[Federal Register Volume 76, Number 138 (Tuesday, July 19, 2011)]
[Proposed Rules]
[Pages 42772-42947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16972]



[[Page 42771]]

Vol. 76

Tuesday,

No. 138

July 19, 2011

Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 410, 414, 415 et al.





 Medicare Program; Payment Policies Under the Physician Fee Schedule 
and Other Revisions to Part B for CY 2012; Proposed Rule

Federal Register / Vol. 76, No. 138 / Tuesday, July 19, 2011 / 
Proposed Rules

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 414, 415, and 495

[CMS-1524-P]
RIN 0938-AQ25


Medicare Program; Payment Policies Under the Physician Fee 
Schedule and Other Revisions to Part B for CY 2012

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule addresses changes to the physician fee 
schedule and other Medicare Part B payment policies to ensure that our 
payment systems are updated to reflect changes in medical practice and 
the relative value of services. It also addresses, implements or 
discusses certain provisions of the Patient Protection and Affordable 
Care Act, as amended by the Health Care and Education Reconciliation 
Act of 2010 (collectively known as the Affordable Care Act) and the 
Medicare Improvements for Patients and Providers Act of 2008. In 
addition, this proposed rule discusses payments for Part B drugs; 
Physician Quality Reporting System; the Electronic Prescribing (eRx) 
Incentive Program; the Physician Resource-Use Feedback Program and the 
value modifier; productivity adjustment for ambulatory surgical center 
payment system and the ambulance, clinical laboratory, and durable 
medical equipment prosthetics orthotics and supplies (DMEPOS) fee 
schedules; and other Part B related issues. (See the Table of Contents 
for a listing of the specific issues addressed in this proposed rule.)

DATES: Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on August 30, 2011.

ADDRESSES: In commenting, please refer to file code CMS-1524-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the instructions for 
``submitting a comment.''
    2. By regular mail. You may mail written comments to the following 
address only:
    Centers for Medicare & Medicaid Services, Department of Health and 
Human Services, Attention: CMS-1524-P, P.O. Box 8013, Baltimore, MD 
21244-8013.
    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 to 
the following address only:
    Centers for Medicare & Medicaid Services,Department of Health and 
Human Services,Attention: CMS-1524-P,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 before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services,Department of Health and Human Services,Room 445-G, Hubert H. 
Humphrey Building,200 Independence Avenue, SW.,Washington, DC 20201.
    (Because access to the interior of the Hubert H. Humphrey 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.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services,Department of Health and Human Services,7500 Security 
Boulevard,Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-1066 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.

FOR FURTHER INFORMATION CONTACT:
    Ryan Howe, (410) 786-3355, for issues related to the physician fee 
schedule practice expense methodology, direct practice expense inputs, 
and telehealth services.
    Elizabeth Truong, (410) 786-6005, or Sara Vitolo, (410) 786-5714, 
for issues related to potentially misvalued services.
    Ken Marsalek, (410) 786-4502, for issues related the multiple 
procedure payment reduction and pathology services.
    Sara Vitolo, (410) 786-5714, for issues related to malpractice 
RVUs.
    Michael Moore, (410) 786-6830, for issues related to geographic 
practice cost indices.
    Elizabeth Truong, (410) 786-6005, for issues related to the 
sustainable growth rate, or the anesthesia or physician fee schedule 
conversion factors.
    Bonny Dahm, (410) 786-4006, for issues related to payment for 
covered outpatient drugs and biologicals.
    Claudia Lamm, (410) 786-3421, for issues related to the 
chiropractic services demonstration budget neutrality issue.
    Jamie Hermansen, (410) 786-2064, or Stephanie Frilling, (410) 786-
4507 for issues related to the annual wellness visit.
    Christine Estella, (410) 786-0485, for issues related to the 
physician quality reporting system, incentives for Electronic 
Prescribing (eRx) and Physician Compare.
    Gift Tee, (410) 786-9316, for issues related to the Physician 
Resource Use Feedback Program and physician value modifier.
    Stephanie Frilling, (410) 786-4507 for issues related to the 3-day 
Payment Window.
    Pam West, (410) 786-2302, for issues related to the technical 
corrections.
    Rebecca Cole or Erin Smith, (410) 786-4497, for issues related to 
physician payment not previously identified.

SUPPLEMENTARY INFORMATION: 
    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 comments 
received before the close of the comment period on the regulations.gov 
Web site (http://www.regulations.gov) as soon as possible after they 
have been received: Follow the search instructions on that Web site to 
view public comments.
    Comments received timely will also 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.

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Table of Contents

    To assist readers in referencing sections contained in this 
preamble, we are providing a table of contents. Some of the issues 
discussed in this preamble affect the payment policies, but do not 
require changes to the regulations in the Code of Federal Regulations 
(CFR). Information on the regulations impact appears throughout the 
preamble and, therefore, is not discussed exclusively in section VII. 
of this proposed rule.

I. Background
    A. Development of the Relative Value System
    1. Work RVUs
    2. Practice Expense Relative Value Units (PE RVUs)
    3. Resource-Based Malpractice RVUs
    4. Refinements to the RVUs
    5. Application of Budget Neutrality to Adjustments of RVUs
    B. Components of the Fee Schedule Payment Amounts
    C. Most Recent Changes to Fee Schedule
II. Provisions of the Proposed Rule for the Physician Fee Schedule
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    1. Overview
    2. Practice Expense Methodology
    a. Direct Practice Expense
    b. Indirect Practice Expense per Hour Data
    c. Allocation of PE to Services
    (1) Direct Costs
    (2) Indirect Costs
    d. Facility and Nonfacility Costs
    e. Services With Technical Components (TCs) and Professional 
Components (PCs)
    f. PE RVU Methodology
    (1) Setup File
    (2) Calculate the Direct Cost PE RVUs
    (3) Create the Indirect Cost PE RVUs
    (4) Calculate the Final PE RVUs
    (5) Setup File Information
    (6) Equipment Cost per Minute
    3. Changes to Direct PE Inputs
    a. Inverted Equipment Minutes
    b. Labor and Supply Input Duplication
    c. AMA RUC Recommendations for Moderation Sedation Direct PE 
Inputs
    d. Updates to Price and Useful Life for Existing Direct Inputs
    4. Development of Code-Specific PE RVUs
    5. Physician Time for Select Services
    B. Potentially Misvalued Services Under the Physician Fee 
Schedule
    1. Valuing Services Under the PFS
    2. Identifying, Reviewing, and Validating the RVUs of 
Potentially Misvalued Services Under the PFS
    a. Background
    b. Progress in Identifying and Reviewing Potentially Misvalued 
Codes
    c. Validating RVUs of Potentially Misvalued Codes
    3. Consolidating Reviews of Potentially Misvalued Codes
    4. Proposed Public Nomination Process
    5. CY 2012 Identification and Review of Potentially Misvalued 
Services
    a. Code Lists
    b. Specific Codes
    (1) Codes Potentially Requiring Updates to Direct PE Inputs
    (2) Codes Without Direct Practice Expense Inputs in the Non-
Facility Setting
    (3) Codes Potentially Requiring Updates to Physician Work
    6. Code-Specific Issues
    a. CY 2012 Codes With Site-of-Service Anomalies
    (1) Background
    (2) Revised Work RVUs for Codes With Site-of-Service Anomalies
    (A) Foot Arthrodesis
    (B) Submandibular Gland Excision
    (C) Urological Procedures
    (D) Epidural Lysis
    (E) Intrathecal Epidural Catheters and Pumps
    (F) Neurostimulators
    (G) Repair of Eye Wound
    b. Payment for Bone Density Tests
    C. Expanding the Multiple Procedure Payment Reduction (MPPR) 
Policy
    1. Background
    2. CY 2012 Expansion of the MPPR Policy to the Professional 
Component of Advance Imaging Services
    3. Further Expansion of the MPPR Under Consideration for Future 
Year
    D. Malpractice RVUs
    1. Overview of the Methodology for Calculation of Malpractice 
RVUs
    2. Proposed Revisions to Malpractice RVUs for Certain 
Cardiothoracic Surgery Services
    E. Geographic Practice Cost Indices (GPCIs)
    1. Background
    2. Proposed GPCI Revisions for CY 2012
    a. Physician Work GPCIs
    b. Practice Expense GPCIs
    (1) Affordable Care Act Analysis and Revisions for PE GPCIs
    (A) General Analysis for the CY 2012 PE GPCIs
    (B) Analysis of ACS Rental Data
    (C) Employee Wage Analysis
    (D) Purchased Services Analysis
    (E) Determining the PE GPCI Cost Share Weights
    (i) Practice Expense
    (ii) Employee Compensation
    (iii) Office Rent
    (iv) Purchased Services
    (v) Equipment, Supplies, and Other Misc Expenses
    (vi) Physician Work and Malpractice GPCIs
    (F) PE GPCI Floor for Frontier States
    (2) Summary of CY 2012 PE Proposal
    c. Malpractice GPCIs
    3. Payment Localities
    4. Report From the Institute of Medicine
III. Medicare Telehealth Services for the Physician Fee Schedule
    A. Billing and Payment for Telehealth Services
    1. History
    2. Current Telehealth Billing and Payment Policies
    B. Requests for Adding Services to the List of Medicare 
Telehealth Services
    C. Submitted Requests for Addition to the List of Telehealth 
Services for CY 2012
    1. Smoking Cessation Services
    2. Critical Care Services
    3. Domiciliary or Rest Home Evaluation and Management Services
    4. Genetic Counseling Services
    5. Online Evaluation and Management Services
    6. Data Collection Services
    7. Audiology Services
    D. The Process for Adding HCPCS Codes as Medicare Telehealth 
Services
    E. Telehealth Consultations in Emergency Departments
IV. Other Provisions of the Proposed Regulation
    A. Part B Drug Payment: Average Sales Price (ASP) Issues
    1. Widely Available Market Price (WAMP)/Average Manufacturer 
Price (AMP)
    2. AMP Threshold and Price Substitutions
    a. AMP Threshold
    b. AMP Price Substitution
    (1) Inspector General Studies
    (2) Proposal
    (3) Timeframe for and Duration of Price Substitutions
    3. ASP Reporting Update
    a. ASP Reporting Template Update
    b. Reporting of ASP Units and Sales Volume for Certain Products
    B. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    C. Proposed Productivity Adjustment for the Ambulatory Surgical 
Center Payment System, and the Ambulance, Clinical Laboratory and 
DMEPOS Fee Schedules
    D. Section 105: Extension of Payment for Technical Component of 
Certain Physician Pathology Services
    1. Background and Statutory Authority
    2. Proposed Revisions to Payment for TC of Certain Physician 
Pathology Services
    E. Section 4103 of the Affordable Care Act: Medicare Coverage 
and Payment of the Annual Wellness Visit Providing aPersonalized 
Prevention Plan Covered Under Medicare Part B
    1. Incorporation of a Health Risk Assessment as Part of the 
Annual Wellness Visit
    a. Background and Statutory Authority--Medicare Part B Coverage 
of an Annual Wellness Visit Providing Personalized Prevention Plan 
Services
    b. Implementation
    (1) Definition of a ``Health Risk Assessment''
    (2) Proposed Changes to the Definitions of First Annual Wellness 
Visit and Subsequent Annual Wellness Visit
    2. The Addition of a Health Risk Assessment as a Required 
Element for the Annual Wellness Visit Beginning in 2012
    a. Payment for AWV Services With the Inclusion of an HRA Element
    F. Quality Reporting Initiatives
    1. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    a. Program Background and Statutory Authority
    b. Methods of Participation
    (1) Individual Eligible Professionals
    (2) Group Practices
    (A) Background and Authority
    (B) Proposed Definition of Group Practice
    (C) Proposed Process for Physician Group Practices to 
Participate as Group Practices

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    c. Proposed Reporting Period
    d. Proposed Reporting Mechanisms--Individual Eligible 
Professionals
    (1) Claims-Based Reporting
    (2) Registry-Based Reporting
    (A) Proposed Requirements for the Registry-Based Reporting 
Mechanism--Individual Eligible Professionals
    (B) 2012 Proposed Qualification Requirements for Registries
    (3) EHR-Based Reporting
    (A) Direct EHRs
    (i) Proposed Requirements for the Direct EHR-Based Reporting 
Mechanism--Individual Eligible Professionals
    (ii) 2012 Proposed Qualification Requirements for Direct EHRs
    (B) EHR Data Submission Vendors
    (i) 2012 Proposed Qualification Requirements for EHR Data 
Submission Vendors
    (C) Proposed Qualification Requirements for EHR Direct and Data 
Submission Vendors and Their Products for the 2013 Physician Quality 
Reporting System
    e. Incentive Payments for the 2012 Physician Quality Reporting 
System
    (1) Proposed Criteria for Satisfactory Reporting of Individual 
Quality Measures for Individual Eligible Professionals via Claims
    (2) Proposed 2012 Criteria for Satisfactory Reporting of 
Individual Quality Measures for Individual Eligible Professionals 
via Registry
    (3) Proposed Criteria for Satisfactory Reporting of Individual 
Quality Measures for Individual Eligible Professionals via EHR
    (4) Proposed Criteria for Satisfactory Reporting of Measures 
Groups via Claims--Individual Eligible Professionals
    (5) Proposed 2012 Criteria for Satisfactory Reporting of 
Measures Groups via Registry--Individual Eligible Professionals
    (6) Proposed 2012 Criteria for Satisfactory Reporting on 
Physician Quality Reporting System Measures by Group Practices Under 
the GPRO
    f. 2012 Physician Quality Reporting System Measures
    (1) Statutory Requirements for the Selection of Proposed 2012 
Physician Quality Reporting System Measures
    (2) Other Considerations for the Selection of Proposed 2012 
Physician Quality Reporting System Measures
    (3) Proposed 2012 Physician Quality Reporting System Individual 
Measures
    (A) Proposed 2012 Physician Quality Reporting System Core 
Measures Available for Claims, Registry, and/or EHR-Based Reporting
    (B) Proposed 2012 Physician Quality Reporting System Individual 
Measures for Claims and Registry Reporting
    (C) Proposed 2012 Measures Available for EHR-Based Reporting
    (4) 2012 Physician Quality Reporting System Measures Groups
    (5) Proposed 2012 Physician Quality Reporting System Quality 
Measures for Group Practices Selected To Participate in the GPRO 
(GPRO)
    g. Maintenance of Certification Program Incentive
    h. Feedback Reports
    i. Informal Review
    j. Future Payment Adjustments for the Physician Quality 
Reporting System
    2. Incentives and Payment Adjustments for Electronic Prescribing 
(eRx)--The Electronic Prescribing Incentive Program
    a. Program Background and Statutory Authority
    b. Eligibility
    (1) Individual Eligible Professionals
    (A) Definition of Eligible Professional
    (2) Group practices
    (A) Proposed Definition of ``Group Practice''
    (B) Proposed Process To Participate in the eRx Incentive 
Program--eRx GPRO
    c. Proposed Reporting Periods
    (1) Proposed Reporting Periods for the 2012 and 2013 eRx 
Incentives
    (2) Proposed Reporting Periods for the 2013 and 2014 eRx Payment 
Adjustments
    d. Proposed Criteria for Determining Successful Electronic 
Prescribers
    (1) Reporting the Electronic Prescribing Quality Measure
    (2) The Reporting Denominator for the Electronic Prescribing 
Measure
    (3) The Numerator for the Electronic Prescribing Measure
    e. Required Functionalities and Part D Electronic Prescribing 
Standards
    (1) ``Qualified'' Electronic Prescribing System
    (2) Part D Electronic Prescribing Standards
    f. Proposed Reporting Mechanisms for the 2012 and 2013 Reporting 
Periods
    (1) Claims-Based Reporting
    (2) Registry-Based Reporting
    (3) EHR-Based Reporting
    g. The 2012 and 2013 eRx Incentives
    (1) Applicability of 2012 and 2013 eRx Incentives for Eligible 
Professionals and eRx GPROs
    (2) Proposed Reporting Criteria for Being a Successful 
Electronic for the 2012 and 2013 eRx Incentives--Individual Eligible 
Professionals
    (3) Proposed Criteria for Being a Successful Electronic 
Prescriber 2012 and 2013 eRx Incentives--Group Practices
    (4) No Double Payments
    h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
    (1) Proposed Limitations to the 2013 and 2014 eRx Payment 
Adjustments--Individual Eligible Professionals
    (2) Proposed Requirements for the 2013 and 2014 eRx Payment 
Adjustments--Individual Eligible Professionals
    (3) Proposed Requirements for the 2013 and 2014 eRx Payment 
Adjustments--Group Practices
    (4) Significant Hardship Exemptions
    (A) Proposed Significant Hardship Exemptions
    (i) Inability to Electronically Prescribe Due to Local, State, 
or Federal Law or Regulation
    (ii) Eligible Professionals Who Prescribe Fewer Than 100 
Prescriptions During a 6-Month, Payment Adjustment Reporting Period
    (B) Process for Submitting Significant Hardship Exemptions--
Individual Eligible Professionals
    G. Physician Compare Web Site
    1. Background and Statutory Authority
    2. Proposed Plans
    H. Medicare EHR Incentive Program for Eligible Professionals for 
the 2012 Payment Year
    1. Background
    2. The Proposed Physician Quality Reporting System-Medicare EHR 
Incentive Pilot
    a. EHR Data Submission Vendor-Based Reporting Option
    b. EHR-Based Reporting Option
    3. Method for EPs To Indicate Election To Participate in the 
Physician Quality Reporting System-Medicare EHR Incentive Pilot for 
Payment Year 2012
    I. Improvements to the Physician Feedback Program and 
Establishment of the Value-Based Payment Modifier (Effect of 
Sections 3003 and 3007 of the Affordable Care Act on the Program)
    1. Overview
    2. Background
    3. Future Considerations for Phase III Physician Feedback 
Program
    a. Phase III Physician Feedback Reports (Fall 2011) Feedback 
Program
    (1) Physician Group Reports
    (2) Reports to Individual Physicians
    b. Refinement of the Physician Feedback Program in 2011: 
Individual Physicians/Medical Group Practices/Specialties
    c. Beyond 2011: Future Scale Up and Dissemination for Increased 
Physician Feedback Reporting
    4. The Value-Based Payment Modifier: Section 3007 of the 
Affordable Care Act
    a. Measures of Quality of Care and Costs
    (1) Quality of Care Measures
    (A) Proposed Quality of Care Measures for the Value-Modifier
    (B) Potential Quality of Care Measures for Additional Dimensions 
of Care in the Value Modifier
    (i) Outcome Measures
    (ii) Care Coordination/Transition Measures
    (iii) Patient Safety, Patient Experience and Functional Status
    (2) Cost Measures
    (A) Proposed Cost Measures for the Value Modifier
    (B) Potential Cost Measures for Future Use in the Value Modifier
    b. Assessing Physician Performance and Applying the Value 
Modifier
    c. Dates for Implementation of the Value Modifier
    d. Initial Performance Period
    e. Other Issues
    (1) Systems-Based Care
    (2) Special Circumstances for Physicians in Rural Areas and 
Other Underserved Communities
    J. Bundling of Payments for Services Provided to Outpatients Who 
Later Are Admitted as Inpatients: 3-Day Payment Window Policy and 
the Impact on Wholly Owned or Wholly Operated Physician Practices
    1. Introduction
    2. Background

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    3. Applicability of the 3-Day Payment Window Policy for Services 
Furnished in Physician Practices
    a. Payment Methodology
    b. Identification of Wholly Owned or Wholly Operated Physician 
Practices
    K. Hospital Discharge Care Coordination
    L. Technical Corrections
    1. Outpatient Speech-Language Pathology Services: Conditions and 
Exclusions
    2. Outpatient Diabetes Self-Management Training and Diabetes 
Outcome Measurements
    a. Proposed Changes to the Definition of Deemed Entity
    b. Proposed Changes to the Condition of Coverage Regarding 
Training Orders
    3. Practice Expense Relative Value Units (RVUs)
V. Collection of Information Requirements
    A. Part B Drug Payment
    B. The Physician Quality Reporting System (formerly the 
Physician Quality Reporting Initiative (PQRI))
    C. Electronic Prescribing (eRx) Incentive Program
    D. Proposed Changes to the Medicare Electronic Health Record 
(EHR) Incentive Program for Eligible Professionals for the 2012 
Payment Year
VI. Response to Comments
    VII. Regulatory Impact Analysis
    A. Statement of Need
    B. Overall Impact
    C. RVU Impacts
    1. Resource-Based Work, PE, and Malpractice RVUs
    2. CY 2012 PFS Impact Discussion
    a. Changes in RVUs
    b. Combined Impact
    D. Effects of Proposal To Review Potentially Misvalued Codes on 
an Annual Basis Under the PFS
    E. Effect of Proposed Revisions to Malpractice RUVs
    F. Effect of Proposed Changes to Geographic Practice Cost 
Indices (GPCIs)
    G. Effects of Proposed Changes to Medicare Telehealth Services 
Under the Physician Fee Schedule
    H. Effects of Impact of Other Provisions of the Proposed Rule
    1. Part B Drug Payment: ASP Issues
    2. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    3. Extension of Payment for Technical Component of Certain 
Physician Pathology Services
    4. Section 4103: Medicare Coverage of Annual Wellness Visit 
Providing a Personalized Prevention Plan: Incorporation of a Health 
Risk Assessment as Part of the Annual Wellness Visit.
    5. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    6. Incentives for Electronic Prescribing (eRx)--The Electronic 
Prescribing Incentive Program
    7. Physician Compare Web Site
    8. Medicare EHR Incentive Program
    9. Physician Feedback Program/Value Modifier Payment
    10. Bundling of Payments for Services Provided to Outpatients 
Who Later Are Admitted as Inpatients: 3-Day Payment Window Policy 
and the Impact on Wholly Owned or Wholly Operated Physician Offices
    I. Alternatives Considered
    J. Impact on Beneficiaries
    K. Accounting Statement
    L. Conclusion
VIII. Addenda Referenced in This Proposed Rule and Available Only 
Through the Internet on the CMS Web Site
    Regulations Text

Acronyms

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

AA--Anesthesiologist assistant
AACE--American Association of Clinical Endocrinologists
AACVPR--American Association of Cardiovascular and Pulmonary 
Rehabilitation
AADE--American Association of Diabetes Educators
AANA--American Association of Nurse Anesthetists
ABMS--American Board of Medical Specialties
ABN--Advanced Beneficiary Notice
ACC--American College of Cardiology
ACGME--Accreditation Council on Graduate Medical Education
ACLS--Advanced cardiac life support
ACP--American College of Physicians
ACR--American College of Radiology
ACS--American Community Survey
ADL--Activities of daily living
AED--Automated external defibrillator
AFROC--Association of Freestanding Radiation Oncology Centers
AFS--Ambulance Fee Schedule
AHA--American Heart Association
AHFS-DI--American Hospital Formulary Service-Drug Information
AHRQ--[HHS] Agency for Healthcare Research and Quality
AMA--American Medical Association
AMA RUC--[AMA's Specialty Society] Relative (Value) Update Committee
AMA-DE--American Medical Association Drug Evaluations
AMI--Acute Myocardial Infarction
AMP--Average Manufacturer Price
AO--Accreditation organization
AOA--American Osteopathic Association
APA--American Psychological Association
APC--Administrative Procedures Act
APTA--American Physical Therapy Association
ARRA--American Recovery and Reinvestment Act (Pub. L. 111-5)
ASC--Ambulatory surgical center
ASP--Average Sales Price
ASPE--Assistant Secretary of Planning and Evaluation (ASPE)
ASRT--American Society of Radiologic Technologists
ASTRO--American Society for Therapeutic Radiology and Oncology
ATA--American Telemedicine Association
AWP--Average wholesale price
AWV--Annual Wellness Visit
BBA--Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA--[Medicare, Medicaid and State Child Health Insurance Program] 
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BIPA--Medicare, Medicaid, and SCHIP Benefits Improvement Protection 
Act of 2000 (Pub. L. 106-554)
BLS--Bureau of Labor and Statistics
BMD--Bone mineral density
BMI--Body mass index
BN--Budget neutrality
BPM--Benefit Policy Manual
CABG--Coronary artery bypass graft
CAD--Coronary artery disease
CAH--Critical Access Hospital
CAHEA--Committee on Allied Health Education and Accreditation
CAP--Competitive acquisition program
CARE--Continuity Assessment Record and Evaluation
CBIC--Competitive Bidding Implementation Contractor
CBP--Competitive Bidding Program
CBSA--Core-Based Statistical Area
CDC--Centers for Disease Control and Prevention
CEM--Cardiac Event Monitoring
CF--Conversion Factor
CFC--Conditions for Coverage
CFR--Code of Federal Regulations
CKD--Chronic kidney disease
CLFS--Clinical laboratory fee schedule
CMA--California Medical Association
CMD--Contractor Medical Director
CME--Continuing medical education
CMHC--Community Mental Health Center
CMPs--Civil money penalties
CMS--Centers for Medicare & Medicaid Services
CNS--Clinical Nurse Specialist
CoP--Condition of participation
COPD--Chronic obstructive pulmonary disease
CORF--Comprehensive Outpatient Rehabilitation Facility
COS--Cost of service
CPEP--Clinical Practice Expert Panel
CPI--Consumer Price Index
CPI-U Consumer price index for urban consumers
CPR--Cardiopulmonary resuscitation
CPT--[Physicians] Current Procedural Terminology (4th Edition, 2002, 
copyrighted by the American Medical Association)
CQM--Clinical quality measures
CR--Cardiac rehabilitation
CRF--Chronic Renal Failure
CRNA--Certified registered nurse anesthetist
CROs--Clinical research organizations
CRP--Canalith repositioning
CRT--Certified respiratory therapist
CSC--Computer Sciences Corporation
CSW--Clinical social worker
CT--Computed Tomography
CTA--Computed Tomography Angography
CWF--Common Working File
CY--Calendar Year
D.O.--Doctor of Osteopathy
DEA--Drug Enforcement Agency
DHHS--Department of Health and Human Services
DHS--Designated health services

