[Federal Register Volume 70, Number 165 (Friday, August 26, 2005)]
[Rules and Regulations]
[Pages 50940-50947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-17098]



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Part VII





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 410



Medicare Program; Conditions for Payment of Power Mobility Devices, 
Including Power Wheelchairs and Power-Operated Vehicles; Interim Final 
Rule

  Federal Register / Vol. 70 , No. 165 / Friday, August 26, 2005 / 
Rules and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 410

[CMS-3017-IFC]
RIN 0938-AM74


Medicare Program; Conditions for Payment of Power Mobility 
Devices, including Power Wheelchairs and Power-Operated Vehicles

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

ACTION: Interim final rule with comment period.

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SUMMARY: This interim final rule conforms our regulations to section 
302(a)(2)(E)(iv) of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Pub. L. 108-173). This rule defines the term 
power mobility devices (PMDs) as power wheelchairs and power operated 
vehicles (POVs or scooters). It sets forth revised conditions for 
Medicare payment of PMDs and defines who may prescribe PMDs. This rule 
also requires a face-to-face examination of the beneficiary by the 
physician or treating practitioner and a PMD prescription and pertinent 
parts of the medical record that the durable medical equipment supplier 
maintains in records and makes available to CMS or its agents upon 
request. Finally, this rule discusses CMS' policy on documentation that 
may be requested by CMS or its agents to support a Medicare claim for 
payment, as well as the elimination of the Certificate of Medical 
Necessity for PMDs.

DATES: Effective date: These regulations are effective on October 25, 
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 November 25, 2005.

ADDRESSES: In commenting, please refer to file code CMS-3017-IFC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four 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 regular 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-3017-IFC, P.O. Box 8013, Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send 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-3017-IFC, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    4. 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.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by mailing your 
comments to the addresses provided at the end of the ``Collection of 
Information Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Karen Daily, (410) 786-0189.

SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments 
from the public on all issues set forth in this rule to assist us in 
fully considering issues and developing policies. You can assist us by 
referencing the file code CMS-3017-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 our public 
web site 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.]
    Sections 1832(a)(1) and 1861(s)(6) of the Act establish that the 
provision of durable medical equipment is a covered benefit under Part 
B of the Medicare program. Section 1834(a)(1)(A) provides that Medicare 
will pay for covered items defined in section 1834(a)(13) which, in 
turn, defines the term ``covered item'' to include durable medical 
equipment (DME) defined in section 1861(n). Section 1861(n) provides 
that DME includes wheelchairs, including power-operated vehicles that 
may appropriately be used as wheelchairs, that are necessary based on 
the beneficiary's medical and physical condition, meet safety 
requirements prescribed by the Secretary, and are used in the 
beneficiary's home, including an institution used as the beneficiary's 
home other than a hospital described in section 1861(e)(1) or a skilled 
nursing facility described in section 1819(a)(1). Section 414.202 of 
our regulations further defines DME as equipment that can withstand 
repeated use, is primarily and customarily used to serve a medical 
purpose, generally is not useful to a person in the absence of an 
illness or injury, and is appropriate for use in the home. We have 
interpreted the term wheelchair to include both power wheelchairs and 
power-operated vehicles (POVs or scooters), and we collectively refer 
to

