dilation (for example, balloon, guide wire, bougie)
     45330 Sigmoidoscopy, flexible; diagnostic, with or without 
collection of specimen(s) by brushing or washing
     46604 Anoscopy, diagnostic, with or without collection of 
specimen(s) by brushing or washing, with dilation (for example, 
balloon, guide wire, bougie)
     46614 Anoscopy, diagnostic, with or without collection of 
specimen(s) by brushing or washing, with control bleeding (for example, 
injection, bipolar cautery, unipolar cautery, laser, heater probe)
     46900 Destruction of lesion(s), anus, simple; chemical
     46910 Destruction of lesion(s), anus, simple; 
electrodesiccation
     46916 Destruction of lesion(s), anus, simple; cryosurgery
    The commenter believes the codes should be added to the ASC list to 
afford more latitude to patients and physicians with regard to choice 
of site of service. They point out that although these procedures are 
usually performed in the physician office, there are circumstances 
under which a facility environment that is sterile and in which 
administration of general anesthesia is safe, is required. They believe 
that the ASC should be one of the options available.
    Response: With the exception of CPT code 45303, all of these 
procedures are performed in the physician office more that half of the 
time, and we do not believe that adding them to the ASC list is 
appropriate.

[[Page 23700]]

    Comment: We received a number of comments requesting that we add 
CPT codes 47562, Laparoscopic cholecystectomy; 47563, Laparoscopic 
cholecystectomy with cholangiography; and 47564, Laparoscopic 
cholecystectomy with exploration of the common bile duct. The 
commenters believe that these procedures qualify for performance in the 
ASC setting because the procedures usually take less than 60 minutes 
and the recovery time is usually less than 2 hours. The commenters say 
that laparoscopic cholecystectomies are substantially similar to 
laparoscopic cholangiograpy (CPT codes 47561 and 47562), that are on 
the ASC procedure list.
    Response: After consultation with our medical staff, we decided 
that laparoscopic cholecystectomies are not appropriate for addition to 
the Medicare list of procedures for performance in an ASC. There is a 
substantial risk that the laparoscopic approach will not be successful 
and that an open procedure will have to be performed instead. If an 
open procedure is required, the patient will have to be transported to 
a hospital for the procedure and subsequent hospital admission. The 
potential jeopardy to the beneficiary resulting from undergoing an 
emergency transfer is significant and far outweighs any benefit of 
covering these procedures in ASCs. For this reason we believe that 
laparoscopic cholecystectomies should continue to be performed in a 
hospital setting (either inpatient or outpatient) as is the current 
practice.
    Comment: We received several comments requesting that we add CPT 
codes 46221, Hemorrhoidectomy, by simple ligature; 46946, Ligation of 
internal hemorrhoids, multiple procedures; and 46947, Hemorrhoidopexy 
by stapling, to the Medicare list of ASC procedures. The commenters 
stated that these procedures are commonly performed on non-Medicare 
beneficiaries in the ASC setting. Further, they write that, although 
the procedures often are performed in the physician office setting, 
there are circumstances under which a facility setting is warranted. 
For example, for patients with certain comorbidities, it may be best to 
perform the surgery in a setting where anesthesia can be safely 
administered and emergency response capabilities are available and so 
should be performed in a facility. The physician and patient should 
have more latitude to make site of service determinations.
    Response: The most common site of service for hemorrhoidectomy by 
simple ligature (CPT code 46221) and ligation of internal hemorrhoids 
(CPT code 46946) is the physician office, and we do not believe that 
there is a clinical basis for adding either of these codes to the ASC 
list. Hemorrhoidopexy by stapling is a new procedure for 2005, and our 
medical staff believe that the procedure is of a complexity 
substantially similar to other procedures (for example, CPT code 46257, 
hemorrhoidectomy, internal and external, with fissurectomy) assigned to 
payment group 3, and so we will add CPT code 46947 to the ASC list and 
will assign it to payment group 3.
    Comment: We received a comment requesting that we add CPT codes 
45391, Colonoscopy with endoscopic ultrasound guidance; and 45392, 
Colonoscopy with transendoscopic U.S. guided intramural or transmural 
fine needle aspiration/biopsy, to the ASC list. These are new codes for 
2005, and the commenter believes that the procedures are appropriate 
for performance in the ASC setting.
    Response: Colonoscopy CPT codes 45378 through 45387 are included on 
the list for ASCs. We believe that the new codes are comparable to the 
colonoscopy procedures currently included on the list, and so we will 
add CPT codes 45391 and 45392 as well. We will assign these two codes 
to payment group 2.
    Comment: We received a comment requesting that we add CPT code 
46230, Excision of external hemorrhoid tags and/or multiple papillae, 
to the ASC list. The commenter believes that this code is appropriate 
for the ASC list because its performance is consistent with the 
criteria we have set for inclusion on the ASC list.
    Response: Examination of the site of service data reveals that this 
procedure is performed 48 percent of the time in the physician office 
and 41 percent of the time in the outpatient department. We believe 
that it is comparable to CPT code 46220, Papillectomy or excision of 
single tag, anus, which is included in the ASC list. We agree with the 
commenter that this is an appropriate addition to the list. Therefore, 
we will add it and assign it to group 1.
    Comment: One commenter requested that we add CPT code 46706, Repair 
of anal fistula with fibrin glue, to the list because the aspects 
associated with performance of the procedure are consistent with the 
criteria for inclusion of the procedure on the ASC list.
    Response: The site of service data for this procedure show that it 
is performed 86 percent of the time in the outpatient department and 
only 1 percent of the time in the physician office setting. We agree 
with the commenter that this procedure is appropriate for addition to 
the ASC list. We will add the procedure and will assign it to payment 
group 1.
    Comment: One commenter requested that we add CPT code 49419, 
Insertion of intraperitoneal cannula or catheter, with subcutaneous 
reservoir, permanent, to the ASC list. The commenter stated that since 
CPT codes 49420, Insertion of intraperitoneal cannula or catheter for 
drainage or dialysis; temporary, 49421, Insertion of intraperitoneal 
cannula or catheter for drainage or dialysis; permanent, and 49422, 
Removal of permanent intraperitoneal cannula or catheter, are on the 
ASC list, CPT code 49419 should also be included.
    Response: We agree with the commenter that CPT code 49419 should 
also be added to the ASC list. We will add it to the list in payment 
group 1 with CPT codes 49420, 49421 and 49422.
    Comment: Several commenters requested that we add CPT code 52301, 
Cystourethroscopy; with resection or fulguration of ectopic 
ureterocele(s), unilateral or bilateral, to the ASC list. They stated 
that, due to patient discomfort, the procedure should be offered in the 
ASC where general anesthesia can be administered. They also noted that 
the procedure meets the ASC list criteria since it takes only 60 
minutes of intra-operative time, 45 to 60 minutes of recovery time, 
involves only minimal blood loss and is similar to at least one other 
procedure that is on the ASC list, CPT code 52214, Cystourethroscopy, 
with ejaculatory duct catheterization, with or without irrigation, 
instillation or duct radiography, exclusive of radiologic service.
    Response: We agree with the commenter that this procedure is very 
similar to other cystoscopic procedures on the ASC list and that it be 
added to the list. We will add it to the list and assign it to payment 
group 3.
    Comment: We received a comment requesting that we add CPT code 
52402, Cystourethroscopy with transurethral resection or incision of 
ejaculatory ducts, to the ASC list.
    Response: This is a new code for 2005 but we believe that it is 
similar enough to other existing procedures that we can make a decision 
about adding it to the list. Our medical staff believes that it is an 
appropriate procedure for inclusion on the list, and we will add it and 
assign it to payment group 3.
    Comment: We received a few comments requesting that we add CPT code 
57287, Removal or revision of sling for stress incontinence, to the ASC 
list.
    Response: This is an open surgical procedure and our medical staff 
believes