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DME--Durable Medical Equipment
DMEPOS--Durable medical equipment, prosthetics, orthotics, and 
supplies
DOJ--Department of Justice
DOQ--Doctors Office Quality
DOS--Date of service
DOTPA--Development of Outpatient Therapy Alternatives
DRA--Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT--Diabetes Self-Management Training Services
DXA CPT--Dual energy X-ray absorptiometry
E/M--Evaluation and Management Medicare Services
ECG--Electrocardiogram
EDI--Electronic data interchange
EEG--Electroencephalogram
EGC--Electrocardiogram
EHR--Electronic health record
EKG--Electrocardiogram
EMG--Electromyogram
EMTALA--Emergency Medical Treatment and Active Labor Act
EOG--Electro-oculogram
EPO--Erythopoeitin
EPs--Eligible Professional
eRx--Electronic Prescribing
ESO--Endoscopy Supplies
ESRD--End-Stage Renal Disease
FAA--Federal Aviation Administration
FAX--Facsimile
FDA--Food and Drug Administration (HHS)
FFS--Fee-for-service
FISH--In Situ Hybridization Testing
FOTO--Focus On Therapeutic Outcomes
FQHC--Federally Qualified Health Center
FQHC--Federally Qualified Health Center
FR--Federal Register
FTE--full time equivalent
GAF--Geographic adjustment factor
GAFs--Geographic Adjustment Factors
GAO--Government Accountability Office
GEM--Generating Medicare [Physician Quality Performance Measurement 
Results]
GFR--Glomerular filtration rate
GME--Graduate Medical Education
GPCIs--Geographic Practice Cost Indices
GPO--Group purchasing organization
GPOs--Group purchasing organizations
GPRO--Group Practice Reporting Option
GPS--Geographic Positioning System
GQ--Via asynchronous telecommunications system
GSA--General Services Administration
GT--Growth Target
HAC--Hospital-acquired conditions
HBAI--Health and Behavior Assessment and Intervention
HCC--Hierarchal Condition Category
HCPAC--Health Care Professionals Advisory Committee
HCPCS--Healthcare Common Procedure Coding System
HCRIS--Healthcare Cost Report Information System
HDL/LDL--High-density lipoprotein/Low-density lipoprotein
HDRT--High dose radiation therapy
HEMS--Helicopter Emergency Medical Services
HH PPS--Home Health Prospective Payment System
HHA--Home health agency
HHRG--Home health resource group
HHS--[Department of] Health and Human Services
HIPAA--Health Insurance Portability and Accountability Act of 1996 
(Pub. L. 104-191)
HIT--Health information technology
HITECH--Health Information Technology for Economic and Clinical 
Health Act (Title IV of Division B of the Recovery Act, together 
with Title XIII of Division A of the Recovery Act)
HITSP--Healthcare Information Technology Standards Panel
HIV--Human immunodeficiency virus
HMO--Health Maintenance Organization
HOPD--Hospital outpatient department
HPSA--Health Professional Shortage Area
HRA--Health Risk Assessment
HRSA--Health Resources Services Administration (HHS)
HSIP--HPSA Surgical Incentive Program
HUD--Department of Housing and Urban Development
HUD--Housing and Urban Development
IACS--Individuals Access to CMS Systems
IADL--Instrumental activities of daily living
ICD--International Classification of Diseases
ICF--Intermediate care facilities
ICF--International Classification of Functioning, Disability and 
Health
ICR--Intensive cardiac rehabilitation
ICR--Information collection requirement
IDE--Investigational device exemption
IDTF--Independent diagnostic testing facility
IFC--Interim final rule with comment period
IGI--IHS Global Insight, Inc.
IME--Indirect Medical Education
IMRT--Intensity-Modulated Radiation Therapy
INR--International Normalized Ratio
IOM--Institute of Medicine
IOM--Internet Only Manual
IPCI--indirect practice cost index
IPPE--Initial preventive physical examination
IPPS--Inpatient prospective payment system
IRS--Internal Revenue Service
ISO--Insurance services office
IVD--Ischemic Vascular Disease
IVIG--Intravenous immune globulin
IWPUT--Intra-service work per unit of time
JRCERT--Joint Review Committee on Education in Radiologic Technology
KDE--Kidney Disease Education
LCD--Local coverage determination
LOPS--loss of protective sensation
LUGPA--Large Urology Group Practice Association
M.D.--Doctor of Medicine
MA--Medicare Advantage program
MAC--Medicare Administrative Contractor
MA-PD--Medicare Advantage-Prescription Drug Plans
MAV--Measure Applicability Validation
MCMP--Medicare Care Management Performance
MCP--Monthly Capitation Payment
MDRD--Modification of Diet in Renal Disease
MedCAC--Medicare Evidence Development and Coverage Advisory 
Committee (formerly the Medicare Coverage Advisory Committee (MCAC))
MedPAC--Medicare Payment Advisory Commission
MEI--Medicare Economic Index
MGMA--Medical Group Management Association
MIEA-TRHCA--Medicare Improvements and Extension Act of 2006 (that 
is, Division B) of the Tax Relief and Health Care Act of 2006 
(TRHCA) (Pub. L. 109-432)
MIPPA--Medicare Improvements for Patients and Providers Act of 2008 
(Pub. L. 110-275)
MMA--Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Pub. L. 108-173)
MMEA--Medicare and Medicaid Extenders Act of 2010 (Pub. L. 111-309)
MMSEA--Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 
110-173)
MNT--Medical Nutrition Therapy
MOC--Maintenance of certification
MP--Malpractice
MPC--Multispecialty Points of Comparison
MPPR--Multiple Procedure Payment Reduction Policy
MQSA--Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
MRA--Magnetic Resonance Angiography
MRI--Magnetic Resonance Imaging
MSA--Metropolitan Statistical Area
MSP--Medicare Secondary Payer
MUE--Medically Unlikely Edit
NAICS--North American Industry Classification System
NBRC--National Board for Respiratory Care
NCCI--National Correct Coding Initiative
NCD--National Coverage Determination
NCQA--National Committee for Quality Assurance
NCQDIS--National Coalition of Quality Diagnostic Imaging Services
NDC--National Drug Codes
NF--Nursing facility
NISTA--National Institute of Standards and Technology Act
NP--Nurse practitioner
NPI--National Provider Identifier
NPP--Nonphysician practitioner
NPPES--National Plan & Provider Enumeration System
NPPs--Nonphysician Practioners
NQF--National Quality Forum
NRC--Nuclear Regulatory Commission
NSQIP--National Surgical Quality Improvement Program
NTSB--National Transportation Safety Board
NUBC--National Uniform Billing Committee
OACT--[CMS] Office of the Actuary
OBRA--Omnibus Budget Reconciliation Act
OCR--Optical Character Recognition
ODF--Open door forum
OES--Occupational Employment Statistics
OGPE--Oxygen generating portable equipment
OIG--Office of the Inspector General
OMB--Office of Management and Budget
ONC--[HHS] Office of the National Coordinator for Health IT
OPPS--Outpatient prospective payment system
OSCAR--Online Survey and Certification and Reporting
PA--Physician Assistant
PACE--Program of All-inclusive Care for the Elderly
PACMBPRA--Preservation of Access to Care for Medicare Beneficiaries 
and Pension Relief Act of 2010 (Pub. L. 111-192)
PAT--Performance assessment tool

[[Page 42777]]

PC--Professional Components
PCI--Percutaneous coronary intervention
PCIP--Primary Care Incentive Payment Program
PDP--Prescription drug plan
PE--Practice Expense
PE/HR--Practice expense per hour
PEAC--Practice Expense Advisory Committee
PECOS--Provider Enrollment Chain and Ownership System
PERC--Practice Expense Review Committee
PFS--Physician Fee Schedule
PGP--[Medicare] Physician Group Practice
PHI--Protected health information
PHP--Partial hospitalization program
PIM--[Medicare] Program Integrity Manual
PLI--Professional liability insurance
POA--Present on admission
POC--Plan of care
PODs--Physician owned distributors
PPATRA--Physician Payment and Therapy Relief Act
PPI--Producer price index
PPIS--Physician Practice Expense Information Survey
PPPS--Personalized Prevention Plan Services
PPS--Prospective payment system
PPTA--Plasma Protein Therapeutics Association
PQRI--Physician Quality Reporting Initiative
PR--Pulmonary rehabilitation
PRA--Paperwork Reduction Act
PSA--Physician scarcity areas
PT--Physical therapy
PTA--Physical therapy assistant
PTCA--Percutaneous transluminal coronary angioplasty
PVBP--Physician and Other Health Professional Value-Based Purchasing 
Workgroup
QDCs--(Physician Quality Reporting System) Quality Data Codes
RA--Radiology assistant
RAC--Medicare Recovery Audit Contractor
RBMA--Radiology Business Management Association
RFA--Regulatory Flexibility Act
RHC--Rural Health Clinic
RHQDAPU--Reporting Hospital Quality Data Annual Payment Update 
Program
RIA--Regulatory impact analysis
RN--Registered nurse
RNAC--Reasonable net acquisition cost
RPA--Radiology practitioner assistant
RRT--Registered respiratory therapist
RUC--[AMA's Specialty Society] Relative (Value) Update Committee
RVRBS--Resource-Based Relative Value Scale
RVU--Relative Value Unit
SBA--Small Business Administration
SCHIP--State Children's Health Insurance Programs
SDW--Special Disability Workload
SGR--Sustainable growth rate
SLP--Speech-language pathology
SMS--Socioeconomic Monitoring Surveys
SMS--Monitoring Survey
SMS--[AMAs] Socioeconomic Monitoring System
SNF--Skilled Nursing Facility
SOR--System of record
SRS--Stereotactic radiosurgery
SSA--Social Security Administration
SSI--Social Security Income
STARS--Services Tracking and Reporting System
STATS--Short Term Alternatives for Therapy Services
STS--Society for Thoracic Surgeons
TC--Technical Components
TIN--Tax identification number
TJC--Joint Commission
TRHCA--Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
TTO--Transtracheal oxygen
UAF--Update Adjustment Factor
UPMC--University of Pittsburgh Medical Center
URAC--Utilization Review Accreditation Committee
USDE--United States Department of Education
USP-DI--United States Pharmacopoeia-Drug Information
VA--Department of Veterans Affairs
VBP--Value-based purchasing
WAC--Wholesale Acquisition Cost
WAMP--Widely available market price
WAMP--Widely Available Market Price
WHO--World Health Organization

Addenda Available Only Through the Internet on the CMS Web Site

    In the past, the Addenda referred to throughout the preamble of our 
annual PFS proposed and final rules with comment period were included 
in the printed Federal Register. However, beginning with the CY 2012 
PFS proposed rule, the PFS Addenda will no longer appear in the Federal 
Register. Instead these Addenda to the annual proposed and final rules 
with comment period will be available only through the Internet. The 
PFS Addenda along with other supporting documents and tables referenced 
in this proposed rule are available through the Internet on the CMS Web 
site at http://www.cms.gov/PhysicianFeeSched/. Click on the link on the 
left side of the screen titled, ``PFS Federal Regulations Notices'' for 
a chronological list of PFS Federal Register and other related 
documents. For the CY 2012 PFS proposed rule, refer to item CMS-1524-P. 
For complete details on the availability of the Addenda referenced in 
this proposed rule, we refer readers to section VIII. of this proposed 
rule. Readers who experience any problems accessing any of the Addenda 
or other documents referenced in this proposed rule and posted on the 
CMS Web site identified above should contact Erin Smith at (410) 786-
4497.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this proposed rule, we use CPT codes and descriptions to 
refer to a variety of services. We note that CPT codes and descriptions 
are copyright 2010 American Medical Association. All Rights Reserved. 
CPT is a registered trademark of the American Medical Association 
(AMA). Applicable Federal Acquisition Regulations (FAR) and Defense 
Federal Acquisition Regulations (DFAR) apply.

I. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Social Security Act (the Act), ``Payment for 
Physicians' Services.'' The Act requires that payments under the 
physician fee schedule (PFS) are based on national uniform relative 
value units (RVUs) based on the relative resources used in furnishing a 
service. Section 1848(c) of the Act requires that national RVUs be 
established for physician work, practice expense (PE), and malpractice 
expense. Before the establishment of the resource-based relative value 
system, Medicare payment for physicians' services was based on 
reasonable charges. We note that throughout this proposed rule, unless 
otherwise noted, the term ``practitioner'' is used to describe both 
physicians and nonphysician practitioners (such as physician 
assistants, nurse practitioners, clinical nurse specialists, certified 
nurse-midwives, psychologists, or social workers) that are permitted to 
furnish and bill Medicare under the PFS for their services.

A. Development of the Relative Value System

1. Work RVUs
    The concepts and methodology underlying the PFS were enacted as 
part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L. 
101-239), and OBRA 1990, (Pub. L. 101-508). The final rule, published 
on November 25, 1991 (56 FR 59502), set forth the fee schedule for 
payment for physicians' services beginning January 1, 1992. Initially, 
only the physician work RVUs were resource-based, and the PE and 
malpractice RVUs were based on average allowable charges.
    The physician work RVUs established for the implementation of the 
fee schedule in January 1992 was developed with extensive input from 
the physician community. A research team at the Harvard School of 
Public Health developed the original physician work RVUs for most codes 
in a cooperative agreement with the Department of Health and Human 
Services (DHHS). In constructing the code-specific vignettes for the 
original physician work RVUs, Harvard worked with panels of experts, 
both inside and outside the Federal government, and

[[Page 42778]]

obtained input from numerous physician specialty groups.
    Section 1848(b)(2)(B) of the Act specifies that the RVUs for 
anesthesia services are based on RVUs from a uniform relative value 
guide, with appropriate adjustment of the conversion factor (CF), in a 
manner to assure that fee schedule amounts for anesthesia services are 
consistent with those for other services of comparable value. We 
established a separate CF for anesthesia services, and we continue to 
utilize time units as a factor in determining payment for these 
services. As a result, there is a separate payment methodology for 
anesthesia services.
    We establish physician work RVUs for new and revised codes based, 
in part, on our review of recommendations received from the American 
Medical Association's (AMA's) Specialty Society Relative Value Update 
Committee (RUC).
2. Practice Expense Relative Value Units (PE RVUs)
    Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 
103-432), enacted on October 31, 1994, amended section 
1848(c)(2)(C)(ii) of the Act and required us to develop resource-based 
PE RVUs for each physicians service beginning in 1998. We were to 
consider general categories of expenses (such as office rent and wages 
of personnel, but excluding malpractice expenses) comprising PEs.
    Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33), amended section 1848(c)(2)(C)(ii) of the Act to delay 
implementation of the resource-based PE RVU system until January 1, 
1999. In addition, section 4505(b) of the BBA provided for a 4-year 
transition period from charge-based PE RVUs to resource-based RVUs.
    We established the resource-based PE RVUs for each physician's 
service in a final rule, published November 2, 1998 (63 FR 58814), 
effective for services furnished in 1999. Based on the requirement to 
transition to a resource-based system for PE over a 4-year period, 
resource-based PE RVUs did not become fully effective until 2002.
    This resource-based system was based on two significant sources of 
actual PE data: The Clinical Practice Expert Panel (CPEP) data and the 
AMA's Socioeconomic Monitoring System (SMS) data. The CPEP data were 
collected from panels of physicians, practice administrators, and 
nonphysician health professionals (for example, registered nurses 
(RNs)) nominated by physician specialty societies and other groups. The 
CPEP panels identified the direct inputs required for each physician's 
service in both the office setting and out-of-office setting. We have 
since refined and revised these inputs based on recommendations from 
the AMA RUC. The AMA's SMS data provided aggregate specialty-specific 
information on hours worked and PEs.
    Separate PE RVUs are established for procedures that can be 
performed in both a nonfacility setting, such as a physician's office, 
and a facility setting, such as a hospital outpatient department 
(HOPD). The difference between the facility and nonfacility RVUs 
reflects the fact that a facility typically receives separate payment 
from Medicare for its costs of providing the service, apart from 
payment under the PFS. The nonfacility RVUs reflect all of the direct 
and indirect PEs of providing a particular service.
    Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113) directed the Secretary of Health and Human Services 
(the Secretary) to establish a process under which we accept and use, 
to the maximum extent practicable and consistent with sound data 
practices, data collected or developed by entities and organizations to 
supplement the data we normally collect in determining the PE 
component. On May 3, 2000, we published the interim final rule (65 FR 
25664) that set forth the criteria for the submission of these 
supplemental PE survey data. The criteria were modified in response to 
comments received, and published in the Federal Register (65 FR 65376) 
as part of a November 1, 2000 final rule. The PFS final rules published 
in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended 
the period during which we would accept these supplemental data through 
March 1, 2005.
    In the calendar year (CY) 2007 PFS final rule with comment period 
(71 FR 69624), we revised the methodology for calculating direct PE 
RVUs from the top-down to the bottom-up methodology beginning in CY 
2007 and provided for a 4-year transition for the new PE RVUs under 
this new methodology. This transition ended in CY 2010 and direct PE 
RVUs are calculated in CY 2012 using this methodology, unless otherwise 
noted.
    In the CY 2010 PFS final rule with comment period (74 FR 61749), we 
updated the PE/hour (PE/HR) data that are used in the calculation of PE 
RVUs for most specialties. For this update, we used the Physician 
Practice Information Survey (PPIS) conducted by the AMA. The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) using a survey instrument and 
methods highly consistent with those of the SMS and the supplemental 
surveys used prior to CY 2010. We note that in CY 2010, for oncology, 
clinical laboratories, and independent diagnostic testing facilities 
(IDTFs), we continued to use the supplemental survey data to determine 
PE/HR values (74 FR 61752). Beginning in CY 2010, we provided for a 4-
year transition for the new PE RVUs using the updated PE/HR data. In CY 
2012, the third year of the transition, PE RVUs are calculated based on 
a 75/25 blend of the new PE RVUs developed using the PPIS data and the 
previous PE RVUs based on the SMS and supplemental survey data.
3. Resource-Based Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based malpractice RVUs for services 
furnished on or after CY 2000. The resource-based malpractice RVUs were 
implemented in the PFS final rule published November 2, 1999 (64 FR 
59380). The MP RVUs were based on malpractice insurance premium data 
collected from commercial and physician-owned insurers from all the 
States, the District of Columbia, and Puerto Rico. In the CY 2010 PFS 
final rule with comment period (74 FR 61758), we implemented the Second 
Five-Year Review and update of the malpractice RVUs. In the CY 2011 PFS 
final rule with comment period, we described our approach for 
determining malpractice RVUs for new or revised codes that become 
effective before the next Five Year Review and update (75 FR 73208). 
Accordingly, to develop the CY 2012 malpractice RVUs for new or revised 
codes we cross-walked the new or revised code to the malpractice RVUs 
of a similar source code and adjusted for differences in work (or, if 
greater, the clinical labor portion of the fully implemented PE RVUs) 
between the source code and the new or revised code.
4. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review all 
RVUs no less often than every 5 years. The First Five-Year Review of 
Work RVUs was published on November 22, 1996 (61 FR 59489) and was 
effective in 1997. The Second Five-Year Review of Work RVUs was 
published in the CY 2002 PFS final rule with comment period (66 FR 
55246) and was effective in 2002. The Third Five-Year Review of Work 
RVUs was published in the CY 2007 PFS final rule with comment period 
(71 FR 69624) and was effective on January 1,

[[Page 42779]]

2007. The Fourth Five-Year Review of Work RVUs was initiated in the CY 
2010 PFS final rule with comment period where we solicited candidate 
codes from the public for this review (74 FR 61941). Proposed revisions 
to work RVUs and corresponding changes to PE and malpractice RVUs 
affecting payment for physicians' services for the Fourth Five-Year 
Review of Work RVUs were published in a separate notice (76 FR 32410). 
We will review public comments, make adjustments to our proposals in 
response to comments, as appropriate, and include final values in the 
CY 2012 PFS final rule with comment period, effective for services 
furnished beginning January 1, 2012.
    In 1999, the AMA RUC established the Practice Expense Advisory 
Committee (PEAC) for the purpose of refining the direct PE inputs. 
Through March 2004, the PEAC provided recommendations to CMS for over 
7,600 codes (all but a few hundred of the codes currently listed in the 
AMA's Current Procedural Terminology (CPT) codes). As part of the CY 
2007 PFS final rule with comment period (71 FR 69624), we implemented a 
new bottom-up methodology for determining resource-based PE RVUs and 
transitioned the new methodology over a 4-year period. A comprehensive 
review of PE was undertaken prior to the 4-year transition period for 
the new PE methodology from the top-down to the bottom-up methodology, 
and this transition was completed in CY 2010. In CY 2010, we also 
incorporated the new PPIS data to update thespecialty specific PE/HR 
data used to develop PE RVUs, adopting a 4-year transition to PE RVUs 
developed using the PPIS data.
    In the CY 2005 PFS final rule with comment period (69 FR 66236), we 
implemented the First Five-Year Review of the malpractice RVUs (69 FR 
66263). Minor modifications to the methodology were addressed in the CY 
2006 PFS final rule with comment period (70 FR 70153). The Second Five-
Year Review and update of resource-based malpractice RVUs was published 
in the CY 2010 PFS final rule with comment period (74 FR 61758) and was 
effective in CY 2010.
    In addition to the Five-Year Reviews, beginning for CY 2009, CMS 
and the AMA RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis based on various identification 
screens. This annual review of work and PE RVUs for potentially 
misvalued codes was supplemented by section 3134 of the Affordable Care 
Act, which requires the agency to periodically identify, review and 
adjust values for potentially misvalued codes with an emphasis on the 
following categories: (1) Codes and families of codes for which there 
has been the fastest growth; (2) codes or families of codes that have 
experienced substantial changes in practice expenses; (3) codes that 
are recently established for new technologies or services; (4) multiple 
codes that are frequently billed in conjunction with furnishing a 
single service; (5) codes with low relative values, particularly those 
that are often billed multiple times for a single treatment; (6) codes 
which have not been subject to review since the implementation of the 
RBRVS (the so-called `Harvard valued codes'); and (7) other codes 
determined to be appropriate by the Secretary.
5. Application of Budget Neutrality to Adjustments of RVUs
    Budget neutrality typically requires that expenditures not increase 
or decrease as a result of changes or revisions to policy. However, 
section 1848(c)(2)(B)(ii)(II) of the Act requires adjustment only if 
the change in expenditures resulting from the annual revisions to the 
PFS exceeds a threshold amount. Specifically, adjustments in RVUs for a 
year may not cause total PFS payments to differ by more than $20 
million from what they would have been if the adjustments were not 
made. In accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if 
revisions to the RVUs cause expenditures to change by more than $20 
million, we make adjustments to ensure that expenditures do not 
increase or decrease by more than $20 million.