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power wheelchairs and power-operated vehicles as power mobility devices 
(PMDs).
    When POVs were first introduced, we were concerned about their 
stability and the danger they could pose to a Medicare beneficiary. 
Therefore, we issued a regulation (57 FR 57688) allowing only 
specialists in physical medicine, orthopedic surgery, neurology, and 
rheumatology to prescribe POVs. At that time, we believed that these 
specialists were the most qualified to perform the required evaluation 
to determine whether a POV was medically necessary and whether the 
beneficiary had the capacity to operate the POV safely and effectively. 
At the same time, beneficiaries were able to get a prescription for a 
power wheelchair without seeing a specialist. We did not issue a 
similar regulation for power wheelchairs because we did not harbor the 
same concerns about their safety.
    Our requirement that only certain specialists could prescribe a POV 
may have created a disincentive for qualified beneficiaries to obtain 
POVs. Many beneficiaries may not have realized that under an exception 
to this requirement set forth in Sec.  410.38(c)(4), they could obtain 
a prescription from their physician if a specialist was not reasonably 
accessible. For example, if travel to the specialist would be more than 
one day's round trip from the beneficiary's home or if the 
beneficiary's medical condition precluded travel to the nearest 
available specialist, we stated that these circumstances would satisfy 
the ``not reasonably accessible'' requirement. We allowed this 
exception under the current regulation because it addressed the needs 
of beneficiaries who lived in rural or other areas with limited access, 
or who were physically unable to see a specialist.
    However, since POVs were first introduced the technology has 
improved. For example, the POV now has an improved turning radius that 
gives it greater stability and makes it easier to use. Given that these 
technological advancements have made many POVs safer to use, a 
specialist assessment of the beneficiary's capacity to operate a POV, 
while recommended, is no longer required.
    In addition, CMS and the Office of the Inspector General (OIG) have 
identified inflated and falsified billings as a serious problem among 
certain DME suppliers. Medicare payments for power wheelchairs have 
increased approximately 350 percent from 1999 to 2003 (from $259 
million in 1999 to approximately $1.2 billion for 2003), while overall 
Medicare program outlays have risen approximately 28 percent.
    In an effort to address fraud and abuse, Medicare contractors have 
always had the authority to review claims and additional documentation 
to determine if services provided were reasonable and necessary in 
accordance with section 1862(A)(1)(a).
    Section 302(a)(2) of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, Pub. L. 108-173 (MMA), added section 
1834(a)(1)(E)(iv) to the Act, which provides that payment may not be 
made for a covered item consisting of a motorized or power wheelchair 
unless a physician (as defined in section 1861(r)(1) of the Act), or a 
physician assistant, nurse practitioner, or clinical nurse specialist 
(as those terms are defined in section 1861(aa)(5) of the Act) has 
conducted a face-to-face examination of the beneficiary and written a 
prescription for the item. This regulation is intended to implement 
section 1834(a)(1)(E)(iv) of the Act.
    Payment for the history and physical examination will be made 
through the appropriate evaluation and management (E&M) code 
corresponding to the history and physical examination of the patient. 
Due to the MMA requirement that the physician or treating practitioner 
create a written prescription and this regulation's requirement that 
the physician or treating practitioner prepare pertinent parts of the 
medical record for submission to the DME supplier, we will establish an 
add-on G Code (used in addition to an E&M code for the examination) to 
recognize the additional physician work and resources required to 
establish and document the need for the PMD. We believe that the 
typical amount of additional physician work and resources involved is 
equivalent to the physician fee schedule relative values established 
for a level 1 office visit for an established patient (CPT 99211). The 
payment amount for such a visit is $21.60; therefore, the payment 
amount for this new G code for 2005 will be $21.60, adjusted by the 
geographic area where the service is provided, and based on the 
physician fee schedule relative values for a level 1 established office 
visit (CPT 99211). This change to the physician fee schedule will be 
effective with this rule.

II. Provisions of the Interim Final Rule

    [If you choose to comment on issues in this section, please include 
the caption ``Provisions of the Interim Final Rule'' at the beginning 
of your comments.]
    We are revising Sec.  410.38(c) of our regulations to specify the 
following:
     The definition of a ``power mobility device (PMD)''. We 
are defining PMDs as a subclass of wheelchairs that includes both power 
wheelchairs and power-operated vehicles that a beneficiary uses in the 
home.
     The definition of a ``physician'' and a ``treating 
practitioner''. As directed by section 1834(a)(1)(E)(iv), we are 
defining the term ``physician'' in accordance with section 1861(r)(1) 
of the Act. We are defining the term ``treating practitioner'' to mean 
a physician assistant, nurse practitioner, and clinical nurse 
specialist, as those terms are defined by section 1861(aa)(5) of the 
Act. We are using the term ``treating'' to further explain that the 
practitioner must be the one who has conducted the face-to-face 
examination of the beneficiary. We believe that the removal of 
restrictions regarding who can prescribe POVs will increase a 
beneficiary's access to the PMD that is most appropriate for the 
beneficiary's condition. Currently, physicians (other than the 
specialists currently described in section 410.38) and other treating 
practitioners cannot prescribe POVs and are limited to prescribing 
power wheelchairs.
     The definition of ``supplier.'' We are defining the term 
supplier for the purposes of this rule as a durable medical equipment 
(DME) supplier.
     The physician or treating practitioner must conduct a 
face-to-face examination of the beneficiary and write a PMD 
prescription.
     The PMD prescription must be in writing and signed and 
dated by the physician or treating practitioner who performed the face-
to-face examination and received by the supplier within 30 days after 
the face-to-face examination. We are defining the term ``prescription'' 
as a written order that must include the beneficiary's name, the date 
of the face-to-face examination, the diagnoses and conditions that the 
PMD is expected to modify, a description of the item (for example, a 
narrative description of the specific type of PMD), the length of need, 
the physician or treating practitioner's signature and the date the 
prescription is written.
     A beneficiary discharged from a hospital does not need to 
have a separate face-to-face examination if the physician or treating 
practitioner who performed the face-to-face examination during his or 
her hospital stay issues the written prescription and supporting 
documentation for the PMD and they are received by the supplier within 
30 days after the date of discharge.