[[Page 23701]]

that more than 4 hours are needed for recovery time. Therefore, we do 
not believe that this is an appropriate addition to the ASC list.
    Comment: We received a comment requesting that we add CPT code 
51992, Laparoscopy, surgical; sling operation for stress incontinence, 
to the ASC list. The commenter believes that it meets our criteria for 
addition.
    Response: This procedure is performed most of the time in the 
hospital setting, either inpatient or outpatient, and our medical staff 
believe that it is an appropriate procedure for inclusion on the ASC 
list. We will add it to the ASC list and assign it to payment group 5.
    Comment: We received comments requesting that we add CPT codes 
64517, Injection, anesthetic agent; superior hypogastric plexus; and 
64681, Destruction by neurolytic agent, with or without radiologic 
monitoring; superior hypogastric plexus, to the ASC list. The commenter 
stated that these CPT codes were established in 2004 to add more 
specificity to the coding and that before that they were included on 
the ASC list under CPT code 64520, Injection, anesthetic agent; lumbar 
or thoracic (paravertebral sympathetic). The commenter stated that CPT 
codes 64517 and 64681 should be included on the list as is CPT code 
64520.
    Response: We do not have site of service data for these two 
procedures but agree with the commenter that they are similar to CPT 
code 64520 for which site of service data indicate that it is 
appropriately included on the ASC list. Therefore, we will add both of 
these codes to the list and will assign them to payment group 2.
    Comment: We received several comments requesting that we add CPT 
codes 62290, Injection procedure for discography, lumbar, and 62291, 
Injection procedure for discography, cervical or thoracic, to the 
Medicare ASC list. The commenters state that CPT codes 62290 and 62291 
are similar to CPT codes 62287, Aspiration or decompression procedure, 
percutaneous, of nucleus pulposus of intervertebral disk; and 62294, 
Injection procedure, arterial, for occlusion of arteriovenous 
malformation, which are included on the ASC list. The commenters wrote 
that in both procedures the physician places a needle into the 
intervertebral disk while the patient is under conscious sedation. The 
procedures typically involve X-ray to guide the needle placement, and 
most physician offices are not equipped for these services. Although 
most Medicare patients (about 65 percent) go to the outpatient hospital 
setting for the procedures, most non-Medicare patients are able to have 
the procedures in ASCs. They believe that Medicare beneficiaries should 
have the same treatment options.
    Response: We consider the procedures coded 62290 and 62291 to be 
integral to radiologic studies and are never performed alone and, as 
such, are not appropriate for addition to the ASC list. Radiologic 
studies that do not include an intervention are not considered surgical 
procedures and are not included on the list of ASC procedures. The 
procedures that are currently included on the ASC list that the 
commenters have chosen for comparison, CPT codes 62287 and 62294, are 
interventional procedures and are, therefore, not valid comparatives 
for this purpose.
    Comment: Several commenters requested that CPT codes 62367, 
Electronic analysis of programmable implanted pump for intrathecal or 
epidural drug infusion, without reprogramming; and 62368, Electronic 
analysis of programmable implanted pump for intrathecal or epidural 
drug infusion, with reprogramming, be added to the ASC list. They 
stated that because the procedures require X-ray imaging and because 
most physician offices are not adequately equipped for the services, 
Medicare beneficiaries typically go to the hospital for these services. 
They believe that Medicare beneficiaries should have the same site of 
service options as does the non-Medicare population.
    Response: Our data show that more than 75 percent of these services 
are provided to Medicare beneficiaries in the office setting. We 
believe that this is appropriate. These are not surgical procedures and 
are not of a level of complexity to warrant addition to the ASC list.
    Comment: We received one comment requesting that CPT codes 64561, 
Percutaneous implantation of neurostimulator electrodes, sacral nerve; 
64581, Incision for implant of neurostimulator electrodes, sacral 
nerve; and 95972, Intra-operative programming of implanted 
neurostimulator, be added to the ASC list. The commenter stated that 
these codes should be included because CPT code 64590, Insertion or 
replacement of peripheral neurostimulator pulse generator or receiver, 
direct or inductive coupling, is on the list.
    Response: We agree with the commenter that CPT codes 64561 and 
64581 are appropriate additions to the ASC list. We will add them to 
the list and assign them to payment group 3. We do not agree that CPT 
code 95972 is an appropriate addition because it is an analysis of the 
implanted device and is not a surgical procedure, and therefore, does 
not meet the criteria for the ASC list of procedures.
    Comment: A number of commenters requested that we add CPT code 
31040, Pterygomaxillary fossa surgery, to the ASC list. They believe 
that the procedure is similar to CPT code 30920, Ligation internal 
maxillary artery, transantral, which is included on the list, and that 
beneficiaries and their physicians should have ASCs as an option for 
site of service.
    Response: According to our data, the site of service for these two 
procedures is very different. Pterygomaxillary fossa surgery is 
performed in the physician office 66 percent of the time and on an 
inpatient basis 19 percent of the time compared to only 2 percent in 
the physician office and 61 percent in the inpatient setting for 
ligation of internal maxillary artery, transantral. We will not add CPT 
code 31040 to the list at this time because it is primarily an office-
based procedure.
    Comment: We received several comments requesting that we add CPT 
Level II code G0289, Arthroscopy, knee, surgical, for removal of loose 
body, foreign body, debridement/shaving or articular cartilage 
(chondroplasty) at the time of other surgical knee arthroscopy in a 
different compartment of the same knee, to the ASC list of procedures. 
The commenters believe that the additional time (at least 15 minutes) 
represented by this code should be recognized for payment in the ASC 
setting.
    Response: By definition, the procedure represented by CPT Level II 
code G0289 is part of another procedure and is never furnished as a 
separate procedure. For this reason, we will not add it to the ASC 
list.
    Comment: We received a number of comments requesting the addition 
of CPT codes 21030, Excision of benign tumor or cyst of maxilla or 
zygoma by enucleation and curettage; 21031, Excision of torus 
mandibularis; and 21032, Excision of maxillary torus palatinus, to the 
ASC list. The commenters stated that although these procedures are 
often furnished in the physician office, occasionally a facility 
setting is required for a patient who requires a deeper level of 
anesthesia or monitoring or whose condition warrants a sterile 
environment.
    Response: Our data indicate that these services are furnished in 
the physician office more than 80 percent of the time, and therefore we 
will not add these to the list at this time.
    Comment: We received a number of comments requesting that we add 
CPT codes 22520, Percutaneous