B. Components of the Fee Schedule Payment Amounts

    To calculate the payment for every physician's service, the 
components of the fee schedule (physician work, PE, and malpractice 
RVUs) are adjusted by a geographic practice cost index (GPCI). The 
GPCIs reflect the relative costs of physician work, PE, and malpractice 
in an area compared to the national average costs for each component.
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated by CMS' Office of the Actuary (OACT).
    The formula for calculating the Medicare fee schedule payment 
amount for a given service and fee schedule area can be expressed as:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU 
Malpractice x GPCI Malpractice)] x CF.

C. Most Recent Changes to the Fee Schedule

    The CY 2011 PFS final rule with comment period (75 FR 73170) 
implemented changes to the PFS and other Medicare Part B payment 
policies. It also finalized many of the CY 2010 interim RVUs and 
implemented interim RVUs for new and revised codes for CY 2011 to 
ensure that our payment systems are updated to reflect changes in 
medical practice and the relative values of services. The CY 2011 PFS 
final rule with comment period also addressed other policies, as well 
as certain provisions of the Affordable Care Act and the Medicare 
Improvements for Patients and Providers Act of 2008 (MIPPA).
    In the CY 2011 PFS final rule with comment period, we announced the 
following for CY 2011: the total PFS update of -10.1 percent; the 
initial estimate for the sustainable growth rate of -13.4 percent; and 
the CF of $25.5217. These figures were calculated based on the 
statutory provisions in effect on November 2, 2010, when the CY 2011 
PFS final rule was issued.
    On December 30, 2010, we published a correction notice (76 FR 1670) 
to correct several technical and typographical errors that occurred in 
the CY 2011 PFS final rule with comment period. This correction notice 
announced a revised CF for CY 2011 of $25.4999.
    On November 30, 2010, the Physician Payment and Therapy Relief Act 
of 2010 (PPATRA) (Pub. L. 111-286) was signed into law. Section 3 of 
Public Law 111-286 modified the policy finalized in the CY 2011 PFS 
final rule with comment period (75 FR 73241), effective January 1, 
2011, regarding the payment reduction applied to multiple therapy 
services provided to the same patient on the same day in the office 
setting by one provider and paid for under the PFS (hereinafter, the 
therapy multiple procedure payment reduction (MPPR)). The PPATRA 
provision changed the therapy MPPR percentage from 25 to 20 percent of 
the PE component of payment for the second and subsequent ``always'' 
therapy services furnished in the office setting on the same day to the 
same patient by one provider, and excepted the payment reductions 
associated with the therapy MPPR from budget neutrality under the PFS.
    On December 15, 2010, the Medicare and Medicaid Extenders Act of 
2010 (MMEA) (Pub. L. 111-309) was signed into law. Section 101 of 
Public Law 111-309 provided for a 1-year zero percent update for the CY 
2011 PFS. As a result of the MMEA, the CY 2011 PFS

[[Page 42780]]

conversion factor was revised to $33.9764.

II. Provisions of the Proposed Rule for the Physician Fee Schedule

A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing the service that reflects the general categories of 
physician and practitioner expenses, such as office rent and personnel 
wages but excluding malpractice expenses, as specified in section 
1848(c)(1)(B) of the Act. Section 121 of the Social Security Amendments 
of 1994 (Pub. L. 103-432), enacted on October 31, 1994, required us to 
develop a methodology for a resource-based system for determining PE 
RVUs for each physician's service. We develop PE RVUs by looking at the 
direct and indirect physician practice resources involved in furnishing 
each service. Direct expense categories include clinical labor, medical 
supplies, and medical equipment. Indirect expenses include 
administrative labor, office expense, and all other expenses. The 
sections that follow provide more detailed information about the 
methodology for translating the resources involved in furnishing each 
service into service-specific PE RVUs. In addition, we note that 
section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in 
RVUs for a year may not cause total PFS payments to differ by more than 
$20 million from what they would have been if the adjustments were not 
made. Therefore, if revisions to the RVUs cause expenditures to change 
by more than $20 million, we make adjustments to ensure that 
expenditures do not increase or decrease by more than $20 million. We 
refer readers to the CY 2010 PFS final rule with comment period (74 FR 
61743 through 61748) for a more detailed history of the PE methodology.
2. Practice Expense Methodology
a. Direct Practice Expense
    We use a bottom-up approach to determine the direct PE by adding 
the costs of the resources (that is, the clinical staff, equipment, and 
supplies) typically required to provide each service. The costs of the 
resources are calculated using the refined direct PE inputs assigned to 
each CPT code in our PE database, which are based on our review of 
recommendations received from the AMA RUC. For a detailed explanation 
of the bottom-up direct PE methodology, including examples, we refer 
readers to the Five-Year Review of Work Relative Value Units Under the 
PFS and Proposed Changes to the Practice Expense Methodology proposed 
notice (71 FR 37242) and the CY 2007 PFS final rule with comment period 
(71 FR 69629).
b. Indirect Practice Expense per Hour Data
    We use survey data on indirect practice expenses incurred per hour 
worked (PE/HR) in developing the indirect portion of the PE RVUs. Prior 
to CY 2010, we primarily used the practice expense per hour (PE/HR) by 
specialty that was obtained from the AMA's Socioeconomic Monitoring 
Surveys (SMS). The AMA administered a new survey in CY 2007 and CY 
2008, the Physician Practice Expense Information Survey (PPIS), which 
was expanded (relative to the SMS) to include nonphysician 
practitioners (NPPs) paid under the PFS.
    The PPIS is a multispecialty, nationally representative, PE survey 
of both physicians and NPPs using a consistent survey instrument and 
methods highly consistent with those used for the SMS and the 
supplemental surveys. The PPIS gathered information from 3,656 
respondents across 51 physician specialty and healthcare professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available to date. Therefore, we used the PPIS data 
to update the PE/HR data for almost all of the Medicare-recognized 
specialties that participated in the survey for the CY 2010 PFS.
    When we changed over to the PPIS data beginning in CY 2010, we did 
not change the PE RVU methodology itself or the manner in which the PE/
HR data are used in that methodology. We only updated the PE/HR data 
based on the new survey. Furthermore, as we explained in the CY 2010 
PFS final rule with comment period (74 FR 61751), because of the 
magnitude of payment reductions for some specialties resulting from the 
use of the PPIS data, we finalized a 4-year transition (75 percent old/
25 percent new for CY 2010, 50 percent old/50 percent new for CY 2011, 
25 percent old/75 percent new for CY 2012, and 100 percent new for CY 
2013) from the previous PE RVUs to the PE RVUs developed using the new 
PPIS data.
    Section 303 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) added section 
1848(c)(2)(H)(i) of the Act, which requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    We do not use the PPIS data for reproductive endocrinology, sleep 
medicine, and spine surgery since these specialties are not separately 
recognized by Medicare, nor do we have a method to blend these data 
with Medicare-recognized specialty data.
    Supplemental survey data on independent labs, from the College of 
American Pathologists, were implemented for payments in CY 2005. 
Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments in CY 2007. Neither IDTFs nor independent labs 
participated in the PPIS. Therefore, we continue to use the PE/HR that 
was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for medical oncology, independent 
laboratories, and IDTFs were updated to CY 2006 using the MEI to put 
them on a comparable basis with the PPIS data.
    Previously, we have established PE/HR values for various 
specialties without SMS or supplemental survey data by crosswalking 
them to other similar specialties to estimate a proxy PE/HR. For 
specialties that were part of the PPIS for which we previously used a 
crosswalked PE/HR, we instead use the PPIS-based PE/HR. We continue 
previous crosswalks for specialties that did not participate in the 
PPIS. However, beginning in CY 2010 we changed the PE/HR crosswalk for 
portable x-ray suppliers from radiology to IDTF, a more appropriate 
crosswalk because these specialties are more similar to each other with 
respect to physician time.
    For registered dietician services, the proposed resource-based PE 
RVUs have been calculated in accordance with the final policy that 
crosswalks the specialty to the ``All Physicians'' PE/HR data, as 
adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) 
and discussed in more detail in the CY 2011 PFS final rule with comment 
period (75 FR 73183).
    There are four specialties whose utilization data will be newly 
incorporated into ratesetting for CY 2012. We are proposing to use 
proxy

[[Page 42781]]

PE/HR values for these specialties by crosswalking values from other, 
similar specialties as follows: Speech Language Pathology from Physical 
Therapy; Hospice and Palliative Care from All Physicians; Geriatric 
Psychiatry from Psychiatry; and Intensive Cardiac Rehabilitation from 
Cardiology. Additionally, since section 1833(a)(1)(K) of the Act (as 
amended by section 3114 of the Affordable Care Act) requires that 
payment for services provided by a certified nurse midwife be paid at 
100 percent of the PFS amount, this specialty will no longer be 
excluded from the ratesetting calculation. We are proposing to 
crosswalk the PE\HR data from Obstetrics/gynecology to Certified Nurse 
Midwife. These newly proposed changes are reflected in the ``PE HR'' 
file available on the CMS Web site under the supporting data files for 
the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
    As provided in the CY 2010 PFS final rule with comment period (74 
FR 61751), CY 2012 is the third year of the 4 year transition to the PE 
RVUs calculated using the PPIS data. Therefore, in general, the CY 2012 
PE RVUs are a 25 percent/75 percent blend of the previous PE RVUs based 
on the SMS and supplemental survey data and the new PE RVUS developed 
using the PPIS data as described previously.
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, equipment, and supplies) typically required to provide the 
services. The costs of these resources are calculated from the refined 
direct PE inputs in our PE database. For example, if one service has a 
direct cost sum of $400 from our PE database and another service has a 
direct cost sum of $200, the direct portion of the PE RVUs of the first 
service would be twice as much as the direct portion of the PE RVUs for 
the second service.
(2) Indirect Costs
    Section II.A.2.b. of this proposed rule describes the current data 
sources for specialty-specific indirect costs used in our PE 
calculations. We allocate the indirect costs to the code level on the 
basis of the direct costs specifically associated with a code and the 
greater of either the clinical labor costs or the physician work RVUs. 
We also incorporate the survey data described earlier in the PE/HR 
discussion. The general approach to developing the indirect portion of 
the PE RVUs is described as follows:
     For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that perform the service to determine an initial indirect 
allocator. For example, if the direct portion of the PE RVUs for a 
given service were 2.00 and direct costs, on average, represented 25 
percent of total costs for the specialties that performed the service, 
the initial indirect allocator would be 6.00 since 2.00 is 25 percent 
of 8.00.
     We then add the greater of the work RVUs or clinical labor 
portion of the direct portion of the PE RVUs to this initial indirect 
allocator. In our example, if this service had work RVUs of 4.00 and 
the clinical labor portion of the direct PE RVUs was 1.50, we would add 
6.00 plus 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to get an indirect allocator of 10.00. In the 
absence of any further use of the survey data, the relative 
relationship between the indirect cost portions of the PE RVUs for any 
two services would be determined by the relative relationship between 
these indirect cost allocators. For example, if one service had an 
indirect cost allocator of 10.00 and another service had an indirect 
cost allocator of 5.00, the indirect portion of the PE RVUs of the 
first service would be twice as great as the indirect portion of the PE 
RVUs for the second service.
     We next incorporate the specialty-specific indirect PE/HR 
data into the calculation. As a relatively extreme example for the sake 
of simplicity, assume in our previous example that, based on the survey 
data, the average indirect cost of the specialties performing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties performing the second service with an indirect 
allocator of 5.00. In this case, the indirect portion of the PE RVUs of 
the first service would be equal to that of the second service.
d. Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a hospital or facility setting, we establish two PE RVUs: 
facility and nonfacility. The methodology for calculating PE RVUs is 
the same for both the facility and nonfacility RVUs, but is applied 
independently to yield two separate PE RVUs. Because Medicare makes a 
separate payment to the facility for its costs of furnishing a service, 
the facility PE RVUs are generally lower than the nonfacility PE RVUs.
e. Services With Technical Components (TCs) and Professional Components 
(PCs)
    Diagnostic services are generally comprised of two components: a 
professional component (PC) and a technical component (TC), each of 
which may be performed independently or by different providers, or they 
may be performed together as a ``global'' service. When services have 
PC and TC components that can be billed separately, the payment for the 
global component equals the sum of the payment for the TC and PC. This 
is a result of using a weighted average of the ratio of indirect to 
direct costs across all the specialties that furnish the global 
components, TCs, and PCs; that is, we apply the same weighted average 
indirect percentage factor to allocate indirect expenses to the global 
components, PCs, and TCs for a service. (The direct PE RVUs for the TC 
and PC sum to the global under the bottom-up methodology.)
f. PE RVU Methodology
    For a more detailed description of the PE RVU methodology, we refer 
readers to the CY 2010 PFS final rule with comment period (74 FR 61745 
through 61746).
(1) Setup File
    First, we create a setup file for the PE methodology. The setup 
file contains the direct cost inputs, the utilization for each 
procedure code at the specialty and facility/nonfacility place of 
service level, and the specialty-specific PE/HR data from the surveys.
(2) Calculate the Direct Cost PE RVUs
    Sum the costs of each direct input.
    Step 1: Sum the direct costs of the inputs for each service.
    Apply a scaling adjustment to the direct inputs.
    Step 2: Calculate the current aggregate pool of direct PE costs. 
This is the product of the current aggregate PE (aggregate direct and 
indirect) RVUs, the CF, and the average direct PE percentage from the 
survey data.
    Step 3: Calculate the aggregate pool of direct costs. This is the 
sum of the product of the direct costs for each service from Step 1 and 
the utilization data for that service.

[[Page 42782]]

    Step 4: Using the results of Step 2 and Step 3 calculate a direct 
PE scaling adjustment so that the aggregate direct cost pool does not 
exceed the current aggregate direct cost pool and apply it to the 
direct costs from Step 1 for each service.
    Step 5: Convert the results of Step 4 to an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs, as long as the same CF is used in Step 2 
and Step 5. Different CFs will result in different direct PE scaling 
factors, but this has no effect on the final direct cost PE RVUs since 
changes in the CFs and changes in the associated direct scaling factors 
offset one another.
(3) Create the Indirect Cost PE RVUs
    Create indirect allocators.
    Step 6: Based on the survey data, calculate direct and indirect PE 
percentages for each physician specialty.
    Step 7: Calculate direct and indirect PE percentages at the service 
level by taking a weighted average of the results of Step 6 for the 
specialties that furnish the service. Note that for services with TCs 
and PCs, the direct and indirect percentages for a given service do not 
vary by the PC, TC, and global components.
    Step 8: Calculate the service level allocators for the indirect PEs 
based on the percentages calculated in Step 7. The indirect PEs are 
allocated based on the three components: the direct PE RVUs, the 
clinical PE RVUs, and the work RVUs.
    For most services the indirect allocator is: indirect percentage * 
(direct PE RVUs/direct percentage) + work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
allocator is: indirect percentage (direct PE RVUs/direct percentage) + 
clinical PE RVUs + work RVUs.
     If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
indirect percentage (direct PE RVUs/direct percentage) + clinical PE 
RVUs.

    Note: For global services, the indirect allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs will be allocated 
using the work RVUs, and for the TC service, indirect PEs will be 
allocated using the direct PE RVUs and the clinical labor PE RVUs. 
This also allows the global component RVUs to equal the sum of the 
PC and TC RVUs.

    For presentation purposes in the examples in Table 2, the formulas 
were divided into two parts for each service.
     The first part does not vary by service and is the 
indirectpercentage (direct PE RVUs/direct percentage).
     The second part is either the work RVUs, clinical PE RVUs, 
or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    Apply a scaling adjustment to the indirect allocators.
    Step 9: Calculate the current aggregate pool of indirect PE RVUs by 
multiplying the current aggregate pool of PE RVUs by the average 
indirect PE percentage from the survey data.
    Step 10: Calculate an aggregate pool of indirect PE RVUs for all 
PFS services by adding the product of the indirect PE allocators for a 
service from Step 8 and the utilization data for that service.
    Step 11: Using the results of Step 9 and Step 10, calculate an 
indirect PE adjustment so that the aggregate indirect allocation does 
not exceed the available aggregate indirect PE RVUs and apply it to 
indirect allocators calculated in Step 8.
    Calculate the indirect practice cost index.
    Step 12: Using the results of Step 11, calculate aggregate pools of 
specialty-specific adjusted indirect PE allocators for all PFS services 
for a specialty by adding the product of the adjusted indirect PE 
allocator for each service and the utilization data for that service.
    Step 13: Using the specialty-specific indirect PE/HR data, 
calculate specialty-specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the physician time for the service, and the 
specialty's utilization for the service across all services performed 
by the specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty-specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service. (Note: For services with TCs and PCs, we calculate 
the indirect practice cost index across the global components, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global component.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(4) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs 
from Step 17 and apply the final PE budget neutrality (BN) adjustment.
    The final PE BN adjustment is calculated by comparing the results 
of Step 18 to the current pool of PE RVUs. This final BN adjustment is 
required primarily because certain specialties are excluded from the PE 
RVU calculation for ratesetting purposes, but all specialties are 
included for purposes of calculating the final BN adjustment. (See 
``Specialties excluded from ratesetting calculation'' later in this 
section.)
(5) Setup File Information
     Specialties excluded from ratesetting calculation: For the 
purposes of calculating the PE RVUs, we exclude certain specialties, 
such as certain nonphysician practitioners paid at a percentage of the 
PFS and low-volume specialties, from the calculation. These specialties 
are included for the purposes of calculating the BN adjustment. They 
are displayed in Table 1. We note that since specialty code 97 
(physician assistant) is paid at a percentage of the PFS and therefore 
excluded from the ratesetting calculation, this specialty has been 
added to the table for CY 2012.

       Table 1--Specialties Excluded From Ratesetting Calculation
------------------------------------------------------------------------
          Specialty code                    Specialty description
------------------------------------------------------------------------
49................................  Ambulatory surgical center.
50................................  Nurse practitioner.
51................................  Medical supply company with
                                     certified orthotist.
52................................  Medical supply company with
                                     certified prosthetist.
53................................  Medical supply company with
                                     certified
                                     prosthetist[dash]orthotist.
54................................  Medical supply company not included
                                     in 51, 52, or 53.
55................................  Individual certified orthotist.
56................................  Individual certified prosthestist.
57................................  Individual certified prosthetist-
                                     orthotist.
58................................  Individuals not included in 55, 56,
                                     or 57.

[[Page 42783]]

 
59................................  Ambulance service supplier, e.g.,
                                     private ambulance companies,
                                     funeral homes, etc.
60................................  Public health or welfare agencies.
61................................  Voluntary health or charitable
                                     agencies.
73................................  Mass immunization roster biller.
74................................  Radiation therapy centers.
87................................  All other suppliers (e.g., drug and
                                     department stores).
88................................  Unknown supplier/provider specialty.
89................................  Certified clinical nurse specialist.
95................................  Competitive Acquisition Program
                                     (CAP) Vendor.
96................................  Optician.
97................................  Physician assistant.
A0................................  Hospital.
A1................................  SNF.
A2................................  Intermediate care nursing facility.
A3................................  Nursing facility, other.
A4................................  HHA.
A5................................  Pharmacy.
A6................................  Medical supply company with
                                     respiratory therapist.
A7................................  Department store.
1.................................  Supplier of oxygen and/or oxygen
                                     related equipment.
2.................................  Pedorthic personnel.
3.................................  Medical supply company with
                                     pedorthic personnel.
------------------------------------------------------------------------

     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual TC and 26 modifiers: Flag the services that 
are PC and TC services, but do not use TC and 26 modifiers (for 
example, electrocardiograms). This flag associates the PC and TC with 
the associated global code for use in creating the indirect PE RVUs. 
For example, the professional service, CPT code 93010 
(Electrocardiogram, routine ECG with at least 12 leads; interpretation 
and report only), is associated with the global service, CPT code 93000 
(Electrocardiogram, routine ECG with at least 12 leads; with 
interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier.
     Work RVUs: The setup file contains the work RVUs from this 
final rule with comment period.
(6) Equipment Cost per Minute
    The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 + 
interest rate) [caret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = equipment utilization assumption; 0.75 for certain expensive 
diagnostic imaging equipment (see 74 FR 61753 through 61755 and 
section II.A.3. of the CY 2011 PFS final rule with comment period) 
and 0.5 for others.
price = price of the particular piece of equipment.
interest rate = 0.11.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.

    This interest rate was proposed and finalized during rulemaking for 
CY 1998 PFS (62 FR 33164). We solicit comment regarding reliable data 
on current prevailing loan rates for small businesses.

    Note:  The use of any particular conversion factor (CF) in Table 
2 to illustrate the PE calculation has no effect on the resulting 
RVUs.

BILLING CODE 4120-01-P

[[Page 42784]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.000

BILLING CODE 4120-01-C

[[Page 42785]]

3. Changes to Direct PE Inputs
    In this section, we discuss other specific CY 2012 proposals and 
changes related to direct PE inputs. The proposed changes that follow 
are included in the proposed CY 2012 direct PE database, which is 
available on the CMS Web site under the supporting data files for the 
CY 2012 PFS proposed rule at  http://www.cms.gov/PhysicianFeeSched/.
a. Inverted Equipment Minutes
    It has come to our attention that the minutes allocated for two 
particular equipment items have been inverted. This inversion affects 
three codes: 37232 (Revascularization, endovascular, open or 
percutaneous, tibial/peroneal artery, unilateral, each additional 
vessel; with transluminal angioplasty (List separately in addition to 
code for primary procedure)), 37233 (Revascularization, endovascular, 
open or percutaneous, tibial/peroneal artery, unilateral, each 
additional vessel; with atherectomy, includes angioplasty within the 
same vessel, when performed (List separately in addition to code for 
primary procedure)), and 37234 (Revascularization, endovascular, open 
or percutaneous, tibial/peroneal artery, unilateral, each additional 
vessel; with transluminal stent placement(s), includes angioplasty 
within the same vessel, when performed (List separately in addition to 
code for primary procedure)). In each case, the number of minutes 
allocated to the ``printer, dye sublimation (photo, color)'' (ED031) 
should be appropriately allocated to the ``stretcher'' (EF018). The 
number of minutes allocated to the stretcher should be appropriately 
allocated to the printer. Therefore, the proposed CY 2012 database 
includes direct PE input corrections to the times associated with the 
two equipment items in the three codes.
b. Labor and Supply Input Duplication
    We recently identified a number of CPT codes with inadvertently 
duplicated labor and supply inputs in the PE database. We are proposing 
to remove the duplicate labor and supply inputs in the proposed CY 2012 
database as detailed in Table 3.