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     The face-to-face examination requirement does not apply 
when only accessories for PMDs are being ordered.
     In addition to the prescription for the PMD, the physician 
or treating practitioner must provide to the supplier supporting 
documentation which will include pertinent parts of the medical record 
that clearly support the medical necessity for the PMD in the 
beneficiary's home. Pertinent parts from the documentation of the 
beneficiary's PMD evaluation may include the history, physical 
examination, diagnostic tests, summary of findings, diagnoses, and 
treatment plans. The physician or treating practitioner should select 
only those parts of the medical record that clearly demonstrate medical 
necessity for the PMD. The parts of the medical record selected should 
be sufficient to delineate the history of events that led to the 
request for the PMD; identify the mobility deficits to be corrected by 
the PMD; and document that other treatments do not obviate the need for 
the PMD, that the beneficiary lives in an environment that supports the 
use of the PMD and that the beneficiary or caregiver is capable of 
operating the PMD. In most cases, the information recorded at the face-
to-face examination will be sufficient. However, there may be some 
cases where the physician or treating practitioner has treated a 
patient for an extended period of time and the information recorded at 
the face-to-face examination refers to previous notes in the medical 
record. In this instance, those previous notes would also be needed.
    An example (not all inclusive) of the pertinent parts of the 
medical record would be beneficiary X recently sustained traumatic 
amputation of his right leg below the knee and his right arm below the 
elbow as a result of an automobile accident. He also sustained 
significant lacerations to his left foot, which is extensively scarred. 
Prior to the trauma, beneficiary X had been an active retiree. Lacking 
sufficient ambulation to move about his home, patient X has used a 
bedside commode and is dependent on others to bring food to his 
bedroom. He is eager to regain independent mobility, and requests a PMD 
during a follow-up examination with his treating physician. Based on 
his knowledge of the beneficiary's prior medical history and his 
assessment of the beneficiary's current condition, using his clinical 
judgment the physician decides to prescribe a power wheelchair. The 
physician's knowledge of the provisions of the Mobility Assistive 
Equipment (MAE) National Coverage Decision (NCD) (available at http://www.cms.hhs.gov/manuals/pm_trans/R37NCD.pdf) informs his discussion of 
available options with the beneficiary. The physician believes that the 
beneficiary would not be able to safely operate a POV. The physician 
writes a prescription with the required information including the 
description of the device (i.e., a power wheelchair). The Subjective 
section of the physician's progress note for the face-to-face 
examination summarizes the history of the automobile accident, 
subsequent hospitalization and surgical revision and closure of the 
amputation stumps. The patient's request of the device is also 
mentioned. In the Objective findings, the physician notes the 
beneficiary's general appearance and the absence of the amputated arm 
and leg. The function of the remaining extremities is noted, including 
movement and strength in the remaining left arm and left leg. The 
Assessment includes the physician's determination that the beneficiary 
cannot ambulate sufficiently to get beyond his bedroom, and that 
mobility devices other than a power wheelchair are not sufficient to 
correct the deficit, and the Plan indicates the prescription of a power 
wheelchair, with a notation that the beneficiary's home environment 
does not prevent the appropriate use of the device. Believing the 
progress notes sufficiently present the rationale for prescription of 
the device, the physician instructs the office staff to send a copy of 
the progress notes along with the prescription to the supplier.
    Another example (not all inclusive) of the pertinent parts of the 
medical record would be beneficiary Y lives in a small rural town. He 
developed heart failure after a myocardial infarction earlier in the 
year, for which he had been transported by air to the state's 
university medical center 75 miles away. His medical history also 
includes hypertension, mild osteoarthritis, and gastroesophageal 
reflux. He is treated medically for his cardiac condition by his 
cardiologist at the university medical center. He sees his primary care 
physician in town for his other medical conditions. The cardiologist 
maintains good contact with the primary care physician, routinely 
sharing copies of his test results and chart notes. Over the past few 
months, beneficiary Y has complained progressively of difficulty 
walking due to fatigue. The cardiologist is aware of this and has 
adjusted his medications accordingly and added home oxygen to his 
regimen. The beneficiary phones his primary care physician, who he last 
saw two months ago, with a request for a POV.
    Beneficiary Y's primary physician schedules a home visit to examine 
him after office hours. He notes that the home is a one story rambler 
and that the halls and doorways are wide enough to allow the use of a 
POV. The beneficiary's physical examination findings at rest are 
consistent with his heart failure diagnosis, but do not seem severe 
enough to prevent the beneficiary from walking short distances in his 
home. The physician knows from experience that the severity of the 
symptoms and signs of heart failure can vary over the course of the day 
and with exertion. The physician asks the beneficiary to stand and walk 
from the bedroom to the dining room, a distance of 20 feet. The 
beneficiary stops after a few steps, saying he needs to catch his 
breath. Patient Y continues to walk slowly, but manages to get to the 
dining room after about a minute. Based on his knowledge of the 
beneficiary's prior medical history and his assessment of the 
beneficiary's current condition, the physician decides that the 
beneficiary needs a PMD and that other mobility devices are not 
sufficient to correct his mobility deficits to perform mobility related 
activities of daily living in his home. The physician's knowledge of 
the provisions of the Mobility Assistive Equipment (MAE) NCD informs 
his discussion of available options with the beneficiary. The physician 
believes that the patient has adequate strength and stability to safely 
operate a POV.
    The Subjective section of the physician's progress note for the 
home visit briefly notes the history of cardiac disease, and refers to 
the cardiologist's notes for more details. The beneficiary's request 
for the device is also mentioned. In the Objective findings, the 
physician notes the beneficiary's general appearance and the physical 
examination findings including the patient's attempt to walk to the 
dining room. Basic information about the beneficiary's home setting is 
also included. The Assessment includes the physician's determination 
that the patient cannot ambulate adequately, and that his cardiac 
symptoms are worsened by the exertion of ambulation. The Plan indicates 
the prescription of a POV with a notation that the beneficiary's home 
environment does not prevent the appropriate use of the device. 
Believing that the progress note alone does not sufficiently present 
the rationale for the prescription of the device, the physician 
instructs the office staff to send the prescription and additional 
records to the supplier, including copies of the cardiologist's notes, 
echocardiogram