[[Page 23702]]

vertebroplasty, one vertebral body, uni- or bi-lateral injection; 
thoracic; 22521, Percutaneous vertebroplasty, one vertebral body, uni- 
or bi-lateral injection; lumbar; and 22522, Percutaneous 
vertebroplasty, one vertebral body, uni- or bi-lateral injection; each 
additional thoracic or lumbar vertebral body, to the ASC list. The 
commenters stated that the procedures require about one hour per 
vertebra, that the recovery time also is about 1 hour and that the 
procedures can be safely furnished in the ASC.
    Response: Our medical staff reviewed these procedures and 
determined that there is often an overnight stay required for patients 
who undergo vertebroplasty procedures. We believe that the recovery 
period usually is longer than 4 hours and so will not add these to the 
list of ASC procedures at this time.
    Comment: We received several comments requesting that CPT code 
27096, Injection procedure for sacroiliac joint, arthrography and/or 
anesthetic steroid, be added to the Medicare ASC list. The commenters 
stated that the procedure is typically required to ensure proper 
placement of the needle into the sacroiliac joint and that most 
physician offices do not have the appropriate equipment for this, 
forcing Medicare beneficiaries to go to hospital outpatient 
departments, whereas non-Medicare patients may go to ASCs for this 
service.
    Response: This is a radiological service that is furnished in the 
physician office setting more than half the time. We do not believe 
that it is an appropriate addition to the ASC list.
    Comment: A number of commenters requested that we add CPT codes 
27412, Autologous chondrocyte implantation, knee; and 27415, 
Osteochondral allograft, knee, open, to the ASC list because these new 
procedure codes meet our clinical procedure criteria for addition.
    Response: The CPT codes 27412 and 27415 are new in 2005, and we 
have no site of service data on which to base our decision. However, 
our medical staff believes that these are still predominantly inpatient 
procedures and should not be added to the ASC list at this time. 
Therefore, we will not add these to the ASC list.
    Comment: Several commenters asked that we add new CPT codes 29866, 
Arthroscopy, knee, surgical; osteochondral autograft(s); 29867, 
Arthroscopy, knee, surgical; osteochondral allograft; and 29868, 
Arthroscopy, knee, surgical; meniscal transplantation (includes 
arthrotomy for meniscal insertion), to the Medicare ASC list. The 
commenters stated that these procedures meet our clinical criteria for 
inclusion on the list and that they are similar to other knee 
arthroscopy procedures that currently are included on the list.
    Response: The CPT codes 29866, 29867, 29868 are new in 2005, and, 
therefore, we have no site of service data on which to base our 
decisions. Our medical staff believes that the procedures are most 
often performed in the inpatient setting, however, and as such are not 
appropriate for addition to the ASC list. Therefore, we will not add 
these procedures to the ASC list.
    Comment: We received one comment requesting that we add a number of 
CPT codes to the ASC list. For one of the codes, CPT code 63030, we 
received several requests for addition to the list. The requested 
additions are as follows:

------------------------------------------------------------------------
                                                              Percent
           CPT code                    Descriptor            inpatient
------------------------------------------------------------------------
 
63001.........................  Laminectomy with                      97
                                 exploration &/or
                                 decompression of spinal
                                 cord &/or cauda equina,
                                 w/o facetectomy,
                                 foraminotomy, or
                                 diskectomy, 1 or 2
                                 vertebral segments;
                                 cervical.
63003.........................  Laminectomy with                      98
                                 exploration &/or
                                 decompression of spinal
                                 cord &/or cauda equina,
                                 w/o facetectomy,
                                 foraminotomy or
                                 diskectomy, 1 or 2
                                 vertebral segments;
                                 thoracic.
63005.........................  Laminectomy with                      95
                                 exploration &/or
                                 decompression of spinal
                                 cord &/or cauda equina,
                                 w/o facetectomy,
                                 foraminotomy, or
                                 diskectomy, 1 or 2
                                 vertebral segments;
                                 lumbar, except for
                                 spondylolisthesis.
63011.........................  Laminectomy with                      98
                                 exploration &/or
                                 decompression of spinal
                                 cord &/or cauda equina,
                                 w/o facetectomy,
                                 foraminotomy, or
                                 diskectomy, 1 or 2
                                 vertebral segments;
                                 sacral.
63020.........................  Laminotomy,                           88
                                 (hemilaminectomy), w/
                                 decompression of nerve
                                 root(s), incl partial
                                 factectomy,
                                 foraminotomy &/or
                                 excision of herniated
                                 intervertebral disk;
                                 one interspace,
                                 cervical.
63030.........................  Laminotomy,                           84
                                 (hemilaminectomy), w/
                                 decompression of nerve
                                 root(s), incl partial
                                 factectomy,
                                 foraminotomy &/or
                                 excision of herniated
                                 intervertebral disk;
                                 one interspace, lumbar
                                 (incl. Open or
                                 endoscopically-assisted
                                 approach).
63035.........................  Laminotomy,                           93
                                 (hemilaminectomy), w/
                                 decompression of nerve
                                 root(s), incl partial
                                 factectomy,
                                 foraminotomy &/or
                                 excision of herniated
                                 intervertebral disk;
                                 each additional
                                 interspace, cervical or
                                 lumbar.
63040.........................  Laminotomy,                           94
                                 (hemilaminectomy), w/
                                 decompression of nerve
                                 root(s), incl partial
                                 factectomy,
                                 foraminotomy &/or
                                 excision of herniated
                                 intervertebral disk;
                                 reexploration, single
                                 interspace, cervical.
63042.........................  Laminotomy,                           93
                                 (hemilaminectomy), w/
                                 decompression of nerve
                                 root(s), incl partial
                                 factectomy,
                                 foraminotomy &/or
                                 excision of herniated
                                 intervertebral disk;
                                 reexploration, single
                                 interspace, lumbar.
63045.........................  Laminotomy,                           96
                                 (hemilaminectomy),
                                 factectomy and
                                 foraminotomy (uni- or
                                 bi-lateral w/
                                 decompression of spinal
                                 cord, cauda equina &/or
                                 nerve root(s)), single
                                 vertebral segment,
                                 cervical.
63046.........................  Laminotomy,                           97
                                 (hemilaminectomy),
                                 factectomy and
                                 foraminotomy (uni- or
                                 bi-lateral w/
                                 decompression of spinal
                                 cord, cauda equina &/or
                                 nerve root(s)), single
                                 vertebral segment,
                                 thoracic.
63047.........................  Laminotomy,                           94
                                 (hemilaminectomy),
                                 factectomy and
                                 foraminotomy (uni- or
                                 bi-lateral w/
                                 decompression of spinal
                                 cord, cauda equina &/or
                                 nerve root(s)), single
                                 vertebral segment,
                                 lumbar.
63048.........................  Laminotomy,                           96
                                 (hemilaminectomy),
                                 factectomy and
                                 foraminotomy (uni- or
                                 bi-lateral w/
                                 decompression of spinal
                                 cord, cauda equina &/or
                                 nerve root(s)), single
                                 vertebral segment, each
                                 additional segment,
                                 cervical, thoracic or
                                 lumbar.
------------------------------------------------------------------------