                                                       Table 3--Labor and Supply Input Duplication
--------------------------------------------------------------------------------------------------------------------------------------------------------
              CPT Code                   Short code descriptor      CMS Labor/supply code                    Description of labor/supply
--------------------------------------------------------------------------------------------------------------------------------------------------------
12011...............................  Repair superficial wound(s)  SA048                    pack, minimum multi-specialty visit
15360...............................  Apply cult derm sub t/a/l..  SA054                    pack, post-op incision care (suture)
19361...............................  Breast reconstr w/lat flap.  L037D                    RN/LPN/MTA
21147...............................  Reconstruct midface lefort.  SA054                    pack, post-op incision care (suture)
23515...............................  Treat clavicle fracture....  SA052                    pack, post-op incision care (staple)
25415...............................  Repair radius & ulna.......  SA052                    pack, post-op incision care (staple)
                                      Repair radius & ulna.......  SA052                    pack, post-op incision care (staple)
28005...............................  Treat foot bone lesion.....  SA054                    pack, post-op incision care (suture)
28456...............................  Treat midfoot fracture.....  SA054                    pack, post-op incision care (suture)
28485...............................  Treat metatarsal fracture..  SA054                    pack, post-op incision care (suture)
32998...............................  Perq rf ablate tx pul tumor  SG079                    tape, surgical paper 1in (Micropore)
35501...............................  Artery bypass graft........  L037D                    RN/LPN/MTA
                                      Artery bypass graft........  SA048                    pack, minimum multi-specialty visit
35509...............................  Artery bypass graft........  L037D                    RN/LPN/MTA
                                      Artery bypass graft........  SA048                    pack, minimum multi-specialty visit
35601...............................  Artery bypass graft........  L037D                    RN/LPN/MTA
                                      Artery bypass graft........  SA048                    pack, minimum multi-specialty visit
36147...............................  Access av dial grft for      SB008                    drape, sterile, c-arm, fluoro
                                       eval.
                                      Access av dial grft for      SH026                    Conray Inj (iothalamate 43%)
                                       eval.
                                      Access av dial grft for      SK093                    x-ray ID card (flashcard)
                                       eval.
37231...............................  Tib/per revasc stent &       SK034                    film, x-ray 14in x 17in
                                       ather.
45541...............................  Correct rectal prolapse....  SJ032                    lubricating jelly (K-Y) (5gm uou)
45550...............................  Repair rectum/remove         SJ032                    lubricating jelly (K-Y) (5gm uou)
                                       sigmoid.
46258...............................  Remove in/ex hem grp w/      SD003                    anoscope
                                       fistu.
                                      Remove in/ex hem grp w/      SD003                    anoscope
                                       fistu.
                                      Remove in/ex hem grp w/      SD003                    anoscope
                                       fistu.
46261...............................  Remove in/ex hem grps &      SD003                    anoscope
                                       fiss.
                                      Remove in/ex hem grps &      SD003                    anoscope
                                       fiss.
                                      Remove in/ex hem grps &      SD003                    anoscope
                                       fiss.
58563...............................  Hysteroscopy ablation......  SB027                    gown, staff, impervious
64704...............................  Revise hand/foot nerve.....  SA054                    pack, post-op incision care (suture)
64726...............................  Release foot/toe nerve.....  SA054                    pack, post-op incision care (suture)
64782...............................  Remove limb nerve lesion...  SA054                    pack, post-op incision care (suture)
65810...............................  Drainage of eye............  SA082                    pack, ophthalmology visit (w-dilation)
67228...............................  Treatment of retinal lesion  L038A                    COMT/COT/RN/CST
                                      Treatment of retinal lesion  SA082                    pack, ophthalmology visit (w-dilation)
                                      Treatment of retinal lesion  SH049                    lidocaine 2% w-epi inj (Xylocaine w-epi)
76813...............................  Ob us nuchal meas 1 gest...  SK022                    film, 8in x (ultrasound, MRI)
78730...............................  Urinary bladder retention..  SB044                    underpad 2ft x 3ft (Chux)
88365...............................  Insitu hybridization (fish)  SM016                    eye shield, splash protection
91038...............................  Esoph imped funct test > 1h  SJ016                    denture cup
95875...............................  Limb exercise test.........  SC051                    syringe 10-12ml
--------------------------------------------------------------------------------------------------------------------------------------------------------

BILLING CODE 4120-01-C

[[Page 42786]]

c. AMA RUC Recommendations for Moderation Sedation Direct PE Inputs
    For services described by certain codes, the direct PE database 
includes nonfacility inputs that reflect the assumption that moderation 
sedation is inherent in the procedure. These codes are listed in Table 
4. The AMA RUC has recently provided CMS with a recommendation that 
standardizes the nonfacility direct PE inputs that account for moderate 
sedation as typically furnished as part of these services. 
Specifically, the RUC recommended that the direct PE inputs allocated 
for moderate sedation include the following:
    Clinical Labor Inputs: Registered Nurse (L051A) time that includes 
two minutes of time to initiate sedation, the number of minutes 
associated with the physician intra-service work time, and 15 minutes 
for every hour of patient recovery time for post-service patient 
monitoring.
    Supply Inputs: ``Pack, conscious sedation'' (SA044) that includes: 
an angiocatheter 14g-24g, bandage, strip 0.75in x 3in, catheter, 
suction, dressing, 4in x 4.75in (Tegaderm), electrode, ECG (single), 
electrode, ground, gas, oxygen, gauze, sterile 4in x 4in, gloves, 
sterile, gown, surgical, sterile, iv infusion set, kit, iv starter, 
oxygen mask (1) and tubing (7 ft), pulse oximeter sensor probe wrap, 
stop cock, 3-way, swab-pad, alcohol, syringe 1ml, syringe-needle 3ml 
22-26g, tape, surgical paper 1in (Micropore), tourniquet, and non-latex 
1in x 18in.
    Equipment Inputs: ``table, instrument, mobile'' (EF027), ``ECG, 3-
channel (with SpO2, NIBP, temp, resp)'' (EQ011), ``IV infusion pump'' 
(EQ032), ``pulse oxymetry recording software (prolonged monitoring)'' 
(EQ212), and ``blood pressure monitor, ambulatory, w-battery charger'' 
(EQ269).
    We have reviewed this recommendation and generally agree with these 
inputs. However, we note that the equipment item ``ECG, 3-channel (with 
SpO2, NIBP, temp, resp)'' (EQ011) incorporates the functionality of the 
equipment items ``pulse oxymetry recording software (prolonged 
monitoring)'' (EQ212), and ``blood pressure monitor, ambulatory, w-
battery charger'' (EQ269). Therefore we have not included these two 
items as standard nonfacility inputs for moderation sedation.
    We propose to accept the AMA RUC recommendation with the refinement 
as stated. The CY 2012 direct PE database reflects these proposed 
changes and is available on the CMS Web site under the supporting data 
files for the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.

   Table 4--Inherent Moderate Sedation Codes Valued In The Nonfacility
                                 Setting
------------------------------------------------------------------------
            CPT Code                         Short descriptor
------------------------------------------------------------------------
19298...........................  Place breast rad tube/caths
20982...........................  Ablate bone tumor(s) perq
22520...........................  Percut vertebroplasty thor
22521...........................  Percut vertebroplasty lumb
22526...........................  Idet single level
22527...........................  Idet 1 or more levels
31615...........................  Visualization of windpipe
31620...........................  Endobronchial us add-on
31622...........................  Dx bronchoscope/wash
31623...........................  Dx bronchoscope/brush
31624...........................  Dx bronchoscope/lavage
31625...........................  Bronchoscopy w/biopsy(s)
31626...........................  Bronchoscopy w/markers
31627...........................  Navigational bronchoscopy
31628...........................  Bronchoscopy/lung bx each
31629...........................  Bronchoscopy/needle bx each
31634...........................  Bronch w/balloon occlusion
31635...........................  Bronchoscopy w/fb removal
31645...........................  Bronchoscopy clear airways
31646...........................  Bronchoscopy reclear airway
31656...........................  Bronchoscopy inj for x-ray
32201...........................  Drain percut lung lesion
32550...........................  Insert pleural cath
32553...........................  Ins mark thor for rt perq
35471...........................  Repair arterial blockage
35472...........................  Repair arterial blockage
35475...........................  Repair arterial blockage
35476...........................  Repair venous blockage
36147...........................  Access av dial grft for eval
36148...........................  Access av dial grft for proc
36200...........................  Place catheter in aorta
36245...........................  Place catheter in artery
36481...........................  Insertion of catheter vein
36555...........................  Insert non-tunnel cv cath
36557...........................  Insert tunneled cv cath
36558...........................  Insert tunneled cv cath
36560...........................  Insert tunneled cv cath
36561...........................  Insert tunneled cv cath
36563...........................  Insert tunneled cv cath
36565...........................  Insert tunneled cv cath
36566...........................  Insert tunneled cv cath
36568...........................  Insert picc cath
36570...........................  Insert picvad cath
36571...........................  Insert picvad cath
36576...........................  Repair tunneled cv cath
36578...........................  Replace tunneled cv cath
36581...........................  Replace tunneled cv cath
36582...........................  Replace tunneled cv cath
36583...........................  Replace tunneled cv cath
36585...........................  Replace picvad cath
36590...........................  Removal tunneled cv cath
36870...........................  Percut thrombect av fistula
37183...........................  Remove hepatic shunt (tips)
37184...........................  Prim art mech thrombectomy
37185...........................  Prim art m-thrombect add-on
37186...........................  Sec art m-thrombect add-on
37187...........................  Venous mech thrombectomy
37188...........................  Venous m-thrombectomy add-on
37203...........................  Transcatheter retrieval
37210...........................  Embolization uterine fibroid
37220...........................  Iliac revasc
37221...........................  Iliac revasc w/stent
37222...........................  Iliac revasc add-on
37223...........................  Iliac revasc w/stent add-on
37224...........................  Fem/popl revas w/tla
37225...........................  Fem/popl revas w/ather
37226...........................  Fem/popl revasc w/stent
37227...........................  Fem/popl revasc stnt & ather
37228...........................  Tib/per revasc w/tla
37229...........................  Tib/per revasc w/ather
37230...........................  Tib/per revasc w/stent
37231...........................  Tib/per revasc stent & ather
37232...........................  Tib/per revasc add-on
37233...........................  Tibper revasc w/ather add-on
37234...........................  Revsc opn/prq tib/pero stent
37235...........................  Tib/per revasc stnt & ather
43200...........................  Esophagus endoscopy
43201...........................  Esoph scope w/submucous inj
43202...........................  Esophagus endoscopy biopsy
43216...........................  Esophagus endoscopy/lesion
43217...........................  Esophagus endoscopy
43234...........................  Upper gi endoscopy exam
43235...........................  Uppr gi endoscopy diagnosis
43236...........................  Uppr gi scope w/submuc inj
43239...........................  Upper gi endoscopy biopsy
43453...........................  Dilate esophagus
43456...........................  Dilate esophagus
43458...........................  Dilate esophagus
44385...........................  Endoscopy of bowel pouch
44386...........................  Endoscopy bowel pouch/biop
44388...........................  Colonoscopy
44389...........................  Colonoscopy with biopsy
44390...........................  Colonoscopy for foreign body
44391...........................  Colonoscopy for bleeding
44392...........................  Colonoscopy & polypectomy
44393...........................  Colonoscopy lesion removal
44394...........................  Colonoscopy w/snare
44901...........................  Drain app abscess percut
45303...........................  Proctosigmoidoscopy dilate
45305...........................  Proctosigmoidoscopy w/bx
45307...........................  Proctosigmoidoscopy fb
45308...........................  Proctosigmoidoscopy removal
45309...........................  Proctosigmoidoscopy removal
45315...........................  Proctosigmoidoscopy removal
45317...........................  Proctosigmoidoscopy bleed
45320...........................  Proctosigmoidoscopy ablate
45332...........................  Sigmoidoscopy w/fb removal
45333...........................  Sigmoidoscopy & polypectomy
45335...........................  Sigmoidoscopy w/submuc inj
45338...........................  Sigmoidoscopy w/tumr remove
45339...........................  Sigmoidoscopy w/ablate tumr
45340...........................  Sig w/balloon dilation
45378...........................  Diagnostic colonoscopy
45379...........................  Colonoscopy w/fb removal
45380...........................  Colonoscopy and biopsy
45381...........................  Colonoscopy submucous inj
45382...........................  Colonoscopy/control bleeding
45383...........................  Lesion removal colonoscopy
45384...........................  Lesion remove colonoscopy
45385...........................  Lesion removal colonoscopy
45386...........................  Colonoscopy dilate stricture
47000...........................  Needle biopsy of liver
47382...........................  Percut ablate liver rf
47525...........................  Change bile duct catheter
48511...........................  Drain pancreatic pseudocyst
49021...........................  Drain abdominal abscess
49041...........................  Drain percut abdom abscess
49061...........................  Drain percut retroper absc
49411...........................  Ins mark abd/pel for rt perq
49418...........................  Insert tun ip cath perc
49440...........................  Place gastrostomy tube perc
49441...........................  Place duod/jej tube perc
49442...........................  Place cecostomy tube perc

[[Page 42787]]

 
49446...........................  Change g-tube to g-j perc
50021...........................  Renal abscess percut drain
50200...........................  Renal biopsy perq
50382...........................  Change ureter stent percut
50384...........................  Remove ureter stent percut
50385...........................  Change stent via transureth
50386...........................  Remove stent via transureth
50387...........................  Change ext/int ureter stent
50592...........................  Perc rf ablate renal tumor
50593...........................  Perc cryo ablate renal tum
57155...........................  Insert uteri tandems/ovoids
58823...........................  Drain pelvic abscess percut
66720...........................  Destruction ciliary body
69300...........................  Revise external ear
77371...........................  Srs multisource
77600...........................  Hyperthermia treatment
77605...........................  Hyperthermia treatment
77610...........................  Hyperthermia treatment
77615...........................  Hyperthermia treatment
92960...........................  Cardioversion electric ext
93312...........................  Echo transesophageal
93314...........................  Echo transesophageal
93451...........................  Right heart cath
93452...........................  Left hrt cath w/ventrclgrphy
93453...........................  R&l hrt cath w/ventriclgrphy
93454...........................  Coronary artery angio s&i
93455...........................  Coronary art/grft angio s&i
93456...........................  Rhrt coronary artery angio
93457...........................  Rhrt art/grft angio
93458...........................  Lhrt artery/ventricle angio
93459...........................  Lhrt art/grft angio
93460...........................  R&l hrt art/ventricle angio
93461...........................  R&l hrt art/ventricle angio
93464...........................  Exercise w/hemodynamic meas
93505...........................  Biopsy of heart lining
93566...........................  Inject r ventr/atrial angio
93568...........................  Inject pulm art hrt cath
93642...........................  Electrophysiology evaluation
------------------------------------------------------------------------

d. Updates to Price and Useful Life for Existing Direct Inputs
    In the CY 2011 PFS final rule with comment period (75 FR 73205), we 
finalized a process to act on public requests to update equipment and 
supply price and equipment useful life inputs through annual rulemaking 
beginning with the CY 2012 PFS proposed rule.
    During 2010, we received a request to update the price of ``tray, 
bone marrow biopsy-aspiration'' (SA062) from $24.27 to $34.47. The 
request included multiple invoices that documented updated prices for 
the supply item. We also received a request to update the useful life 
of ``holter monitor'' (EQ127) from 7 years to 5 years, based on its 
entry in the AHA's publication, ''Estimated Useful Lives of Depreciable 
Hospital Assets,'' which we use as a standard reference. In each of 
these cases, we are proposing to accept the updated inputs, as 
requested. The CY 2012 direct PE database reflects these proposed 
changes and is available on the CMS Web site under the supporting data 
files for the CY 2012 PFS proposed rule at http://www.cms.gov/PhysicianFeeSched/.
4. Development of Code-Specific PE RVUs
    When creating G codes, we often develop work, PE, and malpractice 
RVUs by crosswalking the RVUs from similar (reference) codes. In most 
of these cases, the PE RVUs are directly crosswalked pending the 
availability of utilization data. Once that data is available, we 
crosswalk the direct PE inputs and develop PE RVUs using the regular 
practice expense methodology, including allocators that are derived 
from utilization data. For CY 2012, we are using this process to 
develop PE RVUs for the following services: G0245 (Initial physician 
evaluation and management of a diabetic patient with diabetic sensory 
neuropathy resulting in a loss of protective sensation (LOPS) which 
must include: (1) The diagnosis of LOPS, (2) a patient history, (3) a 
physical examination that consists of at least the following elements: 
(a) Visual inspection of the forefoot, hindfoot and toe web spaces, (b) 
evaluation of a protective sensation, (c) evaluation of foot structure 
and biomechanics, (d) evaluation of vascular status and skin integrity, 
and (e) evaluation and recommendation of footwear and (4) patient 
education); G0246 (Follow-up physician evaluation and management of a 
diabetic patient with diabetic sensory neuropathy resulting in a loss 
of protective sensation (LOPS) to include at least the following: (1) A 
patient history, (2) a physical examination that includes: (a) Visual 
inspection of the forefoot, hindfoot and toe web spaces, (b) evaluation 
of protective sensation, (c) evaluation of foot structure and 
biomechanics, (d) evaluation of vascular status and skin integrity, and 
(e) evaluation and recommendation of footwear, and (3) patient 
education); G0247 (Routine foot care by a physician of a diabetic 
patient with diabetic sensory neuropathy resulting in a loss of 
protective sensation (LOPS) to include, the local care of superficial 
wounds (for example, superficial to muscle and fascia) and at least the 
following if present: (1) Local care of superficial wounds, (2) 
debridement of corns and calluses, and (3) trimming and debridement of 
nails); G0341 (Percutaneous islet cell transplant, includes portal vein 
catheterization and infusion); G0342 (Laparoscopy for islet cell 
transplant, includes portal vein catheterization and infusion); G0343 
(Laparotomy for islet cell transplant, includes portal vein 
catheterization and infusion); and G0365 (Vessel mapping of vessels for 
hemodialysis access (services for preoperative vessel mapping prior to 
creation of hemodialysis access using an autogenous hemodialysis 
conduit, including arterial inflow and venous outflow)). The values in 
Addendum B reflect the updated PE RVUs.
    In addition, there is a series of G-codes describing surgical 
pathology services with PE RVUs historically valued outside of the 
regular PE methodology. These codes are: G0416 (Surgical pathology, 
gross and microscopic examination for prostate needle saturation biopsy 
sampling, 1-20 specimens); G0417 (Surgical pathology, gross and 
microscopic examination for prostate needle saturation biopsy sampling, 
21-40 specimens); G0418 (Surgical pathology, gross and microscopic 
examination for prostate needle saturation biopsy sampling, 41-60 
specimens); and G0419 (Surgical pathology, gross and microscopic 
examination for prostate needle saturation biopsy sampling, greater 
than 60 specimens.) The PE RVUs for these codes were established as 
described in the CY 2009 PFS final rule with comment period (73 FR 
69751). In reviewing these values for CY 2012, we noted that because 
the PE RVUs established through rulemaking in CY 2009 were neither 
developed using the regular PE methodology nor directly crosswalked 
from other codes, the PE RVUs for these codes were not adjusted to 
account for the CY 2011 MEI rebasing and revising, which is discussed 
in the CY 2011 PFS final rule with comment period (75 FR 73262). While 
it was technically appropriate to insulate the PE RVUs from that 
adjustment in CY 2011, upon further review, we believe adjusting these 
PE RVUs would result in more accurate payment rates relative to the 
RVUs for other PFS services. Therefore, we are proposing to adjust the 
PE RVUs for these codes by 1.182, the adjustment rate that accounted 
for the MEI rebasing and revising for CY 2011. The PE RVUs in Addendum 
B reflect the proposed updates.
5. Physician Time for Select Services
    As we describe in section II.A.2.f. of this proposed rule with 
comment period, in creating the indirect practice cost index, we 
calculate specialty-specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the physician time for the service, and the 
specialty's utilization for the service across all services performed 
by the specialty.

[[Page 42788]]

    During a review of the physician time data for the CY 2012 PFS 
rulemaking, we noted an anomaly regarding the physician time allotted 
to a series of group service codes that are listed in Table 5. We 
believe that the time associated with these codes reflects the typical 
amount of time spent by the practitioner in furnishing the group 
service. However, because the services are billed per patient receiving 
the service, the time for these codes should be divided by the typical 
number of patients per session. In reviewing the data used in the 
valuation of work RVUs for these services, we noted that in one 
vignette for these services, the typical group session consisted of 6 
patients. Therefore we are proposing adjusted times for these services 
based on 6 patients. However, we seek comment on the typical number of 
patients seen per session for each of these services.
    As a result of our review, we are also proposing to update our 
physician time file to reflect the physician time associated with 
certain G-codes that were previously missing from the file. Our 
proposed time values for these G-codes as well as the group service 
codes described previously can be found in the proposed CY 2012 
Physician Time file, which is available on the CMS Web site under the 
supporting data files for the CY 2012 PFS proposed rule at 
http:[sol][sol]www.cms.gov/PhysicianFeeSched/.

  Table 5--Group Education and Therapy Codes With Proposed Time Changes
------------------------------------------------------------------------
            CPT Code                         Short descriptor
------------------------------------------------------------------------
90849...........................  Multiple family group psytx
90853...........................  Group psychotherapy
90857...........................  Intac group psytx
92508...........................  Speech/hearing therapy
96153...........................  Intervene hlth/behave group
97150...........................  Group therapeutic procedures
97804...........................  Medical nutrition group
G0271...........................  Group mnt 2 or more 30 mins
G0421...........................  Ed svc ckd grp per session
G0109...........................  Diab manage trn ind/group
------------------------------------------------------------------------

B. Potentially Misvalued Services Under the Physician Fee Schedule

1. Valuing Services Under the PFS
    As discussed in section I. of this proposed rule, in order to value 
services under the PFS, section 1848(c) of the Act requires the 
Secretary to determine relative values for physicians' services based 
on three components: Work, practice expense (PE), and malpractice. 
Section 1848(c)(1)(A) of the Act defines the work component to include 
``the portion of the resources used in furnishing the service that 
reflects physician time and intensity in furnishing the service.'' 
Additionally, the statute provides that the work component shall 
include activities that occur before and after direct patient contact. 
Furthermore, the statute specifies that with respect to surgical 
procedures, the valuation of the work component for the code must 
reflect a ``global'' concept in which pre-operative and post-operative 
physicians' services related to the procedure are also included.
    In addition, section 1848(c)(2)(C)(i) of the Act specifies that 
``the Secretary shall determine a number of work relative value units 
(RVUs) for the service based on the relative resources incorporating 
physician time and intensity required in furnishing the service.'' As 
discussed in detail in sections I.A.2. and I.A.3. of this proposed 
rule, the statute also defines the PE and malpractice components and 
provides specific guidance in the calculation of the RVUs for each of 
these components. Section 1848(c)(1)(B) of the Act defines the PE 
component as ``the portion of the resources used in furnishing the 
service that reflects the general categories of expenses (such as 
office rent and wages of personnel, but excluding malpractice expenses) 
comprising practice expenses.''
    Section 1848(c)(2)(C)(ii) of the Act specifies that the ``Secretary 
shall determine a number of practice expense relative value units for 
the services for years beginning with 1999 based on the relative 
practice expense resources involved in furnishing the service.'' 
Furthermore, section 1848(c)(2)(B) of the Act directs the Secretary to 
conduct a periodic review, not less often than every 5 years, of the 
RVUs established under the PFS. On March 23, 2010, the Affordable Care 
Act was enacted, further requiring the Secretary to periodically 
identify and review and identify potentially misvalued codes, and make 
appropriate adjustments to the relative values of those services 
identified as being potentially misvalued. Section 3134(a) of the 
Affordable Care Act added a new section 1848(c)(2)(K) of the Act which 
requires the Secretary to periodically identify potentially misvalued 
services using certain criteria, and to review and make appropriate 
adjustments to the relative values for those services. Section 3134(a) 
of the Affordable Care Act also added a new section 1848(c)(2)(L) of 
the Act which requires the Secretary to develop a validation process to 
validate the RVUs of certain potentially misvalued codes under the PFS, 
identified using the same categorical criteria used to identify 
potentially misvalued codes, and to make appropriate adjustments.
    As discussed in section I.A.1. of this proposed rule, we generally 
establish physician work RVUs for new and revised codes based on our 
review of recommendations received from the AMA RUC. We also receive 
recommendations from the AMA RUC regarding direct PE inputs for 
services, which we evaluate in order to develop the PE RVUs under the 
PFS. The AMA RUC also provides recommendations to us on the values for 
codes that have been identified as potentially misvalued. To respond to 
concerns expressed by MedPAC, the Congress, and other stakeholders 
regarding accurate valuation of services under the PFS, the AMA RUC 
created the Five-Year Review Identification Workgroup in 2006. In 
addition to providing recommendations to us for work RVUs and physician 
times, the AMA RUC's Practice Expense Subcommittee reviews direct PE 
inputs (clinical labor, medical supplies, and medical equipment) for 
individual services.
    In accordance with section 1848(c) of the Act, we determine 
appropriate adjustments to the RVUs, taking into account the 
recommendations provided by the AMA RUC and MedPAC, explain the basis 
of these adjustments, and respond to public comments in the PFS 
proposed and final rules. We note that section 1848(c)(2)(A)(ii) of the 
Act authorizes the use of extrapolation and other techniques to 
determine the RVUs for physicians' services for which specific data are 
not available, in addition to taking into account the results of 
consultations with organizations representing physicians.
2. Identifying, Reviewing, and Validating the RVUs of Potentially 
Misvalued Services under the PFS
a. Background
    In its March 2006 Report to the Congress, MedPAC noted that 
``misvalued services can distort the price signals for physicians' 
services as well as for other health care services that physicians 
order, such as hospital services.'' In that same report MedPAC 
postulated that physicians' services under the PFS can become misvalued 
over time for a number of reasons: For example, MedPAC stated, ``when a 
new service is added to the physician fee schedule, it may be assigned 
a relatively high value because of the time, technical skill, and 
psychological stress that are often required to furnish that service. 
Over time, the work required for certain services would be expected to