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and cardiac stress test results, and arterial blood gas results.
     Physicians, treating practitioners, and suppliers must 
comply with all applicable Federal laws and regulations, including the 
HIPAA Privacy Rule. Any physician, treating practitioner or supplier 
that is a HIPAA covered entity must meet the relevant HIPAA Privacy 
Rule requirements, including the minimum necessary standard, when 
disclosing the supporting documentation and requested additional 
information. The physician, treating practitioner or supplier that is a 
HIPAA covered entity should make sure to redact any materials that may 
be contained within the medical record that are not necessary to 
support the prescription. For example, a gynecologic report would not 
be needed in the records submitted for a beneficiary whose clinical 
need for a PMD is based solely on disability secondary to a stroke.
     The supplier must obtain the prescription and supporting 
documentation prior to dispensing the PMD.
     Upon request, suppliers must submit to CMS or its agents 
the PMD prescription and supporting documentation that they received 
from the physician or treating practitioner.
     Upon request, suppliers must submit additional 
documentation if the PMD prescription and supporting documentation are 
not sufficient to determine that the PMD is reasonable and necessary. 
Additional documentation may include physician office records, hospital 
records, nursing home records, home health agency records, records from 
other healthcare professionals, and test reports. This documentation 
does not need to be submitted with every claim, but must be made 
available to CMS or its agent upon request.
     The PMD must meet any safety requirements specified by 
CMS.

III. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble and, when we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority, under which the rule is proposed, and the terms and 
substance of the proposed rule or a description of the subjects and 
issues involved. This procedure can be waived, however, if an agency 
finds good cause that a notice-and-comment procedure is impracticable, 
or contrary to the public interest, and if the agency incorporates a 
statement of this finding and supporting reasons in the rule issued.
    Since this change conforms our regulations to section 
1834(a)(1)(E)(iv) of the Act, we believe it would be contrary to the 
public interest to delay implementing this beneficiary relief pending 
notice-and-comment procedure. The Congress has prohibited Medicare from 
paying for covered items consisting of motorized or power wheelchairs 
unless a physician (as defined in section 1861(r)(1)), a physician 
assistant, nurse practitioner, or a clinical nurse specialist (as those 
terms are defined in section 1861(aa)(5)) conducts a face-to-face 
examination of the beneficiary and writes a prescription for the item. 
We believe that the face-to-face examination and prescription 
requirements are mandated by section 302(a)(2)(E)(iv) of the MMA and 
involve little exercise of agency discretion. Therefore, we believe 
that notice and comment procedure are unnecessary with respect to these 
provisions. In addition, this rule removes a current regulatory 
restriction that limits POV prescribing to certain specialists. We 
believe that this limitation is inconsistent with the MMA, which 
expressly allows a physician, physician assistant, nurse practitioner 
or a clinical nurse specialist to prescribe a PMD, and we believe that 
removing this limitation will increase beneficiary access to the 
appropriate PMD for his or her medical condition. Moreover, because CMS 
and the OIG have concluded that fraudulent billing practices for PMDs 
have been a substantial problem, evidenced by an approximate 350 
percent increase in billings for these devices in 1999 to 2003, we 
believe that it would be contrary to the public interest to delay a 
regulation intended to stem the abusive billing practices of certain 
DME suppliers. We believe that requiring the physician or treating 
practitioner to submit to the DME supplier the prescription along with 
the pertinent parts of the medical record that demonstrate the medical 
necessity for the PMD, and the requirement that the supplier must 
obtain the prescription and supporting documentation prior to 
dispensing the PMD will address some of these abusive billing practices 
by restraining the billing for PMDs outside of bona fide patient care 
activity. The additional payment to the physician or treating 
practitioner is consistent with these changes.
    On May 5, 2005, CMS issued a new National Coverage Decision (NCD) 
for Mobility Assistive Equipment, which includes power mobility 
devices. In addition, in September 2005, the Certificate of Medical 
Necessity (CMN) for power wheelchairs and POVs will expire. These 
changes, plus the changes made by MMA and through this regulation will 
provide greater certainty in this area and assist suppliers of PMDs in 
complying with not only the mandates of MMA but also the new NCD. 
Specifically, new requirements for specific content of the written 
prescription, the submission of pertinent portions of the medical 
record, and the submission of additional supporting information, 
together with elimination of the CMN, and the additional payment, 
operationalize the NCD requirements and statutory changes in ways that 
will not only bring more certainty to all participants, but also 
greatly reduce the risk that a supplier will be denied payment through 
no fault of its own. Delaying any element of these interrelated changes 
will jeopardize the smooth implementation of these reforms.
    Therefore, we find good cause to waive the notice of proposed 
rulemaking and to issue this as an interim final rule. We are providing 
a 90-day public comment period.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide a 30-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 (PRA) requires that we solicit comments on the following 
issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the