    The commenter asserted that, although these are usually furnished 
as inpatient procedures, the commenter believes that they meet the 
criteria for inclusion on the ASC list because they do not involve 
major or prolonged invasion of a body cavity, do not involve major 
blood loss, intra-operative time is less than 90 minutes, and recovery 
time is only 60 minutes.
    Response: As displayed, the procedures that the commenter has 
requested as additions to the ASC list

[[Page 23703]]

are performed predominantly as inpatient procedures. Even CPT code 
63030, the procedure for which addition was requested by several 
commenters, is performed in the outpatient department only 14 percent 
of the time and is otherwise performed on an inpatient basis. We do not 
believe that any of these is appropriate for addition to the ASC list.
    Comment: We received comments requesting that we add CPT code 
65820, Goniotomy, to the Medicare ASC list. The commenters believe that 
addition of this procedure to the list is appropriate so that 
beneficiaries who require an inpatient setting due to comorbid 
conditions or the need for general anesthesia will have the ASC as a 
choice for the procedure setting.
    Response: The site of service data indicate that this procedure is 
furnished in the physician office 40 percent of the time, in the 
outpatient department 25 percent of the time, and in the ASC 34 percent 
of the time. We believe that adding it to the Medicare ASC list is 
appropriate at this time. We will assign CPT code 65820 to payment 
group 1.
    Comment: We received a few requests that we add CPT code 65771, 
Radial keratotomy, to the ASC list.
    Response: Radial keratotomy is not a Medicare-covered procedure and 
will not be added to the Medicare ASC list.
    Comment: We received a number of comments requesting that we add to 
the list the following laser procedures that treat some of the most 
common forms of vision loss and blindness in elderly Americans:

65855 Trabeculoplasty by laser surgery
66711 Ciliary body destruction; cyclophotocoagulation endoscopic
66761 Iridotomy/iridectomy by laser surgery
67028 Intravitreal injection of a pharmacologic agent
67105 Repair retinal detachment, photocoagulation
67110 Repair retinal detachment by injection of air or other gas
67145 Prophylaxis of retinal detachment, photocoagulation
67210 Destruction of retinal lesions, photocoagulation
67220 Destruction of localized lesion of choroid; photocoagulation
67221 Destruction of localized lesion of choroid, photodynamic therapy
67228 Destruction of extensive or progressive retinopathy, 
photocoagulation

    The commenters stated that these procedures should be added to the 
list because they meet the criteria for inclusion. The intra-operative 
time is 15 to 20 minutes, recovery time is 40 to 60 minutes, no major 
blood vessels are encountered during the procedures, and anesthesia is 
rarely required. Further, commenters stated that, because CPT code 
66821, Discission of secondary membranous cataract, laser surgery, is 
on the list, the other laser procedures should be included as well.
    Response: We reviewed these codes and, with the exception of new 
CPT code 66711, all of these codes usually are performed in the 
physician office. The new CPT code 66711 is a procedure that has been 
included on the ASC list as part of CPT code 66710, Ciliary body 
destruction, cyclophotocoagulation, until January 2005 when CPT code 
66710 was redefined and CPT code 66711 was implemented. For the other 
procedures the commenter listed, except for CPT code 66761, the 
physician office is the site of service for the procedures more than 80 
percent of the time. The predominant site of service for CPT code 66761 
also is the office, with 68 percent of procedures furnished in that 
setting. Therefore, we will add only 66711 to the ASC list at this 
time.
    Comment: A number of commenters requested that we add CPT code 
67445, Orbitotomy with bone flap or window, with removal of bone for 
decompression, to the Medicare ASC ist.
    Response: The procedure is performed 58 percent of the time in the 
outpatient department and is virtually never performed in the physician 
office. We agree with the commenter and will add CPT code 67445 to the 
ASC list and will assign it to payment group 5.
    Comment: We received a comment requesting that we add CPT code 
67570, Optic nerve decompression, to the ASC list.
    Response: The procedure is performed 66 percent of the time in the 
outpatient department and is virtually never performed in the physician 
office. We agree with the commenter and will add CPT code 67570 to the 
Medicare ASC list and will assign it to payment group 4.
    Comment: Several commenters requested that we add CPT codes 67810, 
Biopsy of eyelid; 67825, Trichiasis, epilation by other than forceps; 
67840, Excision of lesion of eyelid without closure or with simple 
direct closure; and 67850, Destruction of lesion of lid margin, to the 
Medicare ASC list.
    Response: These codes are performed in the physician office 88 to 
95 percent of the time. Because these procedures are seldom performed 
in any other setting, we will not add them to the ASC list.
    Comment: Several commenters requested that we add CPT code 67912, 
Correction of lagophthalmos, with implantation of upper eyelid load, to 
the Medicare ASC list. They stated that the procedure is commonly 
performed to treat paralyzed upper eyelids that are sometimes the 
result of cardiovascular accidents (stroke). The procedure should be 
performed in a sterile environment and, although general anesthesia is 
rarely used, performance of the procedure in an operating room is 
preferable in many cases.
    Response: This was a new code for 2004, but using CPT code 67911, 
Correction of lid retraction, as a comparative, we examined the site of 
service data. We discovered that CPT code 67911 is performed in the 
physician office only 8 percent of the time; the rest of the time it is 
performed in outpatient settings. For this reason, we believe that CPT 
code 67912 should be added to the ASC list, and we will assign it to 
payment group 3.
    Comment: A few commenters wrote to request that we add CPT codes 
68100, Biopsy of conjunctiva; and 68110, Excision of lesion, 
conjunctiva, to the Medicare ASC list.
    Response: These two procedures are performed in the physician 
office more that 50 percent of the time and so will not be added to the 
ASC list.
    Comment: We received a few requests to add CPT codes 68400, 
Incision, drainage lacrimal gland; 68420, Incision, drainage of 
lacrimal sac; and 68530, Removal of foreign body or dacryolith, 
lacrimal passages, to the Medicare ASC list.
    Response: These procedures are performed in the physician office 
more than 80 percent of the time and so will not be added to the ASC 
list.
    Comment: We received one comment requesting that CPT codes 65780, 
Ocular surface reconstruction; amniotic membrane transplantation; 
65781, Ocular surface reconstruction; limbal stem cell allograft; and 
65782, Ocular surface reconstruction; limbal conjunctival autograft, be 
added to the Medicare ASC list.
    Response: These were new codes in 2004 and, based on the site of 
service data for other corneal procedures and the judgment of our 
medical staff, we believe that these procedures should be included on 
the Medicare ASC list, and we will assign them to payment group 5.
    Comment: We received a comment requesting that we add CPT code 
68371, Harvesting conjunctival allograft, living donor, to the ASC 
list.
    Response: This code was new for 2004, and we have no site of 
service data to use in our decision-making. Our medical staff 
determined, however, that this procedure is appropriate for