[[Page 42789]]

decline as physicians become more familiar with the service and more 
efficient in furnishing it.'' That is, the amount of physician work 
needed to furnish an existing service may decrease when new 
technologies are incorporated. Services can also become overvalued when 
practice expenses decline. This can happen when the costs of equipment 
and supplies fall, or when equipment is used more frequently, reducing 
its cost per use. Likewise, services can become undervalued when 
physician work increases or practice expenses rise. In the ensuing 
years since MedPAC's 2006 report, additional groups of potentially 
misvalued services have been identified by the Congress, CMS, MedPAC, 
the AMA RUC, and other stakeholders.
    In recent years CMS and the AMA RUC have taken increasingly 
significant steps to address potentially misvalued codes. As MedPAC 
noted in its March 2009 Report to the Congress, in the intervening 
years since MedPAC made the initial recommendations, ``CMS and the AMA 
RUC have taken several steps to improve the review process.'' Most 
recently, section 1848(c)(2)(K)(ii) of the Act (as added by section 
3134(a) of the Affordable Care Act) directed the Secretary to 
specifically examine, as determined appropriate, potentially misvalued 
services in seven categories as follows:
     Codes and families of codes for which there has been the 
fastest growth.
     Codes or families of codes that have experienced 
substantial changes in practice expenses.
     Codes that are recently established for new technologies 
or services.
     Multiple codes that are frequently billed in conjunction 
with furnishing a single service.
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment.
     Codes which have not been subject to review since the 
implementation of the RBRVS (the so-called ``Harvard-valued codes'').
     Other codes determined to be appropriate by the Secretary.
    Section 1848(c)(2)(K)(iii) of the Act also specifies that the 
Secretary may use existing processes to receive recommendations on the 
review and appropriate adjustment of potentially misvalued services. In 
addition, the Secretary may conduct surveys, other data collection 
activities, studies, or other analyses, as the Secretary determines to 
be appropriate, to facilitate the review and appropriate adjustment of 
potentially misvalued services. This section also authorizes the use of 
analytic contractors to identify and analyze potentially misvalued 
codes, conduct surveys or collect data, and make recommendations on the 
review and appropriate adjustment of potentially misvalued services. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of the RVUs with the periodic review 
described in section 1848(c)(2)(B) of the Act. Finally, section 
1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make 
appropriate coding revisions (including using existing processes for 
consideration of coding changes) which may include consolidation of 
individual services into bundled codes for payment under the physician 
fee schedule.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
    Over the last several years, CMS, in conjunction with the AMA RUC, 
has identified and reviewed numerous potentially misvalued codes in all 
seven of the categories specified in section 1848(c)(2)(K)(ii) of the 
Act, and we plan to continue our work examining potentially misvalued 
codes in these areas over the upcoming years, consistent with the new 
legislative requirements on this issue. In the current process, we 
request the AMA RUC to review potentially misvalued codes that we 
identify and make recommendations on revised work RVUs and/or direct PE 
inputs for those codes to us. The AMA RUC, through its own processes, 
also might identify and review potentially misvalued procedures. We 
then assess the recommended revised work RVUs and/or direct PE inputs 
and, in accordance with section 1848(c) of the Act, we determine if the 
recommendations constitute appropriate adjustments to the RVUs under 
the PFS.
    Since CY 2009, as a part of the annual potentially misvalued code 
review, we have reviewed over 700 potentially misvalued codes to refine 
work RVUs and direct PE inputs in addition to continuing the 
comprehensive Five-Year Review process. We have adopted appropriate 
work RVUs and direct PE inputs for these services as a result of these 
reviews.
    Our prior reviews of codes under the potentially misvalued codes 
initiative has included codes in all seven categories specified in 
section 1848(c)(2)(K)(ii) of the Act. That is, we have reviewed and 
assigned more appropriate values to--
     Codes and families of codes for which there has been the 
fastest growth;
     Codes or families of codes that have experienced 
substantial changes in practice expenses;
     Codes that were recently established for new technologies 
or services;
     Multiple codes that are frequently billed in conjunction 
with furnishing a single service;
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment;
     Codes which had not been subject to review since the 
implementation of the RBRVS (``Harvard valued''); and
     Codes potentially misvalued as determined by the 
Secretary.
    In this last category, we have previously proposed policies in CYs 
2009, 2010, and 2011, and requested that the AMA RUC review codes for 
which there have been shifts in the site-of-service (that is, codes 
that were originally valued as being furnished in the inpatient 
setting, but that are now predominantly furnished on an outpatient 
basis), as well as codes that qualify as ``23-hour stay'' outpatient 
services (these services typically have lengthy hospital outpatient 
recovery periods). We note that a detailed discussion of the extensive 
prior reviews of potentially misvalued codes is included in the CY 2011 
PFS final rule with comment period (75 FR 73215 through 73216).
    In CY 2011, we identified additional codes under section 
1848(c)(2)(K)(ii) of the Act that we believe are ripe for review and 
referred them to the AMA RUC (75 FR 73215 through 73216). Specifically, 
we identified potentially misvalued codes in the category of ``Other 
codes determined to be appropriate by the Secretary,'' referring lists 
of codes with low work RVUs but that are high volume based on claims 
data as well as targeted key codes that the AMA RUC uses as reference 
services for valuing other services, termed ``multispecialty points of 
comparison'' services.
    Since the publication of the CY 2011 PFS final rule with comment 
period, we released the Fourth Five-Year Review of Work (76 FR 32410), 
which discussed the identification and review of an additional 173 
potentially misvalued codes. We initiated the Fourth Five-Year Review 
of work RVUs by soliciting public comments on potentially misvalued 
codes for all services included in the CY 2010 PFS final rule with 
comment period that was published in the Federal Register on November 
25, 2009. In addition to the codes submitted by the commenters, we 
identified a number of potentially misvalued codes and requested the 
AMA RUC to review and provide recommendations. Our identification of 
potentially misvalued codes for the

[[Page 42790]]

Fourth Five-Year Review focused on two Affordable Care Act categories: 
Site-of-service anomaly codes and ``Harvard valued'' codes. As 
discussed in the Fourth Five-Year Review of Work (76 FR 32410), we sent 
the AMA RUC an initial list of 219 codes for review. Consistent with 
our past practice, we requested the AMA RUC to review codes on a 
``family'' basis rather than in isolation in order to ensure that 
appropriate relativity in the system was retained. Consequently, the 
AMA RUC included additional codes for review, resulting in a total of 
290 codes for the Fourth Five-Year Review of Work. Of those 290 codes, 
53 were subsequently sent to the CPT Editorial Panel to consider coding 
changes, 14 were not reviewed by the AMA RUC (and subsequently not 
reviewed by us) because the specialty society that had originally 
requested the review in its public comments on the CY 2010 PFS final 
rule with comment period elected to withdraw the codes, 36 were not 
reviewed by the AMA RUC because their values were set as interim final 
in the CY 2011 PFS final rule with comment period, and 14 were not 
reviewed by us because they were noncovered services under Medicare. 
Therefore, the AMA RUC reviewed 173 of the 290 codes initially 
identified for the Fourth Five-Year Review of Work, and provided the 
recommendations that were addressed in detail in the Fourth Five-Year 
Review of Work (76 FR 32410). In addition, under the Fourth Five-Year 
Review of Work, we reviewed recommendations for five additional 
potentially misvalued codes from the Health Care Professionals Advisory 
Committee (HCPAC), a deliberative body of nonphysician practitioners 
that also convenes during the AMA RUC meeting. The HCPAC represents 
physician assistants, chiropractors, nurses, occupational therapists, 
optometrists, physical therapists, podiatrists, psychologists, 
audiologists, speech pathologists, social workers, and registered 
dieticians.
    In summary, since CY 2009, CMS and the AMA RUC have addressed a 
number of potentially misvalued codes. For CY 2009, the AMA RUC 
recommended revised work values and/or PE inputs for 204 misvalued 
services (73 FR 69883). For CY 2010, an additional 113 codes were 
identified as misvalued and the AMA RUC provided us new recommendations 
for revised work RVUs and/or PE inputs for these codes to us as 
discussed in the CY 2010 PFS final rule with comment period (74 FR 
61778). For CY 2011, CMS reviewed and adopted more appropriate values 
for 209 codes under the annual review of potentially misvalued codes. 
For CY 2012, we recently released the Fourth Five-Year Review of Work, 
which discussed the review of 173 potentially misvalued codes and 
proposed appropriate adjustments to RVUs. In section II.B.5.of this 
proposed rule, we also provide a list of codes identified for future 
consideration as part of the potentially misvalued codes initiative, 
that is, in addition to the codes that are part of the Fourth Five-Year 
Review of Work, as discussed in that section, we are requesting the AMA 
RUC review these codes and submit recommendations to us.
c. Validating RVUs of Potentially Misvalued Codes
    In addition to identifying and reviewing potentially misvalued 
codes, section 3134(a) of the Affordable Care Act added a new section 
1848(c)(2)(L) of the Act, which specifies that the Secretary shall 
establish a formal process to validate RVUs value units under the PFS. 
The validation process may include validation of work elements (such as 
time, mental effort and professional judgment, technical skill and 
physical effort, and stress due to risk) involved with furnishing a 
service and may include validation of the pre-, post-, and intra-
service components of work. The Secretary is directed to validate a 
sampling of the work RVUs of codes identified through any of the seven 
categories of potentially misvalued codes specified by section 
1848(c)(2)(K)(ii) of the Act. Furthermore, the Secretary may conduct 
the validation using methods similar to those used to review 
potentially misvalued codes, including conducting surveys, other data 
collection activities, studies, or other analyses as the Secretary 
determines to be appropriate to facilitate the validation of RVUs of 
services.
    In the CY 2011 PFS proposed rule (75 FR 40068), we solicited public 
comments on possible approaches and methodologies that we should 
consider for a validation process. We received a number of comments 
regarding possible approaches and methodologies for a validation 
process. As discussed in the CY 2011 PFS final rule with comment period 
(75 FR 73217), some commenters were skeptical that there could be 
viable alternative methods to the existing AMA RUC code review process 
for validating physician time and intensity that would preserve the 
appropriate relativity of specific physician's services under the 
current payment system. These commenters generally urged us to rely 
solely on the AMA RUC to provide valuations for services under the PFS.
    While a number of commenters strongly opposed our plans to develop 
a formal validation process, many other commenters expressed support 
for the development and establishment of a system-wide validation 
process of the work RVUs under the PFS. As noted in the CY 2011 PFS 
final rule with comment period (75 FR 73217 through 73218), these 
commenters commended us for seeking new approaches to validation, as 
well as being open to suggestions from the public on this process. A 
number of commenters submitted technical advice and offered their time 
and expertise as resources for us to draw upon in any examination of 
possible approaches to developing a formal validation process.
    However, in response to our solicitation of comments regarding time 
and motion studies, a number of commenters opposed the approach of 
using time and motion studies to validate estimates of physician time 
and intensity, stating that properly conducted time and motion studies 
are extraordinarily expensive and, given the thousands of codes paid 
under the PFS, it would be unlikely that all codes could be studied. As 
we stated in the CY 2011 PFS final rule with comment period (75 FR 
73218), we understand that these studies would require significant 
resources and we remain open to suggestions for other approaches to 
developing a formal validation process. We note that MedPAC suggested 
in its comment letter (75 FR 73218) that we should consider 
``collecting data on a recurring basis from a cohort of practices and 
other facilities where physicians and nonphysician clinical 
practitioners work.'' As we stated previously, we intend to establish a 
more extensive validation process of RVUs in the future in accordance 
with the requirements of section 1848(c)(2)(L) of the Act.
    While we received a modest number of comments specifically 
addressing technical and methodological aspects of developing a 
validation system, we believe it would be beneficial to provide an 
additional opportunity for stakeholders to submit comments on data 
sources and possible methodologies for developing a system-wide 
validation system. We are particularly interested in comments regarding 
data sources and studies which may be used to validate estimates of 
physician time and intensity that could be factored into the work RVUs, 
especially for services with rapid growth in Medicare expenditures, 
which is one of the Affordable Care Act

[[Page 42791]]

categories that the statute specifically directs us to examine. We are 
also soliciting comments regarding MedPAC's suggestion of ``collecting 
data on a recurring basis from a cohort of practices and other 
facilities where physicians and nonphysician clinical practitioners 
work.''
    We plan to discuss the validation process in more detail in a 
future PFS rule once we have considered the matter further in 
conjunction with the public comments received on the CY 2011 
rulemaking, as well as this proposed rule. We note that any proposals 
we would make on the formal validation process would be subject to 
public comment, and we would consider those comments before finalizing 
the policies.
3. Consolidating Reviews of Potentially Misvalued Codes
    As previously discussed, we are statutorily required to review the 
RVUs of services paid under the PFS no less often than every 5 years. 
In the past, we have satisfied this requirement by conducting periodic 
reviews of work, PE, and malpractice RVUs for established services 
every 5 years in what is commonly known as CMS' Five-Year Reviews of 
Work, PE, and Malpractice RVUs. Recently, on May 24, 2011, we released 
the proposed notice regarding the Fourth Five-Year Review of Work RVUs. 
The most recent comprehensive Five-Year Review of PE RVUs occurred for 
CY 2010; the same year we began using the Physician Practice 
Information Survey (PPIS) data to update the PE RVUs. The last Five-
Year Review of Malpractice RVUs also occurred for CY 2010. These Five-
Year Reviews have historically included codes identified and nominated 
by the public for review, as well as those identified by CMS and the 
AMA RUC.
    In addition to the Five-Year Reviews, beginning for CY 2009, CMS 
and the AMA RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis using various identification 
screens, such as codes with high growth rates, codes that are 
frequently billed together in one encounter, and codes that are valued 
as inpatient services but that are now predominately furnished as 
outpatient services. These annual reviews have not included codes 
identified by the public as potentially misvalued since historically, 
the public has the opportunity to submit potentially misvalued codes 
during the Five-Year Review process.
    With the enactment of the Affordable Care Act in 2010, which 
endorsed our initiative to identify and review potentially misvalued 
codes and emphasized the importance of our ongoing work in this area to 
improve accuracy and appropriateness of payments under the PFS, we 
believe that continuing the annual identification and review of 
potentially misvalued codes is necessary. Given that we are engaging in 
extensive reviews of work RVUs and direct PE inputs of potentially 
misvalued codes on an annual basis, we believe that separate and 
``freestanding'' Five-Year Reviews of Work and PE may have become 
redundant with our annual efforts. Therefore, for CY 2012 and forward, 
we propose to consolidate the formal Five-Year Review of Work and PE 
with the annual review of potentially misvalued codes. That is, we 
would begin meeting the statutory requirement to review work and PE 
RVUs for potentially misvalued codes at least once every 5 years 
through an annual process, rather than once every 5 years. Furthermore, 
to allow for public input and to preserve the public's ability to 
identify and nominate potentially misvalued codes for review, we are 
proposing a process by which the public could submit codes for our 
potential review, along with supporting documentation, on an annual 
basis. Our review of these codes would be incorporated into our 
potentially misvalued codes initiative. This proposal is further 
discussed in section II.B.4. of this proposed rule. We are soliciting 
comments on our proposal to consolidate the formal Five-Year Reviews of 
Work and PE with the annual review of potentially misvalued codes.
    We note that while we are proposing to review the physician work 
RVUs and direct PE inputs of potentially misvalued codes on an annual 
basis, we are not proposing at this time to review malpractice RVUs on 
an annual basis. As discussed in section II.D. of this proposed rule, 
in general, malpractice RVUs are based on malpractice insurance premium 
data on a specialty level. The last comprehensive review and update of 
the malpractice RVUs occurred for CY 2010 using data obtained from the 
PPIS data. Since it is not feasible to conduct such extensive physician 
surveys to obtain updated specialty level malpractice insurance premium 
data on an annual basis, we believe the comprehensive review of 
malpractice RVUs should continue to occur at 5-year intervals.
    Furthermore, in identifying and reviewing potentially misvalued 
codes on an annual basis, we note that this new proposed process 
presents us with the opportunity to review simultaneously both the work 
RVUs and the direct PE inputs, in conjunction, for each code. 
Heretofore, the work RVUs and direct PE inputs of potentially misvalued 
codes were commonly reviewed separately and at different times. For 
example, a code may have been identified as potentially misvalued based 
solely on its work RVUs so the AMA RUC would have reviewed the code and 
provided us with recommendations on the physician times and work RVUs. 
However, the code's direct PE inputs would not have necessarily been 
reviewed concurrently and therefore, the AMA RUC would not have 
necessarily provided us with recommendations for any changes in the 
direct PE inputs of the code that could have been necessary to ensure 
that the PE RVUs of the code are determined more appropriately. 
Therefore, while this code may have been recently reviewed and revised 
under the potentially misvalued codes initiative for physician work, 
the PE component of the code could still be potentially misvalued. 
Going forward, we believe combining the review of both physician work 
and PE for each code under our potentially misvalued codes initiative 
will more accurately align the review of these codes and lead to more 
accurate and appropriate payments under the PFS.
    Finally, it is important to note that the code-specific resource 
based relative value framework under the PFS system is one in which 
services are ranked relative to each other. That is, the work RVUs 
assigned to a code are based on the physician time and intensity 
expended on that particular service as compared to the physician time 
and intensity of the other services paid under the PFS. This concept of 
relativity to other services also applies to the PE RVUs, particularly 
when it comes to reviewing and assigning correct direct PE inputs that 
are relative to other similar services. Consequently, we are 
emphasizing the need to review codes that are identified as part of the 
potentially misvalued initiative to ensure that appropriate relativity 
is constructed and maintained in several key relationships:
     The work and PE RVUs of codes are ranked appropriately 
within the code family. That is, the RVUs of services within a family 
should be ranked progressively so that less intensive services and/or 
services that require less physician time and/or require fewer or less 
expensive direct PE inputs should be assigned lower work or PE RVUs 
relative to other codes within the family. For example, if a code for 
treatment of elbow fracture is under review under the potentially 
misvalued

[[Page 42792]]

codes initiative, we would expect the work and PE RVUs for all the 
codes in the family also be reviewed in order to ensure that relativity 
is appropriately constructed and maintained within this family. 
Furthermore, as we noted in the CY 2010 PFS final rule with comment 
period (74 FR 61941), when we submit codes to the AMA RUC and request 
their review, in order to maintain relativity, we emphasized the 
importance of reviewing the base code of a family. The base code is the 
most important code to review because it is the basis for the valuation 
of other codes within the family and allows for all related codes to be 
reviewed at the same time (74 FR 61941).
     The work and PE RVUs of codes are appropriately relative 
based on comparison of physician time and/or intensity and/or direct 
inputs to other services furnished by physicians in the same specialty. 
To continue the example shown previously, if a code for treatment of 
elbow fracture is under review, we would expect this code to be 
compared to other codes, such as codes for treatment of humerus 
fracture, or other codes furnished by physicians in the same specialty, 
in order to ensure that the work and PE RVUs are appropriately relative 
within the specialty.
     The work and PE RVUs of codes are appropriately relative 
when compared to services across specialties. While it may be 
challenging to compare codes that describe completely unrelated 
services, since the entire PFS is a budget neutral system where payment 
differentials are dependent on the relative differences between 
services, it is essential that services across specialties are 
appropriately valued relative to each other. To illustrate the point, 
if a service furnished primarily by dermatology is analogous in 
physician time and intensity to another service furnished primarily by 
allergy/immunology, then we would expect the work RVUs for the two 
services to be similar, even though the two services may be otherwise 
unrelated.
4. Proposed Public Nomination Process
    Under the previous Five-Year Reviews, the public was provided with 
the opportunity to nominate potentially misvalued codes for review. To 
allow for public input and to preserve the public's ability to identify 
and nominate potentially misvalued codes for review under our annual 
potentially misvalued codes initiative, we are proposing a process by 
which on an annual basis the public could submit codes, along with 
documentation supporting the need for review. We are proposing that 
stakeholders may nominate potentially misvalued codes by submitting the 
code with supporting documentation during the 60-day public comment 
period following the release of the annual PFS final rule with comment 
period. We would evaluate the supporting documentation and decide 
whether the nominated code should be reviewed as potentially misvalued 
during the following year. If we were to receive an overwhelming number 
of nominated codes that qualified as potentially misvalued in any given 
year, we would prioritize the codes for review and could decide to hold 
our review of some of the potentially misvalued codes for a future 
year. We note that we may identify additional potentially misvalued 
codes for review by the AMA RUC based on the seven statutory categories 
under section 1848(c)(2)(K)(ii) of the Act.
    We encourage stakeholders who believe they have identified a 
potentially misvalued code, supported by documentation, to nominate 
codes through the public process. We emphasize that in order to ensure 
that a nominated code will be fully considered to qualify as a 
potentially misvalued code to be reviewed under our annual process, 
accompanying documentation must be provided to show evidence of the 
code's inappropriate valuation, either in terms of inappropriate 
physician times, work RVUs, and/or direct PE inputs. The AMA RUC 
developed certain ``Guidelines for Compelling Evidence'' for the Third 
Five-Year Review which we believe could be applicable for members of 
the public as they gather supporting documentation for codes they wish 
to publicly nominated for the annual review of potentially misvalued 
codes. The specific documentation that we would seek under this 
proposal includes the following:
     Documentation in the peer reviewed medical literature or 
other reliable data that there have been changes in physician work due 
to one or more of the following:
    ++ Technique.
    ++ Knowledge and technology.
    ++ Patient population.
    ++ Site-of-service.
    ++ Length of hospital stay.
    ++ Physician time.
     An anomalous relationship between the code being proposed 
for review and other codes. For example, if code ``A'' describes a 
service that requires more work than codes ``B,'' ``C,'' and ``D,'' but 
is nevertheless valued lower. The commenter would need to assemble 
evidence on service time, technical skill, patient severity, 
complexity, length of stay and other factors for the code being 
considered and the codes to which it is compared. These reference 
services may be both inter- and intra-specialty.
     Evidence that technology has changed physician work, that 
is, diffusion of technology.
     Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
     Evidence that incorrect assumptions were made in the 
previous valuation of the service, such as a misleading vignette, 
survey, or flawed crosswalk assumptions in a previous evaluation;
     Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
     Analyses of physician time, work RVU, or direct PE inputs 
using other data sources (for example, Department of Veteran Affairs 
(VA) National Surgical Quality Improvement Program (NSQIP), the Society 
for Thoracic Surgeons (STS), and the Physician Quality Reporting 
Initiative (PQRI) databases).
     National surveys of physician time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    We note that when a code is nominated, and supporting documentation 
is provided, we would expect to receive a description of the reasons 
for the code's misvaluation with the submitted materials. That is, we 
would require a description and summary of the evidence is required 
that shows how the service may have changed since the original 
valuation or may have been inappropriately valued due to an incorrect 
assumption. We would also appreciate specific Federal Register 
citations, if they exist, where commenters believe the nominated codes 
were previously valued erroneously. We are also proposing to consider 
only nominations of active codes that are covered by Medicare at the 
time of the nomination.
    After we receive the nominated codes during the 60-day comment 
period following the release of the annual PFS final rule with comment 
period, we intend to review the supporting documentation and determine 
whether they appear to be potentially misvalued codes appropriate for 
review under the annual process. We are proposing that, in the 
following PFS proposed rule, we would publish a list of the codes 
received under the public nomination process during the previous year 
and

[[Page 42793]]

indicate whether the codes would be included in our annual review of 
potentially misvalued codes. We would also indicate the codes that we 
would not be including in our annual review, whether due to 
insufficient documentation or for other reasons. Under this proposed 
process, the first opportunity for the public to nominate codes would 
be during the public comment period for the CY 2012 PFS final rule with 
comment period. We would publish in the CY 2013 PFS proposed rule, the 
list of nominated codes, and whether they will be reviewed as 
potentially misvalued codes. We would request the AMA RUC review these 
potentially misvalued codes identified by the public, along with any 
other codes identified by us, and provide to us recommendations for 
appropriate physician times, work RVUs, and direct PE inputs. We are 
soliciting public comments on this proposed code nomination process and 
we will consider any suggestions to modify and improve the proposed 
process.
5. CY 2012 Identification and Review of Potentially Misvalued Services
a. Code Lists
    While we anticipate receiving nominations from the public for 
potentially misvalued codes in conjunction with rulemaking, we believe 
it is imperative that we continue the work of the review initiatives 
over the last several years and drive the agenda forward to identify, 
review, and adjust values for potentially misvalued codes for CY 2012.
    In the CY 2011 PFS proposed rule (75 FR 40068 through 40069), we 
identified, and referred to the AMA RUC, a list of potentially 
misvalued codes in three areas:
     Codes on the AMA RUC's multi-specialty points of 
comparison (MPC) list (used as reference codes in the valuation of 
other codes),
     Services with low work RVUs that are billed in multiples 
(a statutory category); and
     Codes that have low work RVUs for which CMS claims data 
show high volume (that is, high utilization of these codes represents a 
significant dollar impact in the payment system).
    Our understanding is that the AMA RUC is currently working towards 
reviewing these codes at our request. We intend to provide an update 
and discuss any RVU adjustments to codes that have been identified as 
potentially misvalued in the CY 2012 PFS final rule, as they move 
through the review process.
    Meanwhile, for CY 2012, we are continuing with the work to identify 
and review additional services under the potentially misvalued codes 
initiative. Stakeholders have noted that many of the services 
previously identified under the potentially misvalued codes initiative 
were concentrated in certain specialties. To develop a robust and 
representative list of codes for review under the potentially misvalued 
codes initiative, we examined the highest PFS expenditure services by 
specialty (based on our most recently available claims data and using 
the specialty categories listed in the PFS specialty impact table, see 
Table 64 in section VII.B. of this proposed rule) and identified those 
that have not been reviewed since CY 2006 (which was the year we 
completed the Third Five-Year Review of Work and before we began our 
potentially misvalued codes initiative).
    In our examination of the highest PFS expenditure codes for each 
specialty (we used the specialty categories listed in the PFS specialty 
impact table, see Table 64 in section VII.B. of this proposed rule), we 
noted that E/M services consistently appeared in the top 20 high PFS 
expenditure services. We noted as well that most of the E/M services 
have not been reviewed since the comprehensive review of services for 
the Third Five-Year Review of Work in CY 2006. Therefore, after an 
examination of the highest PFS expenditure codes for each specialty, we 
have developed two code lists of potentially misvalued codes which we 
are proposing to refer to the AMA RUC for review.
    First, we are requesting that the AMA RUC conduct a comprehensive 
review of all E/M codes, including the codes listed in Table 6. During 
the intervening years, there has been significant interest in delivery 
system reform, such as patient-centered medical homes and making the 
primary care physician the focus of managing the patient's chronic 
conditions. The chronic conditions challenging the Medicare population 
include heart disease, diabetes, respiratory disease, breast cancer, 
allergy, Alzheimer's disease, and factors associated with obesity. 
Thus, as the focus of primary care has evolved from an episodic 
treatment-based orientation to a focus on comprehensive patient-
centered care management in order to meet the challenges of preventing 
and managing chronic disease, we believe a more current review of E/M 
codes is warranted. We note that although physicians in primary care 
specialties bill a high percentage of their services using the E/M 
codes, physicians in non-primary care specialties also bill these codes 
for some of their services.
    Since we believe the focus of primary care has evolved to meet the 
challenges of preventing and managing chronic disease since the last 
comprehensive review of the E/M codes, we would like the AMA RUC to 
prioritize review of the E/M codes and provide us with recommendations 
on the physician times, work RVUs and direct PE inputs of at least half 
of the E/M codes listed in Table 6 by July 2012 in order for us to 
include any revised valuations for these codes in the CY 2013 PFS final 
rule with comment period. We would expect the AMA RUC to review the 
remaining E/M codes listed in Table 6 by July 2013 in order for us to 
complete the comprehensive re-evaluation of E/M services and include 
the revised valuations for these codes in the CY 2014 PFS final rule 
with comment period.