[[Page 50944]]

affected public, including automated collection techniques.
    To be able to address public comments on these information 
collection requirements prior to the effective date of this rule, 
written comments and recommendations will be considered from the public 
if received by the individuals designated below by September 26, 2005.
    We are soliciting public comment on each of these issues for the 
following section of this document that contains information collection 
requirements:


Section 410.38  Durable medical equipment: Scope and conditions.

Certificate of Medical Necessity (CMN) Discussion

    The Certificate of Medical Necessity (CMN) was previously 
established to allow efficient adjudication of claims by automating the 
submission of certain information needed to make medical necessity 
determinations. CMS implemented a CMN requirement for certain items of 
DME under section 1834(j)(2) of the Act and applied that requirement to 
payment claims for manual wheelchairs, motorized wheelchairs and power-
operated vehicles (scooters) since the items were potentially subject 
to abuse by unscrupulous DME suppliers. The historical coverage 
criteria for these items were subjective and interpreted differently by 
clinicians; services that were not medically necessary were described 
in a manner that made those services appear to be medically necessary. 
The CMN was created to eliminate some of the subjectivity associated 
with this decision making process.
    Recently, a CMS contractor completed an analysis of the utility of 
each CMN and found in some cases a 45 percent rate of non-compliance of 
CMNs. This finding underscored the belief that the CMNs do not 
accurately reflect the contents of the physician's medical record. Some 
portion of this non-compliance is attributed to failure to fully 
understand coverage criteria.
    With the publication of the national coverage determination on 
Mobility Assistive Equipment in May 2005, CMS provided guidance on how 
contractors are to determine whether PMDs have been appropriately 
prescribed. As a result, physicians, treating practitioners and 
suppliers better know how to properly evaluate and document a 
beneficiary's medical condition and appropriately prescribe PMDs. 
Therefore, we have determined that the practical utility of a CMN, 
given the function-based approach to coverage, is questionable and for 
these reasons, the continued use of a CMN for power wheelchairs or 
power-operated vehicles is no longer required.
    CMS previously estimated that the burden associated with the 
completion and collection of the CMNs for power mobility devices as 
38,192 hours or approximately 12 minutes per CMN. This burden estimate 
included the time required for physicians to extract data from the 
medical record, record that on the CMN, and forward the CMN to the 
supplier. It did not include the burden of the physician writing the 
prescription itself. It included the time required for the supplier to 
determine, when a beneficiary was seen for a PMD, whether a CMN had 
been submitted and, if so, whether it contained the necessary physician 
information; to notify the physician if additional information was 
needed; to collect and enter the supplier information on the CMN; and 
to store the CMN. Eliminating the CMN results in the elimination of 
this burden for both physicians and suppliers.
    Section 410.38(c)(2)(ii) states that Medicare Part B will pay for a 
power mobility device if the physician or treating practitioner writes 
a prescription, which is received by the supplier within 30 days after 
the date of the face-to-face examination of the beneficiary. The burden 
associated with writing the prescription is the time and effort 
necessary for the physician or treating practitioner to draft a 
prescription that contains the information required by this regulation. 
CMS estimates that it will take approximately 2 minutes for the 
physician or treating practitioner to prepare and submit the 
prescription, and that 187,000 PMD prescriptions will be submitted each 
year, for a total annual burden of 187,000 x 2 / 60 = 6,233 hours.
    Section 410.38(c)(2)(iii) requires physicians and treating 
practitioners to collect and submit to suppliers supporting 
documentation from the beneficiary's medical records which demonstrates 
that the item being provided is medically necessary. This is in 
addition to writing and submitting the prescription to the supplier. 
Section 410.38(c)(5)(i) requires a supplier to maintain a copy of the 
PMD prescription and supporting documentation to support its claim for 
payment for the prescribed PMD and to make this information available 
to CMS and its agents upon request. CMS believes that this overall 
physician and supplier burden is similar to the burden we previously 
estimated for a CMN.
    The burden includes physicians identifying parts of the medical 
record, having them copied, and giving them to the beneficiary with the 
prescription. In some instances, the physician might need to submit 
additional information at the request of the supplier. On the supplier 
side, the burden includes receiving the documentation, reviewing the 
documentation to ensure it is complete, and storing the documentation. 
In some instances, the supplier may determine that the medical record 
documentation may not be sufficient to meet CMS documentation 
requirements and may request that the physician submit more information 
such as additional chart notes which document medical history.
    Overall, as discussed above, we believe that there will be a shift 
in the burden of information collection from the supplier to the 
physician. CMS estimates that this combined burden will be no more than 
10 minutes. We have previously estimated that 187,000 prescriptions for 
these devices will be written yearly. This will result in an estimated 
burden of 31,167 hours (187,000 prescriptions x 10 minutes / 60).
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following: Centers for 
Medicare & Medicaid Services, Office of Strategic Operations and 
Regulatory Affairs, Regulations Development Group, Attn.: William N. 
Parham, III, CMS-3017-IFC, Room C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850; and Office of Information and Regulatory 
Affairs, Office of Management and Budget, Room 10235, New Executive 
Office Building, Washington, DC 20503, Attn: Christopher Martin, CMS 
Desk Officer, CMS-3017-IFC, [email protected]. Fax (202) 
395-6974.