[[Page 23704]]

addition to the ASC list, consistent with other procedures currently on 
the list, CPT codes 68360, Conjunctival flap; bridge or partial; and 
68362, Conjunctival flap; total. We will add it to the ASC list and 
assign it to payment group 2.
    Comment: We also received comments requesting that several other 
ophthalmology codes be added to the list. These are: CPT codes 66990, 
Use of ophthalmic endoscope; 21386, Open treatment of orbital floor 
blowout fracture; periorbital approach; 21390, Open treatment orbital 
floor blowout fracture; periorbital approach, with alloplastic or other 
implant; 21406, Open treatment of fracture of orbit; except blowout; 
without implant; and 21407, Open treatment of fracture of orbit; except 
blowout; with implant. The commenters asserted that these procedures 
are not performed in the physician office and that they qualify as 
procedures suitable for the ASC.
    Response: CPT code 66990 does not represent a surgical procedure, 
and we do not believe that it is an appropriate addition to the ASC 
list. The code is used to recognize the use of equipment that is 
integral to surgical procedures. The three CPT codes, 21390, 21406, and 
21407, are performed predominantly in the hospital setting. Our medical 
staff believes that these procedures require more than 4 hours of 
recovery time and that the hospital site of service is the most 
appropriate. Therefore, we will not add them to the list.
    Comment: We received one comment requesting that we add the 
following procedures to the Medicare ASC list:

------------------------------------------------------------------------
                                                              Percent
                                                           furnished as
           CPT code                 Short descriptor       an in-patient
                                                             procedure
------------------------------------------------------------------------
33206.........................  Insertion of heart                  81.4
                                 pacemaker.
33207.........................  Insertion of heart                  85.6
                                 pacemaker.
33208.........................  Insertion of heart                  86.7
                                 pacemaker.
33212.........................  Insertion of pulse                  43.4
                                 generator.
33213.........................  Insertion of pulse                  40.3
                                 generator.
33214.........................  Upgrade of pacemaker                68.5
                                 system.
33215.........................  Reposition pacing-defib             77.3
                                 lead.
33216.........................  Insert lead pace-defib,             73.3
                                 one.
33217.........................  Insert lead pace-defib,             76.7
                                 dual.
33233.........................  Removal of pacemaker                47.4
                                 system.
33234.........................  Removal of pacemaker                79.6
                                 system.
33235.........................  Removal pacemaker                   84.3
                                 electrode.
------------------------------------------------------------------------

    The commenter requested that we add these codes and create a new 
payment group to accommodate the costs for these procedures.
    Response: With the exception of CPT codes 33212, 33213, and 33233, 
we do not believe that these codes are appropriate for the ASC setting 
because they are performed predominantly on an inpatient basis. 
However, our medical staff agrees that the procedures coded as CPT 
codes 33212, 33213, and 33233 are appropriate for inclusion of the ASC 
list. We will add these codes and will assign CPT codes 33212 and 33213 
to payment group 3 and CPT code 33233 to payment group 2.
    Comment: We received one comment requesting that we add the 
following codes to the Medicare ASC list:

------------------------------------------------------------------------
                                                              Percent
                                                           furnished as
           CPT code                 Short descriptor       an in-patient
                                                             procedure
------------------------------------------------------------------------
35470.........................  Repair arterial blockage            67.5
35471.........................  Repair arterial blockage            57.3
35472.........................  Repair arterial blockage            60.8
35473.........................  Repair arterial blockage            54.2
35474.........................  Repair arterial blockage            56.2
35490.........................  Atherectomy,                        59.5
                                 percutaneous.
35491.........................  Atherectomy,                        78.9
                                 percutaneous.
35492.........................  Atherectomy,                        69.7
                                 percutaneous.
35493.........................  Atherectomy,                        66.2
                                 percutaneous.
35494.........................  Atherectomy,                        53.1
                                 percutaneous.
35495.........................  Atherectomy,                        67.2
                                 percutaneous.
36200.........................  Place catheter in aorta.            45.7
36215.........................  Place catheter in artery            46.7
36216.........................  Place catheter in artery            47.2
36217.........................  Place catheter in artery            59.1
36218.........................  Place catheter in artery            55.0
36245.........................  Place catheter in artery            55.5
36246.........................  Place catheter in artery            51.5
36247.........................  Place catheter in artery            57.7
36248.........................  Place catheter in artery            60.5
------------------------------------------------------------------------

    The commenter believes that the listed procedures are appropriate 
for performance in an ASC setting because they meet the clinical 
criteria for inclusion.
    Specifically, the commenter stated that CPT codes 35470, 35471, 
35473, and 35474 are less invasive than CPT

[[Page 23705]]