             Table 6--E/M Codes Referred for AMA RUC Review
------------------------------------------------------------------------
            CPT Code                         Short descriptor
------------------------------------------------------------------------
99201...........................  Office/outpatient visit new
99202...........................  Office/outpatient visit new
99203...........................  Office/outpatient visit new
99204...........................  Office/outpatient visit new
99205...........................  Office/outpatient visit new
99211...........................  Office/outpatient visit est
99212...........................  Office/outpatient visit est
99213...........................  Office/outpatient visit est
99214...........................  Office/outpatient visit est
99215...........................  Office/outpatient visit est
99217...........................  Observation care discharge
99218...........................  Initial observation care
99219...........................  Initial observation care
99220...........................  Initial observation care
99221...........................  Initial hospital care
99222...........................  Initial hospital care
99223...........................  Initial hospital care
99224...........................  Subsequent observation care
99225...........................  Subsequent observation care
99226...........................  Subsequent observation care
99231...........................  Subsequent hospital care
99232...........................  Subsequent hospital care
99233...........................  Subsequent hospital care
99234...........................  Observ/hosp same date
99235...........................  Observ/hosp same date
99236...........................  Observ/hosp same date
99238...........................  Hospital discharge day
99239...........................  Hospital discharge day
99281...........................  Emergency dept visit
99282...........................  Emergency dept visit
99283...........................  Emergency dept visit
99284...........................  Emergency dept visit
99285...........................  Emergency dept visit
99291...........................  Critical care first hour
99292...........................  Critical care addl 30 min
99304...........................  Nursing facility care init
99305...........................  Nursing facility care init
99306...........................  Nursing facility care init
99307...........................  Nursing fac care subseq
99308...........................  Nursing fac care subseq
99309...........................  Nursing fac care subseq
99310...........................  Nursing fac care subseq

[[Page 42794]]

 
99315...........................  Nursing fac discharge day
99316...........................  Nursing fac discharge day
99318...........................  Annual nursing fac assessmnt
99324...........................  Domicil/r[dash]home visit new pat
99325...........................  Domicil/r[dash]home visit new pat
99326...........................  Domicil/r[dash]home visit new pat
99327...........................  Domicil/r[dash]home visit new pat
99328...........................  Domicil/r[dash]home visit new pat
99334...........................  Domicil/r[dash]home visit est pat
99335...........................  Domicil/r[dash]home visit est pat
99336...........................  Domicil/r[dash]home visit est pat
99337...........................  Domicil/r[dash]home visit est pat
99341...........................  Home visit new patient
99342...........................  Home visit new patient
99343...........................  Home visit new patient
99344...........................  Home visit new patient
99345...........................  Home visit new patient
99347...........................  Home visit est patient
99348...........................  Home visit est patient
99349...........................  Home visit est patient
99350...........................  Home visit est patient
99354...........................  Prolonged service office
99355...........................  Prolonged service office
99356...........................  Prolonged service inpatient
99357...........................  Prolonged service inpatient
99406...........................  Behav chng smoking 3-10 min
99407...........................  Behav chng smoking > 10 min
99460...........................  Init nb em per day hosp
99461...........................  Init nb em per day non[dash]fac
99462...........................  Sbsq nb em per day hosp
99463...........................  Same day nb discharge
99464...........................  Attendance at delivery
99465...........................  Nb resuscitation
99466...........................  Ped crit care transport
99467...........................  Ped crit care transport addl
99468...........................  Neonate crit care initial
99469...........................  Neonate crit care subsq
99471...........................  Ped critical care initial
99472...........................  Ped critical care subsq
99475...........................  Ped crit care age 2-5 init
99476...........................  Ped crit care age 2-5 subsq
99477...........................  Init day hosp neonate care
99478...........................  Ic lbw inf < 1500 gm subsq
99479...........................  Ic lbw inf 1500-2500 g subsq
99480...........................  Ic inf pbw 2501-5000 g subsq
92002...........................  Eye exam new patient
92004...........................  Eye exam new patient
92012...........................  Eye exam established pat
92014...........................  Eye exam & treatment
------------------------------------------------------------------------

    Second, we are also providing a select list of high PFS expenditure 
procedural codes representing services furnished by an array of 
specialties, as listed in Table 7. These procedural codes have not been 
reviewed since CY 2006 (before we began our potentially misvalued codes 
initiatives in CY 2008) and, based on the most recently available data, 
have CY 2010 allowed charges of greater than $10 million at the 
specialty level (based on the specialty categories listed in the PFS 
specialty impact table and CY 2010 Medicare claims data). A number of 
the codes in Table 7 would not otherwise be identified as potentially 
misvalued services using the screens we have used in recent years with 
the AMA RUC or based on one of the six specific statutory categories 
under section 1848(c)(2)(k)(ii) of the Act. However, we identified the 
potentially misvalued codes listed in Table 7 under the seventh 
statutory category, ``other codes determined to be appropriate by the 
Secretary.'' We selected these codes based on the fact that they have 
not been reviewed for at least 6 years, and in many cases the last 
review occurred more than 10 years ago. They represent high Medicare 
expenditures under the PFS; thus, we believe that a review to assess 
changes in physician work and update direct PE inputs is warranted. 
Furthermore, since these codes have significant impact on PFS payment 
on a specialty level, a review of the relativity of the code to ensure 
that the work and PE RVUs are appropriately relative within the 
specialty and across specialties, as discussed previously, is 
essential. For these reasons, we have identified these codes as 
potentially misvalued and are requesting that the AMA RUC review the 
codes listed in Table 7 and provide us with recommendations on the 
physician times, work RVUs and direct PE inputs in a timely manner. 
That is, similar to our request for the AMA RUC to review E/M codes in 
a timely manner, we are requesting that the AMA RUC review at least 
half of the procedural codes listed in Table 7 by July 2012 in order 
for us to include any revised valuations for these codes in the CY 2013 
PFS final rule with comment period.

  Table 7--Select List of Procedural Codes Referred for AMA RUC Review
------------------------------------------------------------------------
            CPT Code                         Short descriptor
------------------------------------------------------------------------
95117...........................  Immunotherapy Injections
33533...........................  Cabg, Arterial, Single
33405...........................  Replacement Of Aortic Valve
33430...........................  Replacement Of Mitral Valve
93015...........................  Cardiovascular Stress Test
93880...........................  Extracranial Study
93000...........................  Electrocardiogram, Complete
17311...........................  Mohs, 1 Stage, H/N/Hf/G
17312...........................  Mohs Addl Stage
17004...........................  Destroy Premlg Lesions 15+
45378...........................  Diagnostic Colonoscopy
43235...........................  Uppr Gi Endoscopy, Diagnosis
47562...........................  Laparoscopic Cholecystectomy
47563...........................  Laparo Cholecystectomy/Graph
49505...........................  Prp I/Hern Init Reduc > 5 Yr
96413...........................  Chemo, Iv Infusion, 1 Hr
96367...........................  Tx/Proph/Dg Addl Seq Iv Inf
96365...........................  Ther/Proph/Diag Iv Inf, Init
62311...........................  Inject Spine L/S (Cd)
35476...........................  Repair Venous Blockage
36870...........................  Percut Thrombect Av Fistula
35475...........................  Repair Arterial Blockage
95903...........................  Motor Nerve Conduction Test
95819...........................  Eeg, Awake And Asleep
95861...........................  Muscle Test, 2 Limbs
22612...........................  Lumbar Spine Fusion
63047...........................  Removal Of Spinal Lamina
22851...........................  Apply Spine Prosth Device
76830...........................  Transvaginal Us, Non[dash]Ob
67028...........................  Injection Eye Drug
92235...........................  Eye Exam With Photos
66982...........................  Cataract Surgery, Complex
27447...........................  Total Knee Arthroplasty
27130...........................  Total Hip Arthroplasty
27236...........................  Treat Thigh Fracture
69210...........................  Remove Impacted Ear Wax
31237...........................  Nasal/Sinus Endoscopy, Surg
88342...........................  Immunohistochemistry
88112...........................  Cytopath, Cell Enhance Tech
88312...........................  Special Stains Group 1
97140...........................  Manual Therapy
90862...........................  Medication Management
90801...........................  Psy Dx Interview
90805...........................  Psytx, Off, 20[dash]30 Min W/E&M
94720...........................  Monoxide Diffusing Capacity
94240...........................  Residual Lung Capacity
77014...........................  Ct Scan For Therapy Guide
77301...........................  Radiotherapy Dose Plan, Imrt
77421...........................  Stereoscopic X[dash]Ray Guidance
70450...........................  Ct Head/Brain W/O Dye
70553...........................  Mri Brain W/O & W/Dye
72148...........................  Mri Lumbar Spine W/O Dye
20610...........................  Drain/Inject, Joint/Bursa
53850...........................  Prostatic Microwave Thermotx
50590...........................  Fragmenting Of Kidney Stone
76872...........................  Us, Transrectal
35301...........................  Rechanneling Of Artery
98941...........................  Chiropractic Manipulation
98940...........................  Chiropractic Manipulation
98942...........................  Chiropractic Manipulation
90806...........................  Psytx, Off, 45-50 Min
90818...........................  Psytx, Hosp, 45-50 Min
90808...........................  Psytx, Office, 75-80 Min
72141...........................  Mri Neck Spine W/O Dye
73221...........................  Mri Joint Upr Extrem W/O Dye
70551...........................  Mri Brain W/O Dye
92083...........................  Visual Field Examination(S)
97530...........................  Therapeutic Activities
97112...........................  Neuromuscular Reeducation
97001...........................  Pt Evaluation
------------------------------------------------------------------------

b. Specific Codes
    On an ongoing basis, public stakeholders (including physician 
specialty societies, beneficiaries, and other members of the public) 
bring concerns to us regarding direct PE inputs and physician work. In 
the past, we would consider these concerns and address them through 
proposals in annual rulemaking, technical corrections, or by requesting 
that the AMA RUC consider the issue.
    Since last year's rulemaking, the public has brought a series of 
issues to our attention that relate directly to direct PE inputs and 
physician work. We believe that some of these issues will serve as 
examples of codes that might be brought forward by the public

[[Page 42795]]

as potentially misvalued in the proposed nomination process as 
discussed previously in section II.B.4. of this proposed rule.
(1) Codes Potentially Requiring Updates to Direct PE Inputs
    Abdomen and Pelvis CT. For CY 2011, AMA CPT created a series of new 
codes that describe combined CTs of the abdomen and pelvis. Prior to 
2011, these services would have been billed using multiple stand-alone 
codes for each body region. The new codes are: 74176 (Computed 
tomography, abdomen and pelvis; without contrast material); 74177 
(Computed tomography, abdomen and pelvis; with contrast material); and 
74178 (Computed tomography, abdomen and pelvis; without contrast 
material in one or both body regions, followed by with contrast 
material(s) and further sections in one or both body regions.)
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73350), we accepted the AMA RUC- recommended direct PE inputs for these 
codes, with refinements to the equipment minutes to assure that the 
time associated with the equipment items reflected the time during the 
intra-service period when a clinician is using the piece of equipment, 
plus any additional time the piece of equipment is not available for 
use for another patient due to its use during the designated procedure. 
We believe that the direct PE inputs of the new codes reflect the 
typical resources required to furnish the services in question.
    However, stakeholders have alerted us that the resulting PE RVUs 
for the new codes reflect an anomalous rank order in comparison to the 
previously existing stand-alone codes. Specifically, the PE RVUs for 
the codes that describe CT scans without contrast for either body 
region are greater than the PE RVUs for 74176, which describes a CT 
scan of both body regions. We believe that the anomalous rank order of 
the PE RVUs for this series of codes may be the result of outdated 
direct PE inputs for the previously existing stand-alone codes. The 
physician work for those codes was last reviewed by the AMA RUC during 
the Third Five-Year Review of Work for CY 2007. However, the direct PE 
inputs for the codes have not been reviewed since 2003. Therefore, we 
are requesting that the AMA RUC review both the direct PE inputs and 
work values of the following codes in accordance with the consolidated 
approach to reviewing potentially misvalued codes as outlined in 
section II.B.2.c. of this proposed rule:
     72192 Computed tomography, pelvis; without contrast 
material
     72193 Computed tomography, pelvis; with contrast 
material(s)
     72194 Computed tomography, pelvis; without contrast 
material, followed by contrast material(s) and further sections
     74150 Computed tomography, abdomen; without contrast 
material
     74160 Computed tomography, abdomen; with contrast 
material(s)
     74170 Computed tomography, abdomen; without contrast 
material, followed by contrast material(s) and further sections
    Tissue Pathology. A stakeholder informed us that the direct PE 
inputs associated with a particular tissue examination code are 
atypical. Specifically, the stakeholder suggested that the AMA RUC 
relied upon an atypical clinical vignette in identifying the direct PE 
inputs for the service associated with CPT code 88305 (Level IV--
Surgical pathology, gross and microscopic examination Abortion--
spontaneous/missed, Artery, biopsy, Bone marrow, biopsy, Bone 
exostosis, Brain/meninges, other than for tumor resection, Breast, 
biopsy, not requiring microscopic evaluation of surgical margins, 
Breast, reduction mammoplasty, Bronchus, biopsy, Cell block, any 
source, Cervix, biopsy, Colon, biopsy, Duodenum, biopsy, Endocervix, 
curettings/biopsy, Endometrium, curettings/biopsy, Esophagus, biopsy, 
Extremity, amputation, traumatic, Fallopian tube, biopsy, Fallopian 
tube, ectopic pregnancy, Femoral head, fracture, Fingers/toes, 
amputation, non-traumatic, Gingiva/oral mucosa, biopsy, Heart valve, 
Joint, resection, Kidney, biopsy, Larynx, biopsy, Leiomyoma(s), uterine 
myomectomy--without uterus, Lip, biopsy/wedge resection, Lung, 
transbronchial biopsy, Lymph node, biopsy, Muscle, biopsy, Nasal 
mucosa, biopsy, Nasopharynx/oropharynx, biopsy, Nerve, biopsy, 
Odontogenic/dental cyst, Omentum, biopsy, Ovary with or without tube, 
non-neoplastic, Ovary, biopsy/wedge resection, Parathyroid gland, 
Peritoneum, biopsy, Pituitary tumor, Placenta, other than third 
trimester, Pleura/pericardium--biopsy/tissue, Polyp, cervical/
endometrial, Polyp, colorectal, Polyp, stomach/small intestine, 
Prostate, needle biopsy, Prostate, TUR, Salivary gland, biopsy, Sinus, 
paranasal biopsy, Skin, other than cyst/tag/debridement/plastic repair, 
Small intestine, biopsy, Soft tissue, other than tumor/mass/lipoma/
debridement, Spleen, Stomach, biopsy, Synovium, Testis, other than 
tumor/biopsy/castration, Thyroglossal duct/brachial cleft cyst, Tongue, 
biopsy, Tonsil, biopsy, Trachea, biopsy, Ureter, biopsy, Urethra, 
biopsy, Urinary bladder, biopsy, Uterus, with or without tubes and 
ovaries, for prolapse, Vagina, biopsy, Vulva/labia, biopsy).
    The stakeholder claims that in furnishing the typical service, the 
required material includes a single block of tissue and 1-3 slides. The 
stakeholder argues that the typical costs for the service amount is 
approximately $18, but the PE RVUs for 2011 result in a national 
payment rate of $69.65 for the technical component of the service. 
Because the direct PE inputs associated with this code have not been 
reviewed since 1999, we are asking that the AMA RUC review both the 
direct PE inputs and work values of this code as soon as possible in 
accordance with the consolidated approach to reviewing potentially 
misvlaued codes as outlined in section II.B.2.c. of this proposed rule 
though the work for this code was reviewed in April 2010.
    In Situ Hybridization Testing. We received comments from the Large 
Urology Group Practice Association (LUGPA) regarding two new 
cytopathology codes that describe in situ hybridization testing of 
urine specimens. Prior to CY 2011, all in situ hybridization testing 
was coded and billed using CPT Codes 88365 (In situ hybridization (eg, 
FISH), each probe), 88367 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; using computer-assisted 
technology) and 88368 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; manual). The 
appropriate CPT code listed would be billed one time for each probe 
used in the performance of the test, regardless of the medium of the 
specimen (that is, blood, tissue, tumor, bone marrow or urine).
    For CY 2011, the AMA's CPT Editorial Panel created two new 
cytopathology codes that describe in situ hybridization testing using 
urine samples: CPT code 88120 (Cytopathology, in situ hybridization 
(eg, FISH), urinary tract specimen with morphometric analysis, 3-5 
molecular probes, each specimen; manual) and CPT code 88121 
(Cytopathology, in situ hybridization (eg, FISH), urinary tract 
specimen with morphometric analysis, 3-5 molecular probes, each 
specimen; using computer-assisted technology).
    Because the descriptors indicate that the new codes account for 
approximately 4 probes, whereas 88367 and 88368 describe each probe, 
there are more PE RVUs associated with the new codes than with the 
previously existing codes that are currently still used for any 
specimen except for urine.

[[Page 42796]]

However, because the previously existing codes are billed per probe, 
the payment for a test using a different specimen type could vary 
depending upon the number of probes. For example, a practitioner 
furnishing a test involving a blood specimen and using two probes would 
bill CPT code 88368 (total RVUs: 6.28) three times with the result of 
18.84 RVUs. A practitioner furnishing the same test but using a urine 
sample instead of a blood sample would receive payment based on the 
13.47 RVUs associated with CPT code 88120.
    CMS accepted the RUC- recommended work values and direct PE inputs, 
without refinement, for the two new cytopathology codes that describe 
in situ hybridization testing using urine samples. We have reviewed the 
direct PE recommendations made by the AMA RUC and, at this time, 
believe that these inputs are appropriate.
    However, we share LUGPA's concerns regarding the potential payment 
discrepancies between the codes that describe the same test using 
different specimen media. Therefore, we are asking the AMA RUC to 
review the both the direct PE inputs and work values of the following 
codes in accordance with the consolidated approach to reviewing 
potentially misvlaued codes as outlined in section II.B.2.c. of this 
proposed rule: CPT codes 88365 (In situ hybridization (e.g., FISH), 
each probe); 88367 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; using computer-assisted 
technology); and 88368 (Morphometric analysis, in situ hybridization 
(quantitative or semi-quantitative) each probe; manual.)
    (2) Codes Without Direct Practice Expense Inputs in the Non-
Facility Setting
    Certain stakeholders have requested that we create nonfacility PE 
values for a series of kyphoplasty services CPT codes:
     22523 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); thoracic),
     22524 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); lumbar).
     22525 (Percutaneous vertebral augmentation, including 
cavity creation (fracture reduction and bone biopsy included when 
performed) using mechanical device, 1 vertebral body, unilateral or 
bilateral cannulation (e.g., kyphoplasty); each additional thoracic or 
lumbar vertebral body (List separately in addition to code for primary 
procedure).
    In the case of these codes, we are asking the RUC to make 
recommendations regarding the appropriateness of creating nonfacility 
direct PE inputs. If the RUC were to recommend direct PE 
recommendations, we would review those recommendations as part of the 
annual process.
    Ultrasound Equipment. A stakeholder has raised concern about 
potential inconsistencies with the inputs and the prices related to 
ultrasound equipment in the direct PE database. Upon reviewing inputs 
and prices for ultrasound equipment, we have noted that there are 17 
different pieces of ultrasound and ultrasound-related equipment in the 
database that are associated with 110 CPT Codes. The price inputs for 
ultrasound equipment range from $1,304.33 to $466,492.00. Therefore, we 
are asking the AMA RUC to review the ultrasound equipment included in 
those codes as well as how the way the equipment is described and 
priced in the direct PE database.
    In the past, the AMA RUC has provided us with valuable 
recommendations regarding particular categories of equipment and supply 
items that are used as direct PE inputs for a range of codes. For 
example, in the 2011 PFS final rule (75 FR 73204), we made changes to a 
series of codes following the RUC's review of services that include the 
radiographic fluoroscopic room (CMS Equipment Code EL014) as a direct 
PE input. The RUC review revealed the use of the item to no longer be 
typical for certain services in which it had been specified within the 
direct cost inputs. These recommendations have often prompted our 
proposals that have served to maintain appropriate relativity within 
the PFS, and we hope that the RUC will continue to address issues 
relating to equipment and supply inputs that affect many codes. 
Furthermore, we believe that in these kinds of cases, it may be 
appropriate to make changes to the related direct PE inputs for a 
series of codes without reevaluating the physician work or other direct 
PE inputs for the individual codes. In other words, while we generally 
believe that both the work and the direct practice expense inputs 
should be reviewed whenever the RUC makes recommendations regarding 
either component of a code's value, we recognize the value of discrete 
RUC reviews of direct PE items that serve as inputs for a series of 
service codes.
    (3) Codes Potentially Requiring Updates to Physician Work
    Cholecystectomy. We received a comment regarding a potential 
relativity problem between two cholecystectomy (gall bladder removal) 
CPT codes. CPT code 47600 (Cholecystectomy;) has a work RVU of 17.48, 
and CPT code 47605 (Cholecystectomy; with cholangiography) has a work 
RVU of 15.98. Upon examination of the physician time and visits 
associated with these codes, we found that CPT code 47600 includes 115 
minutes of intra-service time and a total time of 420 minutes, 
including 3 office visits, 3 subsequent hospital care days, and 1 
hospital discharge management day. CPT code 47605 includes 90 minutes 
of intra-service time and a total time of 387 minutes, including 2 
office visits, 3 subsequent hospital care days, and 1 hospital 
discharge management day. We believe that the difference in physician 
time and visits is the cause for the difference in work RVU for these 
codes. However, upon clinical review, it does not appear that these 
visits appropriately reflect the relativity of these two services, as 
CPT code 47600 should not have more time and visits associated with the 
service than CPT code 47605. Therefore, we are asking the AMA RUC to 
review these two cholecystectomy CPT codes, 47600 and 47605.
    We thank the public for bringing these issues to our attention and 
kindly request that the public continue to do so. Please see section 
II.B.4. of this proposed notice for more information on the proposed 
public process for the nomination of potentially misvalued codes.
6. Code-Specific Issues
a. CY 2012 Codes With Site-of-Service Anomalies
(1) Background
    The AMA RUC reviewed a number of site-of-service anomaly codes for 
CY 2012, many of which are site-of-service anomaly codes that have had 
interim values in place since CY 2009. These are CPT codes that have 
experienced a change in the typical site-of-service since the original 
valuation of the codes. Specifically, these codes were originally 
furnished in the inpatient setting, but Medicare claims data show that 
the typical case has shifted to being furnished in the outpatient 
setting. Since the procedures were typically furnished in the inpatient 
setting when the codes were originally valued, the work RVUs for these 
codes would have