VI. Regulatory Impact Statement

    We have examined the impact of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), the 
Congressional Review Act, 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

[[Page 50945]]

economic, environmental, public health and safety effects, distributive 
impacts, and equity). A regulatory impact analysis (RIA) must be 
prepared for rules with economically significant effects ($100 million 
or more in any 1 year). The Congressional Review Act imposes a similar 
requirement, and provides for the Congress to review major rules.
    In analyzing the effects of this regulation, we believe that most 
physicians are already conducting a face-to-face examination before 
prescribing a wheelchair. Also, though treating practitioners are now 
allowed to prescribe PMDs, we do not believe that these changes will 
significantly alter the number of prescriptions for PMDs. This rule 
also removes the requirement that a specialist order a POV. Given that 
physicians and treating practitioners can now prescribe POVs, we 
believe as a result of this regulation that more PMD prescriptions will 
be for POVs, rather than the more expensive power wheelchairs. In 
addition, in conjunction with this rule, an additional payment will be 
made to physicians and treating practitioners for the submission of the 
written prescription and pertinent parts of the medical record to the 
DME supplier. Taken together, we believe that the impact of these 
changes as a result of this regulation will have minimal net impact on 
the Medicare program.
    While we believe that the net impact on Medicare reimbursements for 
PMDs of this rule and the recently published NCD will be minimal, the 
provisions of this rule will likely cause a shift in the composition of 
the PMDs reimbursed by Medicare. We expect that this rule will result 
in a shift in PMD prescriptions from power wheelchairs to POVs. We have 
no empirical basis for projecting shifts in market share. Nor do we 
have a basis for discriminating between the shift that is the result of 
the NCD and the shift that is a result of this rule. However, we 
believe that the Congressional decision to allow a broader range of 
physicians and treating practitioners to prescribe POVs will lead to an 
increased number of POV prescriptions. This shift could well be 10 
percent or greater. If 10 percent or more of the estimated 175,000 
power wheelchair prescriptions in FY 2004 shifted from power 
wheelchairs to POVs (with the total unchanged at 187,000 prescriptions 
for both categories of PMDs), this would imply reduced sales for the 
former of $84 million (assuming an average cost of $4,800) and 
increased sales of the latter of $35M (assuming an average cost of 
$2,000). Accordingly, we are classifying this as an economically 
significant rule under EO 12866, and as a major rule under the 
Congressional Review Act.
    Under the Executive Order, we analyze the benefits, costs, and 
alternatives of major rules. While difficult to quantify, we believe 
that Medicare beneficiaries will benefit from the increased ability to 
obtain POVs. Beneficiaries would gain both from the increased utility 
of the less cumbersome devices, and from reduced cost-sharing (on 
average, $560 in decreased coinsurance if average costs of the devices 
were $2,000 and $4,800, respectively). We expect the shift in the 
composition of prescriptions to result in a net minimal impact on the 
value of Medicare reimbursements for PMDs. Since manufacturers 
typically produce both types of PMDs (other than specialty ``high end'' 
manufacturers unaffected by this rule), we expect the net effect on PMD 
manufacturer revenue from Medicare reimbursement of PMDs should be 
negligible.
    There are other costs and benefits. Taxpayers, suppliers, and 
patients will all gain from increased accuracy in prescribing and 
increased certainty of proper payment. The increased burden on 
physicians and treating practitioners from the new analytic and 
documentation requirements will be offset by the new add-on payment we 
are implementing with this rule. As discussed in the preceding PRA 
analysis, suppliers will face decreases in record-keeping requirements. 
None of these other effects are economically substantial (for example, 
increased payments to physicians and treating practitioners are likely 
to be on the order of $5 million annually). As a result, we believe 
that the predominant effects of this rule are both positive and 
substantial, and that the benefits of this rule outweigh its costs.
    We do not believe that any reasonable alternatives exist that would 
alter these conclusions or lead to even larger economic benefits. The 
primary causes of these effects were the Congressional decisions to 
allow a substantial increase in the number and types of providers 
allowed to prescribe POVs, and to require a face-to-face examination. 
We are required to implement those statutory changes. Coupled with our 
recent national coverage decision, other implementing details in this 