codes 37205, Transcatheter placement of an intravascular stent(s), 
(except coronary, carotid, and vertebral vessel) percutaneous, initial 
vessel; and 37206 Transcatheter placement of an intravascular stent(s), 
(except coronary, carotid, and vertebral vessel) percutaneous, each 
additional vessel, which we proposed to add to the ASC list in the 
November 26, 2004 proposed rule. The commenters also stated that CPT 
codes 35490, 35491, 35492, 35493, 35494, and 35495 should be added if 
we are making final our proposal to add CPT codes 35475, Transluminal 
balloon angioplasty; brachiocephalic trunk or branches; and 35476, 
Transluminal balloon angioplasty; venous, to the list.
    Response: We are reluctant to add CPT codes 35470, 35471, 35473, 
35474, 35490, 35491, 35492, 35493, 35494, or 35495 to the ASC list. The 
procedures are performed in either the outpatient or inpatient 
departments of the hospital; and the distribution between the two 
settings is about even although most are performed somewhat more 
frequently on an inpatient basis. There is almost no utilization of the 
ASC or physician office settings. We believe that this is indicative of 
a level of clinical complexity that requires immediate access to the 
facilities available in the hospital and are not available in either 
the office or ASC settings. These procedures require more than 4 hours 
of recovery time and involve major blood vessels and do not meet our 
clinical criteria for inclusion on the ASC list. We will not add these 
procedures to the ASC list at this time. Furthermore, as explained in 
section II above, we reevaluated our proposal to add CPT codes 35475, 
35476, 37205, and 37206 to the ASC list and have determined that they 
are more appropriately limited to the hospital outpatient and inpatient 
settings at this time.
    Similarly, based on their clinical judgment and site of service 
data, our clinical staff considers all of the other procedures on this 
list to be predominantly inpatient procedures and not appropriate for 
addition to the ASC list.
    Comment: We received a comment requesting that we add new CPT codes 
36475, Endovenous ablation therapy of incompetent vein, extremity, 
inclusive of all imaging guidance and monitoring, percutaneous, 
radiofrequency; first vein, 36476, Endovenous ablation therapy of 
incompetent vein, extremity, inclusive of all imaging guidance and 
monitoring, percutaneous, radiofrequency; second and subsequent veins 
in single extremity, each through separate access sites; 36478, 
Endovenous ablation therapy of incompetent vein, extremity, inclusive 
of all imaging guidance and monitoring, percutaneous, laser; first 
vein; and 36479, Endovenous ablation therapy of incompetent vein, 
extremity, inclusive of all imaging guidance and monitoring, 
percutaneous, laser; second and subsequent veins treated in a single 
extremity, each through separate access sites, to the ASC list. The 
commenter believes that the thermal ablation procedures are appropriate 
for performance in the ASC.
    Response: The codes represent a new technology, and we do not have 
site of service data for these codes or comparable codes to use to 
support our decision to add them to the list of procedures on the ASC 
list. Based on clinical information and indications for use of the 
procedures, our medical staff believes that these codes are appropriate 
for the ASC setting and recommends that we add them to the ASC list. We 
will assign the codes to payment group 3 consistent with other 
procedures with similar clinical indications.
    Comment: We received one comment requesting that we add CPT codes 
36100, Introduction of needle or intracatheter, carotid or vertebral 
artery; 36120, Introduction of needle or intracatheter; retrograde 
brachial artery; 36140, Introduction of needle or intracatheter; 
extremity artery; and 36145, Introduction of needle or intracatheter; 
arteriovenous shunt created for dialysis, to the Medicare ASC list. The 
commenter believes that these procedures satisfy our criteria for 
inclusion on the list because they are integral to the surgical 
procedures for stent placement and other surgeries. The commenter 
believes that these procedures should receive separate payment in the 
ASC.
    Response: These codes represent procedures that are components of 
other procedures and are not typically performed alone. As components 
of other procedures, they do not qualify as appropriate additions to 
the ASC list. Similar to the OPPS, the ASC payment system does not 
recognize for separate payment procedures that are integral to the 
performance of the primary surgical procedure.
    Comment: We received one comment requesting that we add CPT Level 
III code 0020T, Extracorporeal shock wave therapy for plantar 
facsitits, to the ASC list. The commenter stated that this procedure 
was recently approved by the CPT Editorial Panel to be changed to a 
Category I code in 2006 and therefore, we should add the new code, CPT 
code 2825X, to the ASC list. The commenter believes that because the 
equipment necessary to perform this treatment is expensive, the service 
is not typically available in physician offices and is more common in 
the ASC setting.
    Response: Although there will be a Level I CPT code for this 
service in 2006, there is not one now and so, we will not add this 
procedure to the list.
    Comment: A commenter requested that we add CPT code 28108, Excision 
or curretage of bone cyst or benign tumor, phalanges of foot, to the 
ASC list because all of the other related CPT codes (28106 28107, 
28110, etc.) are on the list. The commenter believes that CPT code 
28108 is like the codes that are already on the list.
    Response: We agree with the commenter that CPT code 28108 is very 
similar to other CPT codes in that group, and we will add it to the 
list in payment group 2.
    Comment: One commenter requested that we add CPT codes 28230, 
Tenotomy, open, tendon flexor; foot, single or multiple tendon(s); and 
28232, Tenotomy, open, tendon flexor; toe, single tenson, to the list 
because they are comparable to CPT code 28234, which is on the list.
    Response: CPT codes 28230 and 28232 are components of other 
procedures and are not comparable to CPT code 28234, which is a 
separate, stand-alone procedure. Because the procedures are components 
of other procedures, we do not believe it is appropriate to add these 
codes to the ASC list for separate payment.
    Comment: We received a few comments requesting that we add CPT code 
58565, Hysteroscopy, with bilateral fallopian tube cannulation to 
induce occlusion by placement of permanent implants, to the ASC list. 
This is a new code for 2005 and was created to allow for more coding 
specificity.
    Response: Our medical staff determined that this code is an 
appropriate addition to the ASC list based on the other hysteroscopy 
codes currently included on the list. We will add it to the ASC list 
and assign it to payment group 4.
    Comment: We received one comment requesting that we add a number of 
urologic and gynecologic codes. The codes requested for addition are 
displayed in the table below:

[[Page 23706]]



------------------------------------------------------------------------
               CPT code                            Descriptor
------------------------------------------------------------------------
51741.................................  Complex uroflowmetry.
51784.................................  Electromyography studies (EMG)
                                         of anal or urethral sphincter,
                                         other than needle.
51795.................................  Voiding pressure studies (VP);
                                         bladder voiding pressure
51797.................................  Voiding pressure studies;
                                         intrabdominal voiding pressure
                                         (AP).
58260.................................  Vaginal hysterectomy, for uterus
                                         < 250 gms.
58262.................................  Vaginal hysterectomy, w/removal
                                         of tube(s), &/or ovary(s).
58263.................................  Vaginal hysterectomy, w/removal
                                         of tube(s), &/or ovary(s), w/
                                         repair enterocele.
58267.................................  Vaginal hysterectomy, w/colpo-
                                         urethrocystopexy with or w/o
                                         endoscopic.
58270.................................  Vaginal hysterectomy, w/repair
                                         enterocele.
58275.................................  Vaginal hysterectomy, w/total or
                                         partial vaginectomy.
58280.................................  Vaginal hysterectomy, w/total or
                                         partial vaginectomy, w/repair
                                         enterocele.
58290.................................  Vaginal hysterectomy, for uterus
                                         > 250 gms.
58291.................................  Vaginal hysterectomy for uterus
                                         > 250 gms w/removal of tube(s)
                                         &/or ovary(s).
58292.................................  Vaginal hysterectomy for uterus
                                         > 250 gms w/removal of tube(s)
                                         &/or ovary(s), w/repair of
                                         enterocele.
58293.................................  Vaginal hysterectomy for uterus
                                         > 250 gms, w/colpo-
                                         urethrocystopexy with or w/o
                                         endoscopic control.
58294.................................  Vaginal hysterectomy for uterus
                                         > 250 gms, w/repair of
                                         enterocele.
58356.................................  Endometrial cryoablation w/
                                         ultrasonic guidance, including
                                         endometrial curettage.
58552.................................  Laparoscopy surgical, w/vaginal
                                         hysterectomy, for uterus <= 250
                                         gms, w/removal of tube(s) &/or
                                         ovary(s).
58553.................................  Laparoscopy surgical, w/vaginal
                                         hysterectomy, for uterus >= 250
                                         gms.
58554.................................  Laparoscopy surgical, w/vaginal
                                         hysterectomy, for uterus <= 250
                                         gms, w/removal of tube(s) &/or
                                         ovary(s).
------------------------------------------------------------------------