[[Page 42797]]

been valued to include the inpatient physician work furnished, as well 
as to reflect the intensive follow-up care normally associated with an 
inpatient procedure. As we discussed in the CY 2011 final rule with 
comment period (75 FR 73221), when the typical case for a service has 
shifted from the inpatient setting to an outpatient or physician's 
office setting, we do not believe the inclusion of inpatient hospital 
visits in the post-operative period is appropriate. For example, 
inpatient E/M visit codes such as CPT codes 99231 (Level 1 subsequent 
hospital care, per day); 99232 (Level 2 subsequent hospital care, per 
day); and 99233 (Level 3 subsequent hospital care, per day), should not 
be included in the valuation of these services. Additionally, we 
believe that it is reasonable to expect that there have been changes in 
medical practice for these services, and that such changes would 
represent a decrease in physician time or intensity or both. The AMA 
RUC reviewed 40 CPT codes that were identified as having site-of-
service anomalies and recommended revised RVUs to CMS for 29 codes for 
CY 2009 and 11 codes for CY 2010. In the CY 2010 PFS proposed rule and 
final rule with comment period (74 FR 33556 and 74 FR 61777, 
respectively), we encouraged the AMA RUC to utilize the building block 
methodology when revaluing services with site-of-service anomalies. In 
the CY 2011 PFS final rule with comment period (75 FR 73221), we also 
stated that in the CYs 2009 and 2010 PFS final rules with comment 
period (73 FR 69883 and 74 FR 61776 through 61778, respectively), we 
indicated that although we would accept the AMA RUC valuations for 
these site-of-service anomaly codes on an interim basis through CY 
2010, we had ongoing concerns about the methodology used by the AMA RUC 
to value these services. We requested that the AMA RUC re-examine the 
site-of-service anomaly codes and adjust the work RVU, time, and post-
service visits to reflect those typical of a service furnished in an 
outpatient or physician's office setting.
    Following our request in the CY 2011 PFS final rule with comment 
period, the AMA RUC re-reviewed these site-of-service anomaly codes and 
recommended work RVUs to us. Of the 40 CPT codes on the CY 2009 and CY 
2010 site-of-service anomaly code lists in the CY 2011 PFS final rule 
with comment period, 1 CPT code was not re-reviewed, as it was 
addressed in the CY 2011 PFS final rule with comment period as a part 
of the vagal nerve stimulator family of services. Ten of the remaining 
39 site-of-service anomaly codes were addressed in the Five-Year Review 
of Work, published in the Federal Register on June 6, 2011 (76 FR 
32410). The remaining 29 CPT codes are addressed in this CY 2012 PFS 
proposed rule. We will summarize and respond to public comments, and 
adopt final work RVUs for all 40 CPT codes on the CY 2009 and CY 2010 
site-of-service anomaly lists in the CY 2012 PFS final rule with 
comment period. In addition, several other CPT codes have since been 
identified as having site-of-service anomalies and were addressed in 
the Five-Year Review of Work (76 FR 32410). We will respond to public 
comments and adopt final work values for these codes in the CY 2012 PFS 
final rule with comment period. A complete list of the 40 CPT codes 
with site-of-service anomalies identified in CY 2009 and CY 2010, the 
rule in which each code was addressed, the AMA RUC- recommended work 
RVU, and the CMS proposed or interim work RVU can be found in Table 8.
    When Medicare claims data show that the typical setting for a CPT 
code has shifted from the inpatient setting to the outpatient setting, 
we continue to believe that the work RVU, time, and post-service visits 
of the code should reflect the current outpatient setting. For many of 
the site-of-service anomaly CPT codes, we believe that the AMA RUC 
appropriately accounted for this site-of-service shift in its 
recommendations to us, and we agree with the AMA RUC-recommended work 
RVU for 19 of the 40 CY 2009 and CY 2010 site-of-service anomaly codes. 
However, we found that for the remainder of these site-of-service 
anomaly codes (21 of 40), the AMA RUC often recommended maintaining 
inpatient visits or removing inpatient visits and/or time without a 
corresponding decrease in work RVU. In those cases, we disagreed with 
the AMA RUC-recommended work RVU and adjusted the work RVU, time, and 
visits to reflect those typical of a service furnished in an outpatient 
or physician's office setting. In the Fourth Five-Year Review of Work 
(76 FR 32410), we discussed in detail our methodology for revaluing the 
site-of-service anomaly codes addressed in that proposed notice. We 
continue that discussion here, and a full description of our 
methodology for revaluing the site-of-service anomaly codes for CY 2012 
is included later in this section.

                                             Table 8--CMS Decisions on Codes With Site-of-Service Anomalies
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                 CMS
                                                                          CMS Work RVU decision         AMA RUC         CMS  Work  RVU        Proposed/
               CPT Code                       Short descriptor                 publication            Recommended          decision            interim
                                                                                                       work RVU                               Work RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
21025................................  Excision of bone, lower jaw..  CY 2012 PFS NPRM.............         10.03  Agree..................         10.03
23415................................  Release of shoulder ligament.  CY 2012 PFS NPRM.............          9.23  Agree..................          9.23
25116................................  Remove wrist/forearm lesion..  CY 2012 PFS NPRM.............          7.56  Agree..................          7.56
28120................................  Part removal of ankle/heel...  Fourth Five-Year Review of             8.27  Disagree...............          7.31
                                                                       Work.
28122................................  Partial removal of foot bone.  Fourth Five-Year Review of             7.72  Disagree...............          6.76
                                                                       Work.
28725................................  Fusion of foot bones.........  CY 2012 PFS NPRM.............         12.18  Disagree...............         11.22
28730................................  Fusion of foot bones.........  CY 2012 PFS NPRM.............         12.42  Disagree...............         10.70
36825................................  Artery[dash]vein autograft...  Fourth Five-Year Review of            15.13  Disagree...............         14.17
                                                                       Work.
42415................................  Excise parotid gland/lesion..  Fourth Five-Year Review of            18.12  Disagree...............         17.16
                                                                       Work.
42420................................  Excise parotid gland/lesion..  Fourth Five-Year Review of            21.00  Disagree...............         19.53
                                                                       Work.
42440................................  Excise submaxillary gland....  CY 2012 PFS NPRM.............          7.13  Disagree...............          6.14
49507................................  Prp i/hern init block >5 yr..  Fourth Five-Year Review of            10.05  Disagree...............          9.09
                                                                       Work.
49521................................  Rerepair ing hernia, blocked.  Fourth Five-Year Review of            12.44  Disagree...............         11.48
                                                                       Work.
49587................................  Rpr umbil hern, block > 5 yr.  Fourth Five-Year Review of             8.04  Disagree...............          7.08
                                                                       Work.
52341................................  Cysto w/ureter stricture tx..  CY 2012 PFS NPRM.............          5.35  Agree..................          5.35
52342................................  Cysto w/up stricture tx......  CY 2012 PFS NPRM.............          5.85  Agree..................          5.85
52343................................  Cysto w/renal stricture tx...  CY 2012 PFS NPRM.............          6.55  Agree..................          6.55
52344................................  Cysto/uretero, stricture tx..  CY 2012 PFS NPRM.............          7.05  Agree..................          7.05
52345................................  Cysto/uretero w/up stricture.  CY 2012 PFS NPRM.............          7.55  Agree..................          7.55

[[Page 42798]]

 
52346................................  Cystouretero w/renal strict..  CY 2012 PFS NPRM.............          8.58  Agree..................          8.58
52400................................  Cystouretero w/congen repr...  CY 2012 PFS NPRM.............          8.69  Agree..................          8.69
52500................................  Revision of bladder neck.....  CY 2012 PFS NPRM.............          8.14  Agree..................          8.14
52640................................  Relieve bladder contracture..  Fourth Five-Year Review of             4.79  Agree..................          4.79
                                                                       Work.
53445................................  Insert uro/ves nck sphincter.  CY 2012 PFS NPRM.............         15.39  Disagree...............         13.00
54410................................  Remove/replace penis prosth..  CY 2012 PFS NPRM.............         15.18  Agree..................         15.18
54530................................  Removal of testis............  CY 2012 PFS NPRM.............          8.46  Agree..................          8.46
57287................................  Revise/remove sling repair...  Fourth Five-Year Review of            11.15  Agree..................         11.15
                                                                       Work.
61885................................  Insrt/redo neurostim 1 array.  CY 2011 PFS Final Rule.......          6.44  Disagree...............          6.05
62263................................  Epidural lysis mult sessions.  CY 2012 PFS NPRM.............          6.54  Disagree...............          5.00
62350................................  Implant spinal canal cath....  CY 2012 PFS NPRM.............          6.05  Agree..................          6.05
62355................................  Remove spinal canal catheter.  CY 2012 PFS NPRM.............          4.35  Disagree...............          3.55
62360................................  Insert spine infusion device.  CY 2012 PFS NPRM.............          4.33  Agree..................          4.33
62361................................  Implant spine infusion pump..  CY 2012 PFS NPRM.............          5.65  Disagree...............          5.00
62362................................  Implant spine infusion pump..  CY 2012 PFS NPRM.............          6.10  Disagree...............          5.60
62365................................  Remove spine infusion device.  CY 2012 PFS NPRM.............          4.65  Disagree...............          3.93
63650................................  Implant neuroelectrodes......  CY 2012 PFS NPRM.............          7.20  Disagree...............          7.15
63685................................  Insrt/redo spine n generator.  CY 2012 PFS NPRM.............          6.05  Disagree...............          5.19
64708................................  Revise arm/leg nerve.........  CY 2012 PFS NPRM.............          6.36  Agree..................          6.36
64831................................  Repair of digit nerve........  CY 2012 PFS NPRM.............          9.16  Agree..................          9.16
65285................................  Repair of eye wound..........  CY 2012 PFS NPRM.............         16.00  Disagree...............         15.36
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Revised Work RVUs for Codes With Site-of-Service Anomalies
(A) Foot Arthrodesis

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work RVU          decision          work RVU
----------------------------------------------------------------------------------------------------------------
28725.............................  Fusion of foot bones......         12.18  Disagree............         11.22
28730.............................  Fusion of foot bones......         12.42  Disagree............         10.70
----------------------------------------------------------------------------------------------------------------

    For CPT code 28725 (Arthrodesis; subtalar) and 28730 (Arthrodesis, 
midtarsal or tarsometatarsal, multiple or transverse) the most recently 
available Medicare claims data suggests that these site-of-service 
anomaly codes could be ``23-hour stay'' outpatient services. As we 
discussed in the CY 2011 PFS final rule with comment period (75 FR 
73226 through 73227) and the Five-Year Review of Work (76 FR 32410), 
the ``23-hour stay service'' is a term of art describing services that 
typically have lengthy hospital outpatient recovery periods. For these 
23-hour stay services, the typical patient is commonly at the hospital 
for less than 24-hours, but often stays overnight at the hospital. 
Unless a treating physician has written an order to admit the patient 
as an inpatient, the patient is considered for Medicare purposes to be 
a hospital outpatient, not an inpatient, and our claims data support 
that the typical 23-hour stay service is billed as an outpatient 
service.
    As we discussed in the Five-Year Review of Work (76 FR 32410), we 
believe that the values of the codes that fall into the 23-hour stay 
category should not reflect work that is typically associated with an 
inpatient service. However, as we stated in the CY 2011 PFS final rule 
with comment period (75 FR 73226 through 73227), we find it is 
plausible that while the patient receiving the outpatient 23-hour stay 
service remains a hospital outpatient, the patient would typically be 
cared for by a physician during that lengthy recovery period at the 
hospital. While we do not believe that post-procedure hospital visits 
would be at the inpatient level since the typical case is an outpatient 
who would be ready to be discharged from the hospital in 23-hours or 
less, we believe it is generally appropriate to include the intra-
service time of the inpatient hospital visit in the immediate post-
service time of the 23-hour stay code under review. In addition, we 
indicated that we believe it is appropriate to include a half day, 
rather than a full day, of a discharge day management service. We 
finalized this policy in the CY 2011 PFS final rule with comment period 
(75 FR 73226 through 73227) and encouraged the AMA RUC to apply this 
methodology in developing the recommendations it provides to us for 
valuing 23-hour stay codes, in order to ensure the consistent and 
appropriate valuation of the physician work for these services.
    For CY 2010, CPT codes 28725 and 28730 were identified as 
potentially misvalued through the site-of-service anomaly screen and 
were reviewed by the AMA RUC. For both of these services, based on 
reference services and specialty survey data, the AMA RUC recommended 
maintaining the current (CY 2009) work RVU, which we then increased 
slightly based on the redistribution of RVUs that resulted from the CY 
2010 policy to no longer recognize the CPT consultation codes (74 FR 
61775). The AMA RUC re-reviewed CPT codes 28725 and 28730 for CY 2012 
and, contrary to the 23-hour stay policy we finalized in the CY 2011 
PFS final rule with comment period (75 FR 73226 through 73227), 
recommended replacing the hospital inpatient post-operative visit in 
the

[[Page 42799]]

current work values with a subsequent observation care service, 
specifically CPT code 99224 (Level 1 subsequent observation care, per 
day) and recommended maintaining the current interim value of the two 
CPT codes. Specifically, for CY 2012 the AMA RUC recommended a work RVU 
of 12.18 for CPT code 28725 and a work RVU of 12.42 for CPT code 28730.
    We disagree with the AMA RUC-recommended values for CPT codes 28725 
and 28730. We believe the appropriate methodology for valuing these 
codes entails accounting for the removal of the inpatient visits in the 
work value for the site-of-service anomaly codes since these services 
are no longer typically furnished in the inpatient setting. We do not 
believe it is appropriate to simply exchange the inpatient post-
operative visits in the original value with subsequent observation care 
visits and maintain the current work RVUs.
    As the data suggests, these two site-of-service anomaly codes 
resemble 23-hour stay outpatient services, and since the AMA RUC's 
recommended value continues to include inpatient visits (or subsequent 
observation care codes) in the post-operative period, we applied the 
23-hour stay policy described previously. Specifically, we removed the 
subsequent observation care service, reduced the one day of discharge 
management service to one-half day, and adjusted physician work RVUs 
and times accordingly. As a result, for CY 2012 we are proposing a work 
RVU of 11.22 for CPT code 28725, and a work RVU of 10.70 for CPT code 
28730, with aforementioned refinements to time. A complete list of CMS 
time refinements can be found in Table 9.
(B) Submandibular Gland Excision

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work RVU          decision          work RVU
----------------------------------------------------------------------------------------------------------------
42440.............................  Excise submaxillary gland.          7.13  Disagree............          6.14
----------------------------------------------------------------------------------------------------------------

    For CY 2009, CPT code 42440 (Excision of submandibular 
(submaxillary) gland) was identified as potentially misvalued through 
the site-of-service anomaly screen and was reviewed by the AMA RUC. 
Based on reference services and specialty survey data, the AMA RUC 
recommended maintaining the current (CY 2008) work RVU of 7.05 for this 
service and removing the inpatient subsequent hospital care visit 
blocks to reflect the current outpatient place of service. In CY 2010, 
while CMS adopted the AMA RUC-recommended work value on an interim 
final basis and referred the service back to the AMA RUC to be 
reexamined, the work RVU for CPT code 42440 used under the PFS was 
increased to 7.13 based on the redistribution of RVUs that resulted 
from our policy to no longer recognize the CPT consultation codes (74 
FR 61775). Upon re-review for CY 2012, the AMA RUC resubmitted its 
previous recommendation and again recommended that the current work RVU 
of 7.13 for CPT code 42440 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 7.13 for CPT 
code 42440 and believe a work RVU of 6.14 is more appropriate for this 
service. As stated previously, we believe the appropriate methodology 
for valuing site-of-service anomaly codes entails not just removing the 
inpatient visits, but also accounting for the removal of the inpatient 
visits in the work value of the CPT code. To appropriately revalue this 
CPT code to reflect an outpatient service we started with the original 
CY 2008 work RVU of 7.05 then, in accordance with the policy discussed 
in section II.B. of this proposed notice, we removed the value of the 
subsequent hospital care service and one-half discharge day management 
service, and added back the subsequent hospital care intra-service time 
to the immediate post-operative care service. As a result, we are 
proposing an alternative work RVU of 6.14 with refinements to the time 
for CPT code 42440 for CY 2012. A complete list of CMS time refinements 
can be found in Table 9.
(C) Urological Procedures

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work RVU          decision          work RVU
----------------------------------------------------------------------------------------------------------------
53445.............................  Insert uro/ves nck                 15.39  Disagree............         13.00
                                     sphincter.
54410.............................  Remove/replace penis               15.18  Agree...............         15.18
                                     prosth.
54530.............................  Removal of testis.........          8.46  Agree...............          8.46
----------------------------------------------------------------------------------------------------------------

    For CY 2009, CPT code 53445 (Insertion of inflatable urethral/
bladder neck sphincter, including placement of pump, reservoir, and 
cuff) was identified as potentially misvalued through the site-of-
service anomaly screen and was reviewed by the AMA RUC. The AMA RUC 
recommended that CPT code 53445 should be removed from the site-of-
service anomaly screen and that the current work RVU of 15.21 should be 
maintained because, although the Medicare claims data indicated that 
this service is predominately furnished in the outpatient setting, 
survey respondents indicated this service is typically furnished in the 
facility setting. In CY 2010, while we adopted the AMA RUC-recommended 
work value on an interim final basis and referred the service back to 
the AMA RUC to be reexamined, the work RVU for CPT code 53445 used 
under the PFS was increased to 15.39 based on the redistribution of 
RVUs that resulted from our policy to no longer recognize the CPT 
consultation codes (74 FR 61775). Upon re-review for CY 2012, the AMA 
RUC reaffirmed its previous recommendation. Despite Medicare claims 
data showing that this service is typically furnished in the outpatient 
setting, the AMA RUC believes it is appropriate for CPT code 53445 to 
have inpatient visits because the specialty society that most commonly 
furnishes these procedures asserts that the typical patient spends at 
least one night in the hospital. The AMA RUC has requested that the 
specialty society conduct an additional survey to address more 
specifically whether an overnight stay is

[[Page 42800]]

typical for CPT code 53445 and 54410. The AMA RUC recommended that the 
current work RVU of 15.39 for CPT code 53445 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 15.39 for CPT 
code 53445 and believe a work RVU of 13.00 is more appropriate for this 
service. As stated previously in our discussion of 23-hour stay codes, 
as well as in the CY 2010 PFS final rule with comment period (74 FR 
61777), even though a service may typically have a lengthy hospital 
outpatient recovery period, it should not reflect work that is 
typically associated with an inpatient service. Upon clinical review of 
this service and the time and visits associated with it, we believe 
that the survey 25th percentile work RVU of 13.00 appropriately 
accounts for the work required to furnish this service. Therefore, we 
are proposing a work RVU of 13.00 for CPT code 53445 for CY 2012.
(D) Epidural Lysis

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work  RVU         decision          work RVU
----------------------------------------------------------------------------------------------------------------
62263.............................  Epidural lysis mult                 6.54  Disagree............          5.00
                                     sessions.
----------------------------------------------------------------------------------------------------------------

    For CY 2009, CPT code 62263 (Percutaneous lysis of epidural 
adhesions using solution injection (eg, hypertonic saline, enzyme) or 
mechanical means (eg, catheter) including radiologic localization 
(includes contrast when administered), multiple adhesiolysis sessions; 
2 or more days,) was identified as potentially misvalued through the 
site-of-service anomaly screen and was reviewed by the AMA RUC. Based 
on reference services and specialty survey data, the AMA RUC 
recommended maintaining the current (CY 2008) work RVU of 6.41 for this 
service and removing the inpatient subsequent hospital care visits to 
reflect the current outpatient place of service. In CY 2010, while we 
adopted the AMA RUC-recommended work value on an interim final basis 
and referred the service back to the AMA RUC to be reexamined, the work 
RVU for CPT code 62263 used under the PFS was increased to 6.54 based 
on the redistribution of RVUs that resulted from our policy to no 
longer recognize the CPT consultation codes (74 FR 61775). Upon re-
review for CY 2012, the AMA RUC reaffirmed its previous recommendation 
and recommended that the current work RVU of 6.54 for CPT code 62263 be 
maintained.
    We disagree with the AMA RUC-recommended work RVU of 6.45 for CPT 
code 62263. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. Upon clinical 
review, we believe that the survey median work RVU of 5.00 
appropriately accounts for the removal of the inpatient visits as well 
as the increase in intra-service time and post-operative office visits 
in this service. Therefore, we are proposing a work RVU of 5.00 for CPT 
code 62263 for CY 2012.
(E) Intrathecal Epidural Catheters and Pumps

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work RVU          decision          work  RVU
----------------------------------------------------------------------------------------------------------------
62350.............................  Implant spinal canal cath.          6.05  Agree...............          6.05
62355.............................  Remove spinal canal                 4.35  Disagree............          3.55
                                     catheter.
62360.............................  Insert spine infusion               4.33  Agree...............          4.33
                                     device.
62361.............................  Implant spine infusion              5.65  Disagree............          5.00
                                     pump.
62362.............................  Implant spine infusion              6.10  Disagree............          5.60
                                     pump.
62365.............................  Remove spine infusion               4.65  Disagree............          3.93
                                     device.
----------------------------------------------------------------------------------------------------------------

    For CY 2009, CPT code 62355 (Removal of previously implanted 
intrathecal or epidural catheter) was identified as potentially 
misvalued through the site-of-service anomaly screen and was reviewed 
by the AMA RUC. Based on reference services and specialty survey data, 
the AMA RUC recommended a work RVU of 4.30, approximately midway 
between the survey median and 75th percentile. The AMA RUC recommended 
removing the inpatient building blocks to reflect the outpatient site-
of-service, removing all but 1 of the post-procedure office visits to 
reflect the shift in global period from 90 days to 10 days, and 
reducing the physician time associated with this service. In CY 2010, 
while we adopted the AMA RUC-recommended work value on an interim final 
basis and referred the service back to the AMA RUC to be reexamined, 
the work RVU for CPT code 62355 used under the PFS was increased to 
4.35 based on the redistribution of RVUs that resulted from the CMS 
policy to no longer recognize the CPT consultation codes (74 FR 61775). 
Upon re-review for CY 2012, the AMA RUC reaffirmed its previous 
recommendation and ultimately recommended that the current work RVU of 
4.35 for CPT code 62355 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 4.35 for CPT 
code 62355. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. We do not 
believe that the reduction from the CY 2008 work RVU of 6.60 to the CY 
2009 work RVU of 4.30 adequately accounts for the removal of 3 
subsequent hospital care visits and half a discharge management day, 
which together represent a work RVU of 5.40. Also, the time required to 
furnish this service dropped significantly, even after considering the 
global period change. Upon clinical review, we believe that the survey 
median work RVU of 3.55 appropriately accounts for the removal of the 
inpatient visits and decreased