rule (especially improved documentation for suppliers), and other 
planned reforms (physician and treating practitioner payments, improved 
classification of mobility assistive equipment, elimination of the 
CMN), we expect the needs of mobility-impaired beneficiaries to be 
better met, and the needs of suppliers to be better met, than under any 
alternative set of reforms.
    We welcome additional information on the likely effects of this 
rule, and suggestions for changes that would improve the rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million in any 1 year. Individuals and States are not 
included in the definition of a small entity. We have determined that 
this rule will not have a significant economic impact on a substantial 
number of small entities. Furthermore, the RFA does not require such 
analysis for rules that, like this one, do not require a proposed rule.
    However, we appreciate that there are three classes of small 
entities that will face impacts and we address their potential 
concerns. Furthermore, HHS policy is to voluntarily analyze impacts on 
small entities if there is even a possibility of significant impact. 
The analysis that follows, together with the preceding impact analysis 
and other information in this preamble, constitutes an Initial 
Regulatory Flexibility Analysis.
    First, equipment manufacturers may be affected if substantial 
changes in the market for PMDs arise from this rule. As indicated 
previously, we expect the principal economic effect of this rule to be 
to shift prescriptions from one class of equipment, power wheelchairs, 
to another class of equipment, POVs. That effect will arise largely 
among those Medicare beneficiaries who can operate a POV and do not, 
therefore, require a power wheelchair. The manufacturing of these two 
types of equipment is dominated by a handful of firms. Most of these 
firms produce both types of vehicles and can presumably shift 
production from one line to another without incurring major cost. As 
indicated previously, volume increases likely to occur independently of 
this rule may obviate the need for any such shifts. Accordingly, we do 
not believe that the impact on these entities will be significant, nor 
that a substantial number of ``small'' entities will be affected. We 
note that there are a number of small firms that specialize in ``high 
end'' equipment for patients with very severe mobility impairments who 
need highly specialized equipment or accessories. We believe these 
firms will be unaffected by this rule, as the

[[Page 50946]]

segment of the market they serve would not be candidates for POVs.
    Second, physicians and treating practitioners gained a great deal 
of important new guidance through our recent national coverage 
decision. The newly added classes of treating practitioners will 
benefit in their ability to serve their patients by prescribing the 
equipment most suitable to their needs. Nonetheless, there is some 
inconvenience associated with more complex decision algorithms and the 
documentation requirements added by this rule. These costs do not rise 
to the level of ``significant'' within the standards of the RFA, but we 
nonetheless plan to ameliorate them through additional payment when 
PMDs are prescribed.
    Third, suppliers of durable medical equipment include thousands of 
firms, both large and ``small'' within the RFA definitions. The 
principal effect of this rule on these suppliers will be to increase 
their ability to assure that prescriptions are valid (in terms of 
medical necessity) before they supply equipment to beneficiaries, and 
that they will therefore be reimbursed for equipment they supply. This 
is a positive effect rather than a negative effect (the RFA requires 
consideration of alternatives that minimize adverse impacts). As 
previously indicated, we believe that there are few if any alternatives 
to this rule that would provide higher benefits.
    We welcome additional information on the problems faced by small 
entities, comments on these conclusions, and suggestions for changes 
that would provide even greater benefits.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 100 beds. We are not 
preparing an analysis for section 1102(b) of the Act because we have 
determined and the Secretary certifies that this rule will not have a 
significant impact on the operations of a substantial number of small 
rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits before issuing any 
rule whose requirements mandate the expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $100 million in 1995 dollars, adjusted for subsequent 
inflation (that threshold is now approximately $120 million). This rule 
contains no mandates other than that for documentation of 
prescriptions, and hence does not remotely approach that cost 
threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This regulation does not impose any costs or burden on 
State or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural 
areas, and X-rays.