    Generally, the commenter believes that the listed codes should be 
added to the ASC list because the physician should be allowed to select 
the most appropriate setting for performance of procedures. The 
commenter identified a few codes that are included on the ASC list that 
the commenter believes are comparable to several of the codes for which 
addition is being solicited. For example, the commenter indicates that 
because CPT code 58550, Laparoscopy surgical, with vaginal hysterectomy 
for uterus 250 grams or less, is included on the list, CPT codes 58552, 
58553, and 58554 also should be included and that the inclusion of CPT 
code 51772, urethral pressure profile studies is an indication that CPT 
code 51741 should be added to the list.
    Response: We do not believe that any of the codes listed is 
appropriate for addition to the ASC list. CPT codes 51741, 51784, 
51795, and 51797 are performed in the physician office setting 80 
percent or more of the time and so do not meet our criteria for 
inclusion on the ASC list. The other listed procedures are furnished as 
inpatient procedures most of the time and require more than 4 hours of 
recovery time and so do not meet the criteria for inclusion on the ASC 
list. We do not believe that addition to the ASC list is appropriate 
for these codes at this time.
    Comment: We received one comment requesting the addition to the ASC 
list of the following procedures:

------------------------------------------------------------------------
               CPT code                            Descriptor
------------------------------------------------------------------------
58970.................................  Follicle puncture for oocyte
                                         retrieval.
58974.................................  Embryo transfer, intrauterine.
58976.................................  Gamete, zygote, or embryo
                                         intrafallopian transfer, any
                                         method.
------------------------------------------------------------------------

    The commenter believes that the physician should have the freedom 
to select the most appropriate site of service for performance of these 
procedures.
    Response: These procedures are performed predominantly in the 
outpatient department, and we believe that they satisfy the criteria 
for inclusion on the ASC list. We will add the procedures to the list 
and assign all of them to payment group 1.
    Comment: We received a comment requesting that we add CPT code 
64435, Injection, anesthetic agent; paracervical (uterine) nerve, to 
the ASC list.
    Response: This is a procedure that is predominantly performed in 
the physician office and as such is not appropriate for inclusion of 
the ASC list.
    Comment: We received several comments asking us to add 
brachytherapy codes:

------------------------------------------------------------------------
               CPT code                            Descriptor
------------------------------------------------------------------------
13153.................................  Repair, complex, eyelids, nose,
                                         ears and/or lips;each
                                         additional 5cm or less.
19295.................................  Image guided placement, metallic
                                         localization clip,
                                         percutaneous, during breast
                                         biopsy.
19296.................................  Placement of radiotherapy
                                         afterloading balloon catheter
                                         into the breast for
                                         interstitial radioelement
                                         application following partial
                                         mastectomy, includes imaging
                                         guidance; on date separate from
                                         partial mastectomy.
19297.................................  Placement of radiotherapy
                                         afterloading balloon catheter
                                         into the breast for
                                         interstitial radioelement
                                         application following partial
                                         mastectomy, includes imaging
                                         guidance; concurrent with
                                         partial mastectomy.
19298.................................  Placement of radiotherapy
                                         afterloading brachytherapy
                                         catheters into the breast for
                                         interstitial radioelement
                                         application following partial
                                         mastectomy, includes imaging
                                         guidance.
57155.................................  Insertion of uterine tandems and/
                                         or vaginal ovoids for clinical
                                         brachytherapy.
58346.................................  Insertion of Heyman capsules for
                                         clinical brachytherapy.
------------------------------------------------------------------------

    Response: Procedures represented by CPT codes 13153, 19295, and 
19297 are ``add-on'' procedures that are included in another procedure 
and are not performed on their own. We do not typically approve this 
type of procedure for addition to the ASC list as the facility costs 
for the additional work included in the procedure is not usually

[[Page 23707]]

significant. That is, the resources required to perform a procedure 
with or without also performing an ``add-on'' procedure are not 
significantly different. Time in the operating suite, supplies, and 
other resources that Medicare pays for in the ASC, are not 
significantly increased by performance of the additional procedure. 
Therefore, under the current rate-setting method, we cannot accurately 
identify a separate price for ``add-on'' procedures. We will not add 
CPT codes 13153, 19295, or 19297 to the ASC list.
    However, we agree with the commenters that CPT codes 19296, 19298, 
57155, and 58346 meet our criteria and should be added to the ASC list. 
We also agree that uterine and breast brachytherapy are appropriate 
services for the ASC setting. While we are adding these procedure codes 
to the list, these codes alone do not comprise a brachytherapy 
procedure. Similar to the performance of prostate brachytherapy, the 
codes for uterine and breast brachytherapy are among several procedures 
that may be furnished in the performance of uterine or breast 
brachytherapy and do not include the application of seeds.
    We are currently trying to resolve a number of payment options 
related to the performance of prostate brachytherapy and the extent to 
which those services could be paid for when furnished in an ASC under 
existing regulations related both to ASCs and other payment systems 
such as the Medicare physician fee schedule. The issues are very 
complex, and we are still exploring various options. Until we address 
them comprehensively through national instructions, payment for uterine 
or breast brachytherapy performed in an ASC is determined by local 
carriers.
    Comment: We received one comment requesting that we place CPT code 
50590, Extracorporeal Shock Wave Lithotripsy, on the list of approved 
ASC procedures.
    Response: We had proposed to add this code in our June 1998 
proposed rule with a proposed payment of $2,107. The American 
Lithotripsy Society opposed the $2,107 payment rate. In American 
Lithotripsy Society v. Sullivan, 785 F. Supp. 1035 (D.D.C. 1992), the 
District Court ordered that we ``publish the data and other information 
we are relying on in setting a (lithotripsy) rate and allow time for 
comment before issuing a final notice * * *.'' The data and other 
information that we would rely on in setting a payment rate for ESWL 
are part of the ratesetting methodology that we proposed in the June 
1998 proposed rule. Because we are not making that ratesetting 
methodology final at this time, we might not be in compliance with the 
District Court order if we were to add CPT code 50590 to the ASC list 
in this interim final rule under the current payment rate structure. 
Therefore, we are not adding CPT code 50590 to the ASC list at this 
time.
BILLING CODE 4120-01-P
    Table 7: Final Additions to the ASC List, Effective July 2005
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

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. 35).

IV. Waiver of Proposed Rulemaking

    We ordinarily publish this list and propose payment amounts for new 
items and propose deletions of items in a notice of proposed 
rulemaking, subject to public comments. We published such a notice in 
November 2004. In response to the proposed rule, we received and acted 
upon a large number of public comments. Commenters requested the 
addition of a number of procedures to the list; we have added a number 
of procedures to the list, and we have assigned them to payment groups. 
Despite the fact that we view these additions as logical outgrowths of 
our proposed rule, we have decided to provide an opportunity for public 
comment on the procedures and payment group assignments which were not 
contained in the proposed rule. Nonetheless, payment will be made, 
beginning July 5, 2005, based on the list and payment groups contained 
in this rule.
    With respect to the procedures added to the ASC list since the 
proposed rule, we are waiving our usual notice and comment process. 
Those procedures will be used effective July 5, 2005 as though they had 
been included in the proposed rule. We believe that waiving the notice 
and comment process with respect to those procedures is in the public 
interest. If notice and comment were not waived, we could not add the 
procedures suggested by public comments to the list of procedures that 
may be performed in ASCs. This result could be detrimental to 
beneficiaries, who might be unable to receive the procedures in an 
ambulatory setting. Therefore, we find good cause to waive notice and 
opportunity for comment with regard to the changes being made to the 
ASC list which were not published in the proposed rule.

V. Regulatory Impact Statement

    [If you choose to comment on issues in this section, please include 
the caption ``REGULATORY IMPACT STATEMENT'' at the beginning of your 
comments.]

A. Overall Impact

    We have examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Regulatory Flexibility Act (RFA) (September 16, 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 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). Our actuary 
has prepared a fiscal impact estimate. As shown in the table below, for 
fiscal years 2005 through 2009, the estimated effect on Medicare 
program expenditures that result from the additions to and deletions 
from the ASC list made final in this rule are estimated to have zero 
impact in 2005, increasing to $5 million savings per year for 2006 
through 2009. We expect the estimated savings to result from 
approximately 10 percent of

[[Page 23711]]

the procedures proposed for addition moving to a less costly ASC 
setting from the hospital. This interim final rule will not have a 
major impact on the Medicare budget.

------------------------------------------------------------------------
                                                           Cost (Tens of
                           FY                               $ millions)
------------------------------------------------------------------------
2005....................................................               0
2006....................................................              -5
2007....................................................              -5
2008....................................................              -5
2009....................................................              -5
------------------------------------------------------------------------

    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 because of their nonprofit status or because they have 
revenues of $6 million to $29 million in any 1 year. According to small 
business associations, approximately 73 percent of all ASCs are 
considered small entities because they have revenues of $11.5 million 
or less. Individuals and States are not included in the definition of a 
small entity.
    Section 1102(b) of the Act requires us to prepare a regulatory 
impact analysis if a final 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 of a Metropolitan 
Statistical Area and has fewer than 100 beds. This interim final rule 
does not have a significant impact on the operations 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 rule 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 rule will not have an effect on the 
governments mentioned, and the private sector costs will be less than 
the $110 million threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a final rule that imposes 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. This rule 
will not have a substantial effect on State or local governments.

B. Anticipated Effects

    The entities affected by this interim final rule are Medicare 
certified ASCs, physician offices and clinics, hospitals, and 
beneficiaries. No other providers are affected. This rule will not 
affect State or local governments. There are more than 4,000 ASCs 
currently certified by Medicare, nearly three-quarters of which fit the 
definition of a ``small entity''.
    This interim final rule revises the ASC list by adding 67 
procedures and deleting five. Professional societies, physicians, ASC 
administrators, and ASC associations recommended most of the codes 
proposed for addition to the ASC list. Currently, the procedures that 
we propose to add to the ASC list are performed predominantly in a 
hospital outpatient setting. Our medical advisors agree that the 
proposed additions meet the criteria for ASC procedures that are 
discussed in section II of this preamble and that they can be safely 
and appropriately performed in an ASC.
    Currently, if a physician performed one of the 67 procedures before 
the effective date of this rule, Medicare would not allow payment to 
the ASC. Addition of these procedures to the ASC list may benefit ASCs 
because it will allow Medicare to pay the facility fee to the ASC when 
the procedures are furnished there. Further, the additional procedures 
may increase the number of beneficiaries to whom the ASC can offer its 
services.
    Beneficiaries may benefit from the additions to the ASC list 
because they will have an additional service setting that they and 
their physicians may consider for elective surgical procedures and the 
copayment amounts for services furnished in the ASC setting may be 
lower than in the hospital outpatient department where many of these 
procedures currently are furnished.
    We estimate that approximately 25 percent of the newly-added 
procedures that are currently furnished in the physician office will 
migrate to an ASC setting. This may increase Medicare program spending 
and beneficiary copayment amounts because the ASC facility fees for 
these procedures often exceed changes in the physician office setting.
    To the extent that hospital outpatient utilization decreases and 
ASC utilization increases, the Medicare program will realize a savings 
because the ASC facility fee for most of the proposed additions to the 
ASC list is lower than the payment rate for the same procedures under 
the OPPS. Because hospitals perform a much higher volume of ambulatory 
surgeries overall than are performed in ASCs, we do not expect 
significant hospital revenue losses from procedures proposed for 
addition to the ASC list shifting to the ASC setting.
    In addition, we are deleting five procedures from the existing ASC 
list. We proposed to delete these codes based on recommendations from 
physicians or specialty societies because the procedures do not meet 
our criteria; however, they do not represent a significant volume of 
procedures furnished in ASCs and so deleting them from the list will 
have no negative effect on ASCs or beneficiaries. As we explained 
above, three of the codes that we are proposing to delete are 
procedures that are being performed primarily in a physician office 
setting and do not require the more elaborate resources of an ASC to be 
safely performed, and one is furnished 100 percent of the time as an 
inpatient procedure. Therefore, we do not believe that deleting these 
procedures from the ASC list will limit beneficiary access or 
compromise patient safety. For the above reasons, we are not preparing 
analyses for either the RFA or section 1102(b) of the Act because we 
have determined, and we certify, that this interim final rule would not 
have a significant economic impact on a substantial number of small 
entities or a significant impact on the operations of a substantial 
number of small rural hospitals.

C. Alternatives Considered

    We are issuing this interim final rule to meet a statutory 
requirement to update the list of approved ASC procedures biennially. 
We last updated the ASC list effective July 1, 2003. We implement the 
biennial update of the list through notice in the Federal Register and 
give interested parties an opportunity to comment on proposed additions 
to and deletions from the ASC list. If we do not update the ASC list by 
July 2005, we would be out of compliance with the statute, and we would 
be denying beneficiary access to surgical procedures in the ASC setting 
that meet our criteria and are safely and appropriately performed in an 
ASC.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

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


[[Page 23712]]


    Dated: April 15, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: April 28, 2005.
Michael O. Leavitt,
Secretary.

Addendum--List of Medicare Approved ASC Procedures With Additions and 
Deletions

`A' indicates that the procedure is being added to the ASC list, as 
proposed
`A*' indicates that the procedure is being added to the ASC list in 
response to comment and was not proposed. These additions are open for 
comment.
`D' indicates that the code is being deleted from the ASC list, as 
proposed
BILLING CODE 4120-01-P

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[FR Doc. 05-8875 Filed 4-29-05; 4:04 pm]
BILLING CODE 4120-01-C