0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR Chapter IV, as set forth below:

PART 410 SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
1. The authority citation for part 410 is revised to read as follows:

    Authority: Secs. 1102, 1834, and 1871 of the Social Security Act 
(42 U.S.C. 1302, 1395m, and 1395hh).

Subpart B--Medical and Other Health Services

0
2. Section 410.38 is amended by revising paragraph (c) to read as 
follows:


Sec.  410.38  Durable medical equipment: Scope and conditions.

* * * * *
    (c) Power mobility devices (PMDs). (1) Definitions. For the 
purposes of this paragraph (c), the following definitions apply:
    Physician has the same meaning as in section 1861(r)(1) of the Act.
    Power mobility device means a covered item of durable medical 
equipment that is in a class of wheelchairs that includes a power 
wheelchair (a four-wheeled motorized vehicle whose steering is operated 
by an electronic device or a joystick to control direction and turning) 
or a power-operated vehicle (a three or four-wheeled motorized scooter 
that is operated by a tiller) that a beneficiary uses in the home.
    Prescription means a written order completed by the physician or 
treating practitioner who performed the face-to-face examination and 
that includes, the beneficiary's name, the date of the face-to-face 
examination, the diagnoses and conditions that the PMD is expected to 
modify, a description of the item (for example, a narrative description 
of the specific type of PMD), the length of need, and the physician or 
treating practitioner's signature and the date the prescription was 
written.
    Treating practitioner means a physician assistant, nurse 
practitioner, or clinical nurse specialist as those terms are defined 
in section 1861(aa)(5) of the Act, who has conducted a face-to-face 
examination of the beneficiary.
    Supplier means a durable medical equipment (DME) supplier.
    (2) Conditions of payment. Medicare Part B pays for a power 
mobility device if the physician or treating practitioner, as defined 
in paragraph (c)(1) of this section:
    (i) Conducts a face-to-face examination of the beneficiary for the 
purpose of evaluating and treating the beneficiary for his or her 
medical condition and determining the medical necessity for the PMD as 
part of an appropriate overall treatment plan;
    (ii) Writes a prescription, as defined in paragraph (c)(1) of this 
section, which is provided to the beneficiary or supplier, and is 
received by the supplier within 30 days of the face-to-face 
examination.
    (iii) Provides supporting documentation, including pertinent parts 
of the beneficiary's medical record (e.g., history, physical 
examination, diagnostic tests, summary of findings, diagnoses, 
treatment plans and/or other information as may be appropriate) that 
supports the medical necessity for the power mobility device, which is 
received by the supplier within 30 days after the face-to-face 
examination.
    (3) Exceptions. (i) Beneficiaries discharged from a hospital do not 
need to receive a separate face-to-face examination as long as the 
physician or treating practitioner who performed the face-to-face 
examination of the beneficiary in the hospital issues a PMD 
prescription and supporting documentation that is received by the 
supplier within 30 days after the date of discharge.
    (ii) Accessories for PMDs may be ordered by the physician or 
treating practitioner without conducting a face-to-face examination of 
the beneficiary.
    (4) Dispensing a power mobility device. Suppliers may not dispense 
a

[[Page 50947]]

PMD to a beneficiary until the PMD prescription and the supporting 
documentation have been received from the physician or treating 
practitioner who performed the face-to-face examination of the 
beneficiary. Such documents must be received within 30 days after the 
date of the face-to-face examination.
    (5) Documentation. (i) A supplier must maintain the prescription 
and the supporting documentation provided by the physician or treating 
practitioner and make them available to CMS and its agents upon 
request.
    (ii) Upon request by CMS or its agents, a supplier must submit 
additional documentation to CMS or its agents to support and/or 
substantiate the medical necessity for the power mobility device.
    (6) Safety requirements. The PMD must meet any safety requirements 
specified by CMS.
* * * * *

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

    Dated: July 28, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.

    Dated: August 3, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-17098 Filed 8-24-05; 2:30 pm]
BILLING CODE 4120-01-P