[[Page 42801]]

time for this service. Therefore, we are proposing a work RVU of 3.55 
for CPT code 62355 for CY 2012.
    For CY 2009, CPT code 62361 (Implantation or replacement of device 
for intrathecal or epidural drug infusion; nonprogrammable pump) was 
identified as potentially misvalued through the site-of-service anomaly 
screen and was reviewed by the AMA RUC. Based on reference services and 
specialty survey data, the AMA RUC recommended a work RVU of 5.60, 
approximately midway between the survey median and 75th percentile. The 
AMA RUC recommended removing the inpatient visits to reflect the 
outpatient site-of-service, removing all but 1 of the post-procedure 
office visits to reflect the shift in global period from 90 days to 10 
days, and reducing the physician time associated with this service. In 
CY 2010, while we adopted the AMA RUC-recommended work value on an 
interim final basis and referred the service back to the AMA RUC to be 
reexamined, the work RVU for CPT code 62361 used under the PFS was 
increased to 5.65 based on the redistribution of RVUs that resulted 
from our policy to no longer recognize the CPT consultation codes (74 
FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed its 
previous recommendation and ultimately recommended that the current 
work RVU of 5.65 for CPT code 62361 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 5.65 for CPT 
code 62361. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. We do not 
believe that the reduction from the CY 2008 work RVU of 6.59 to the CY 
2009 work RVU of 5.60 adequately accounts for the removal of 3 
subsequent hospital care visits and half a discharge management day, 
which together represent a work RVU of 5.40. Also, the time required to 
furnish this service dropped significantly, even after considering the 
global period change. Upon clinical review, we believe that the survey 
25th percentile work RVU of 5.00 appropriately accounts for the removal 
of the inpatient visits and decreased time for this service. Therefore, 
we are proposing a work RVU of 5.00 for CPT code 62361 for CY 2012.
    For CY 2009, CPT code 62362 (Implantation or replacement of device 
for intrathecal or epidural drug infusion; programmable pump, including 
preparation of pump, with or without programming) was identified as 
potentially misvalued through the site-of-service anomaly screen and 
was reviewed by the AMA RUC. Based on reference services and specialty 
survey data, the AMA RUC recommended a work RVU of 6.05, approximately 
midway between the survey median and 75th percentile. The AMA RUC 
recommended removing the inpatient visits to reflect the outpatient 
site-of-service, removing all but 1 of the post-procedure office visits 
to reflect the shift in global period from 90 days to 10 days, and 
reducing the physician time associated with this service. In CY 2010, 
while CMS adopted the AMA RUC-recommended work value on an interim 
final basis and referred the service back to the AMA RUC to be 
reexamined, the work RVU for CPT code 62362 used under the PFS was 
increased to 6.10 based on the redistribution of RVUs that resulted 
from our policy to no longer recognize the CPT consultation codes (74 
FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed its 
previous recommendation and ultimately recommended that the current 
work RVU of 6.10 for CPT code 62362 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 6.10 for CPT 
code 62362. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. We do not 
believe that the reduction from the CY 2008 work RVU of 8.58 to the CY 
2009 work RVU of 6.05 adequately accounts for the removal of 3 
subsequent hospital care visits and half a discharge management day, 
which together represent a work RVU of 5.40. Also, the time required to 
furnish this service dropped significantly, even after considering the 
global period change. Upon clinical review, we believe that the survey 
median work RVU of 5.60 appropriately accounts for the removal of the 
inpatient visits and decreased time for this service. Therefore, we are 
proposing a work RVU of 5.60 for CPT code 62362 for CY 2012.
    For CY 2009, CPT code 62365 (Removal of subcutaneous reservoir or 
pump, previously implanted for intrathecal or epidural infusion) was 
identified as potentially misvalued through the site-of-service anomaly 
screen and was reviewed by the AMA RUC. Based on reference services and 
specialty survey data, the AMA RUC recommended a work RVU of 4.60, the 
survey median. The AMA RUC recommended removing the inpatient visits to 
reflect the outpatient site-of-service, removing all but 1 of the post-
procedure office visits to reflect the shift in global period from 90 
days to 10 days, and reducing the physician time associated with this 
service. In CY 2010, while CMS adopted the AMA RUC-recommended work 
value on an interim final basis and referred the service back to the 
AMA RUC to be reexamined, the work RVU for CPT code 62365 used under 
the PFS was increased to 4.65 based on the redistribution of RVUs that 
resulted from our policy to no longer recognize the CPT consultation 
codes (74 FR 61775). Upon re-review for CY 2012, the AMA RUC reaffirmed 
its previous recommendation and ultimately recommended that the current 
work RVU of 4.65 for CPT code 62365 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 4.65 for CPT 
code 62365. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. We do not 
believe that the reduction from the CY 2008 work RVU of 6.57 to the CY 
2009 work RVU of 4.60 adequately accounts for the removal of 3 
subsequent hospital care visits and half a discharge management day, 
which together represent a work RVU of 5.40. Also, the time required to 
furnish this service dropped significantly, even after considering the 
global period change. We believe that this service is similar to that 
of CPT code 33241 (Subcutaneous removal of single or dual chamber 
pacing cardioverter-defibrillator pulse generator) which has a work RVU 
of 3.29 but does not include a half day of discharge management 
service. Upon clinical review, we believe that a work RVU of 3.93, that 
is a work RVU of 3.29 plus a work RVU of 0.64 to account for the half 
day of discharge management service, appropriately accounts for the 
removal of the inpatient visits and decreased time for this service. 
Therefore, we are proposing a work RVU of 3.93 for CPT code 62365 for 
CY 2012.
(F) Neurostimulators

[[Page 42802]]



----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work  RVU         decision          work RVU
----------------------------------------------------------------------------------------------------------------
63650.............................  Implant neuroelectrodes...          7.20  Disagree............          7.15
63685.............................  Insrt/redo spine n                  6.05  Disagree............          5.19
                                     generator.
----------------------------------------------------------------------------------------------------------------

    For CY 2009, CPT code 63650 (Percutaneous implantation of 
neurostimulator electrode array, epidural) or mechanical means (such 
as, catheter) including radiologic localization (includes contrast when 
administered), multiple adhesiolysis sessions; 2 or more days, was 
identified as potentially misvalued through the site-of-service anomaly 
screen and was reviewed by the AMA RUC. Based on reference services and 
specialty survey data, the AMA RUC recommended the survey median work 
RVU of 7.15, and removing the inpatient subsequent hospital care visits 
to reflect the current outpatient place of service. In CY 2010, while 
we adopted the AMA RUC-recommended work value on an interim final basis 
and referred the service back to the AMA RUC to be reexamined, the work 
RVU for CPT code 63650 used under the PFS was increased to 7.20 based 
on the redistribution of RVUs that resulted from the our policy to no 
longer recognize the CPT consultation codes (74 FR 61775). Upon re-
review for CY 2012, the AMA RUC reaffirmed its previous recommendation 
and ultimately recommended that the current work RVU of 7.20 for CPT 
code 63650 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 7.20 for CPT 
code 63650. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. Upon clinical 
review, we believe that the survey median work RVU of 7.15 
appropriately accounts for the removal of the inpatient visits, as well 
as the physician time and post-operative office visit changes. 
Therefore, we are proposing a work RVU of 7.15 for CPT code 63650 for 
CY 2012.
    For CY 2009, CPT code 63685 (Insertion or replacement of spinal 
neurostimulator pulse generator or receiver, direct or inductive 
coupling) was identified as potentially misvalued through the site-of-
service anomaly screen and was reviewed by the AMA RUC. Based on 
reference services and specialty survey data, the AMA RUC recommended 
the survey median work RVU of 6.00, and removing the inpatient 
subsequent hospital care visits to reflect the current outpatient place 
of service. In CY 2010, while we adopted the AMA RUC-recommended work 
value on an interim final basis and referred the service back to the 
AMA RUC to be reexamined, the work RVU for CPT code 63685 used under 
the PFS was increased to 7.05 based on the redistribution of RVUs that 
resulted from the our policy to no longer recognize the CPT 
consultation codes (74 FR 61775). Upon re-review for CY 2012, the AMA 
RUC reaffirmed its previous recommendation and ultimately recommended 
that the current work RVU of 6.05 for CPT code 63685 be maintained.
    We disagree with the AMA RUC-recommended work RVU of 6.05 for CPT 
code 63685. As stated previously, we believe the appropriate 
methodology for valuing site-of-service anomaly codes entails not just 
removing the inpatient visits, but also accounting for the removal of 
the inpatient visits in the work value of the CPT code. Upon clinical 
review, we believe that the survey 25th percentile work RVU of 5.19 
appropriately accounts for the removal of the inpatient visits, as well 
as the physician time and post-operative office visit changes. 
Therefore, we are proposing a work RVU of 5.19 for CPT code 63685 for 
CY 2012.
(G) Repair of Eye Wound

----------------------------------------------------------------------------------------------------------------
                                                                   AMA RUC                               CMS
             CPT Code                    Short descriptor        Recommended     CMS  Work  RVU       Proposed
                                                                  work  RVU         decision          work RVU
----------------------------------------------------------------------------------------------------------------
65285.............................  Repair of eye wound.......         16.00  Disagree............         15.36
----------------------------------------------------------------------------------------------------------------

    Data suggest that CPT code 65285 (Repair of laceration; cornea and/
or sclera, perforating, with reposition or resection of uveal tissue) 
is a ``23-hour stay'' outpatient service. For these 23-hour stay 
services, the typical patient is commonly at the hospital for less than 
24 hours, but often stays overnight at the hospital. As we discussed 
previously and in the Five-Year Review of Work (76 FR 32410), we 
believe that the values of the codes that fall into the 23-hour stay 
category should not reflect work that is typically associated with an 
inpatient service.
    For CY 2009, CPT code 65285 was identified as potentially misvalued 
through the site-of-service anomaly screen and was reviewed by the AMA 
RUC. Based on specialty survey data indicating that this service 
typically requires an overnight stay, the AMA RUC recommended removing 
the CPT code from the site-of-service anomaly list and maintaining the 
current (CY 2008) work RVU of 14.43, as well as current physician times 
and visits. In CY 2010, while we adopted the AMA RUC-recommended work 
value on an interim final basis and referred the service back to the 
AMA RUC to be reexamined, the work RVU for CPT code 65285 used under 
the PFS was increased to 14.71 based on the redistribution of RVUs that 
resulted from the our policy to no longer recognize the CPT 
consultation codes (74 FR 61775).
    The AMA RUC re-reviewed CPT code 65285 for CY 2012 and recommended 
removing the half day of subsequent hospital care service, but contrary 
to the 23-hour stay policy we finalized in the CY 2011 PFS final rule 
with comment period (75 FR 73226 through 73227), recommended 
maintaining the one full day of discharge management service. The AMA 
RUC also recommended an increase in intra-service time and post-
procedure office visits. Ultimately, the AMA RUC recommended a work RVU 
of 16.00 for CPT code 65285 for CY 2012.

[[Page 42803]]

    We disagree with the AMA RUC recommended value for CPT code 65285. 
As the most recently available Medicare claims data suggest these two 
site-of-service anomaly codes resemble 23-hour stay outpatient 
services, and since the AMA RUC's recommended value continues to 
include one full day of discharge management service, we applied the 
23-hour stay policy described previously. That is, we reduced the one 
day of discharge management service to one-half day, and adjusted 
physician work RVUs and times accordingly. As a result, we are 
proposing an alternative work RVU of 15.36 with refinements to the time 
for CPT code 65285 for CY 2012.
    A complete list of CMS time refinements can be found in Table 9.
BILLING CODE 4120-01-P

[[Page 42804]]

[GRAPHIC] [TIFF OMITTED] TP19JY11.001


[[Page 42805]]


[GRAPHIC] [TIFF OMITTED] TP19JY11.002


[[Page 42806]]


[GRAPHIC] [TIFF OMITTED] TP19JY11.003


[[Page 42807]]


[GRAPHIC] [TIFF OMITTED] TP19JY11.004


[[Page 42808]]


[GRAPHIC] [TIFF OMITTED] TP19JY11.005


[[Page 42809]]


[GRAPHIC] [TIFF OMITTED] TP19JY11.006

BILLING CODE 4120-01-C
b. Payment for Bone Density Tests
    Section 1848(b)(6) of the Act (as amended by section 3111(a) of the 
Affordable Care Act) changed the payment calculation for dual-energy x-
ray absorptiometry (DXA) services described by two specified DXA CPT 
codes for CYs 2010 and 2011. This provision required payment for these 
services at 70 percent of the product of the CY 2006 RVUs for these DXA 
codes, the CY 2006 CF, and the geographic adjustment for the relevant 
payment year.
    Effective January 1, 2007, the CPT codes for DXA services were 
revised. The former DXA CPT codes 76075 (Dual energy X-ray 
absorptiometry (DXA), bone density study, one or more sites;

[[Page 42810]]

axial skeleton (eg, hips, pelvis, spine)); 76076 (Dual energy X-ray 
absorptiometry (DXA), bone density study, one or more sites; 
appendicular skeleton (peripheral) (for example, radius, wrist, heel)); 
and 76077 (Dual energy X-ray absorptiometry (DXA), bone density study, 
one or more sites; vertebral fracture assessment) were deleted and 
replaced with new CPT codes 77080, 77081, and 77082 that have the same 
respective code descriptors as the predecessor codes. Section 1848(b) 
of the Act, as amended, specifies that the revised payment applies to 
two of the predecessor codes (CPT codes 76075 and 76077) and ``any 
succeeding codes,'' which are, in this case, CPT codes 77080 and 77082.
    As mentioned previously, section 1848(b) of the Act revised the 
payment for CPT codes 77080 and 77082 during CY 2010 and CY 2011. We 
provided for payment in CYs 2010 and 2011 under the PFS for CPT codes 
77080 and 77082 at the specified rates (70 percent of the product of 
the CY 2006 RVUs for these DXA codes, the CY 2006 conversion factor 
(CF), and the geographic adjustment for the relevant payment year). 
Because the statute specifies a payment calculation for these services 
for CYs 2010 and 2011 as described previously, for those years we 
implemented the payment provision by imputing RVUs for these services 
that would provide the specified payment amount for these services when 
multiplied by the current year's conversion factor.
    For CY 2012, the payment rate for CPT codes 77080 and 77082 will be 
based upon resource-based, rather than imputed, RVUs, and the current 
year's conversion factor. The CY 2012 work, PE, and malpractice RVUs 
for these codes are shown in Table 10, as well as in Addendum B of this 
proposed rule.

                                                Table 10--CY 2012 RVUS for DXA CPT Codes 77080 and 77082
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Fully                           Fully
                                                             Physician      implemented    Transitional     implemented    Transitional     Malpractice
                  CPT Code                     Modifier      work RVU      non-facility    non-facility    facility  PE    facility  PE         RVU
                                                                              PE RVU          PE RVU            RVU             RVU
--------------------------------------------------------------------------------------------------------------------------------------------------------
77080......................................  ...........            0.20            1.26            1.44              NA              NA            0.02
77080......................................           TC            0.00            1.18            1.36              NA              NA            0.01
77080......................................           26            0.20            0.08            0.08            0.08            0.08            0.01
77082......................................  ...........            0.17            0.63            0.65              NA              NA            0.02
77082......................................           TC            0.00            0.56            0.58              NA              NA            0.01
77082......................................           26            0.17            0.07            0.07            0.07            0.07            0.01
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In addition to temporarily changing the payment rate for the two 
DXA CPT codes, section 3111(b) of the Affordable Care Act also 
authorizes the Secretary to enter into agreement with the Institute of 
Medicine of the National Academies to conduct a study on the 
ramifications of Medicare payment reductions for dual-energy x-ray 
absorptiometry (as described in section 1848(b)(6) of the Act) during 
years 2007, 2008, and 2009 on beneficiary access to bone mass density 
tests. This study has not yet been conducted. In the absence of this 
study, we request that the AMA RUC review CPT codes 77080 and 77082 
during CY 2012.

C. Expanding the Multiple Procedure Payment Reduction (MPPR) Policy

1. Background
    Medicare has a longstanding policy to reduce payment by 50 percent 
for the second and subsequent surgical procedures furnished to the same 
patient by the same physician on the same day, largely based on the 
presence of efficiencies in the practice expense (PE) and pre- and 
post-surgical physician work. Effective January 1, 1995, the MPPR 
policy, with the same percentage reduction, was extended to nuclear 
medicine diagnostic procedures (CPT codes 78306, 78320, 78802, 78803, 
78806, and 78807). In the CY 1995 PFS final rule with comment period 
(59 FR 63410), we indicated that we would consider applying the policy 
to other diagnostic tests in the future.
    Consistent with recommendations of MedPAC in its March 2005 Report 
to the Congress on Medicare Payment Policy, under the CY 2006 PFS, the 
MPPR policy was extended to the technical component (TC) of certain 
diagnostic imaging procedures performed on contiguous areas of the body 
in a single session (70 FR 70261). The reduction recognizes that, for 
the second and subsequent imaging procedures, there are some 
efficiencies in clinical labor, supplies, and equipment time. In 
particular, certain clinical labor activities and supplies are not 
duplicated for subsequent procedures and, because equipment time and 
indirect costs are allocated based on clinical labor time, those would 
also be reduced accordingly.
    The imaging MPPR policy originally applied to computed tomography 
(CT) and computed tomographic angiography (CTA), magnetic resonance 
imaging (MRI) and magnetic resonance angiography (MRA), and ultrasound 
services within 11 families of codes based on imaging modality and body 
region. When we adopted the policy in CY 2007, we stated that we 
believed efficiencies were most likely to occur when imaging procedures 
are performed on contiguous body areas because the patient and 
equipment have already been prepared for the second and subsequent 
procedures, potentially yielding resource savings in areas such as 
clerical time, technical preparation, and supplies (70 FR 45850). The 
MPPR policy originally applied only to procedures furnished in a single 
session involving contiguous body areas within a family of codes, not 
across families. Additionally, while the MPPR policy applies to TC-only 
services and to the TC of global services, it does not apply to 
professional component (PC) services.
    Under the current imaging MPPR policy, full payment is made for the 
TC of the highest paid procedure, and payment is reduced by 50 percent 
of the TC for each additional procedure when an MPPR scenario applies. 
We originally planned to phase in the imaging MPPR policy over a 2-year 
period, with a 25 percent reduction in CY 2006 and a 50 percent 
reduction in CY 2007 (70 FR 70263). However, the Deficit Reduction Act 
of 2005 (DRA) (Pub. L. 109-171) amended the statute to place a cap on 
the PFS payment amount for most imaging procedures at the amount paid 
under the hospital outpatient prospective payment system (OPPS). In 
view of the new OPPS payment cap added by the DRA, we decided in the 
PFS final rule with comment period for 2006 that it would be prudent to 
retain the imaging MPPR at 25 percent while we continued to examine the 
appropriate payment levels (71 FR 69659). The DRA also exempted reduced 
expenditures attributable to the imaging MPPR policy from the PFS

[[Page 42811]]

budget neutrality provision. Effective July 1, 2010, section 3135(b) of 
the Affordable Care Act amended the statute to increase the MPPR on the 
TC of imaging services under the policy established in the CY 2006 PFS 
final rule with comment period from 25 to 50 percent, and exempted the 
reduced expenditures attributable to this further change from the PFS 
budget neutrality provision.
    In the July 2009 GAO report entitled, ``Medicare Physician 
Payments: Fees Could Better Reflect Efficiencies Achieved when Services 
are Provided Together,'' the GAO recommended that we take further steps 
to ensure that fees for services paid under the PFS reflect 
efficiencies that occur when services are furnished by the same 
physician to the same beneficiary on the same day. The GAO recommended 
the following: (1) Expanding the existing imaging MPPR policy for 
certain services to the PC to reflect efficiencies in physician work 
for certain imaging services; and (2) expanding the MPPR to reflect PE 
efficiencies that occur when certain nonsurgical, nonimaging services 
are furnished together. The GAO report also encouraged us to focus on 
service pairs that have the most impact on Medicare spending.
    In its March 2010 report, MedPAC noted its concerns about 
mispricing of services under the PFS. MedPAC indicated that it would 
explore whether expanding the unit of payment through packaging or 
bundling would improve payment accuracy and encourage more efficient 
use of services.
    In the CYs 2009 and 2010 PFS proposed rules (73 FR 38586 and 74 FR 
33554, respectively), we stated that we planned to analyze nonsurgical 
services commonly furnished together (for example, 60 to 75 percent of 
the time) to assess whether an expansion of the MPPR policy could be 
warranted. MedPAC encouraged us to consider duplicative physician work, 
as well as PE, in any expansion of the MPPR policy.
    Section 1848(c)(2)(K) of the Act (as added by section 3134(a) of 
the Affordable Care Act) specifies that the Secretary shall identify 
potentially misvalued codes by examining multiple codes that are 
frequently billed in conjunction with furnishing a single service, and 
review and make appropriate adjustments to their relative values. As a 
first step in applying this provision, in the CY 2010 final rule with 
comment period, we implemented a limited expansion of the imaging MPPR 
policy to additional combinations of imaging services.
    Effective January 1, 2011 the imaging MPPR applies regardless of 
code family; that is, the policy applies to multiple imaging services 
furnished within the same family of codes or across families. This 
policy is consistent with the standard PFS MPPR policy for surgical 
procedures that does not group procedures by body region. The current 
imaging MPPR policy applies to CT and CTA, MRI and MRA, and ultrasound 
procedures services furnished to the same patient in the same session, 
regardless of the imaging modality, and is not limited to contiguous 
body areas.
    We note that section 1848(c)(2)(B)(v)(VI) of the Act (as added by 
section 3135(b) of the Affordable Care Act) specifies that reduced 
expenditures attributable to the increase in the imaging MPPR from 25 
to 50 percent (effective for fee schedules established beginning with 
2010 and for services furnished on or after July 1, 2010) are excluded 
from the PFS budget neutrality adjustment. That is, the reduced 
payments for code combinations within a family of codes (contiguous 
body areas) are excluded from budget neutrality. However, this 
exclusion only applies to reduced expenditures attributable to the 
increase in the MPPR percentage from 25 to 50 percent, and not to 
reduced expenditures attributable to our policy change regarding 
additional code combinations across code families (non-continguous body 
areas) that are subject to budget neutrality under the PFS.
    The complete list of codes subject to the CY 2011 MPPR policy for 
diagnostic imaging services is included in Addendum F.
    As a further step in applying the provisions of section 3134(a) of 
the Affordable Care Act, effective January 1, 2011, we implemented an 
MPPR for therapy services. The MPPR applies to separately payable 
``always therapy'' services, that is, services that are only paid by 
Medicare when furnished under a therapy plan of care. Contractor-priced 
codes, bundled codes, and add-on codes are excluded because an MPPR 
would not be applicable for ``always therapy'' services furnished in 
combination with these codes. The complete list of codes subject to the 
MPPR policy for therapy services is included in Addendum H.
    In the CY 2011 proposed rule (75 FR 44075), we proposed to apply a 
50 percent payment reduction to the PE component of the second and 
subsequent therapy services for multiple ``always therapy'' services 
furnished to a single patient in a single day. However, in response to 
public comments, in the CY 2011 PFS final rule with comment period (75 
FR 73232), we adopted a 25 percent payment reduction to the PE 
component of the second and subsequent therapy services for multiple 
``always therapy'' services furnished to a single patient in a single 
day.
    Subsequent to publication of the CY 2011 PFS final rule with 
comment period, section 3 of the Physician Payment and Therapy Relief 
Act of 2010 (Pub. L. 111-286) revised the payment reduction percentage 
from 25 percent to 20 percent for therapy services furnished in office 
settings. The payment reduction percentage remains at 25 percent for 
services furnished in institutional settings. Section 4 of the 
Physician Payment and Therapy Relief Act of 2010 exempted the reduced 
expenditures attributable to the therapy MPPR policy from the PFS 
budget neutrality provision. Under our current policy as amended by the 
Physician Payment and Therapy Relief Act, for institutional services, 
full payment is made for the service or unit with the highest PE and 
payment for the PE component for the second and subsequent procedures 
or additional units of the same service is reduced by 25 percent. For 
non-institutional services, full payment is made for the service or 
unit with the highest PE and payment for the PE component for the 
second and subsequent procedures or additional units of the same 
service is reduced by 20 percent.
    The MPPR policy applies to multiple units of the same therapy 
service, as well as to multiple different services, when furnished to 
the same patient on the same day. It applies to services furnished by 
an individual or group practice or ``incident to'' a physician's 
service. The MPPR applies when multiple therapy services are billed on 
the same date of service for one patient by the same practitioner or 
facility under the same National Provider Identifier (NPI), regardless 
of whether the services are furnished in one therapy discipline or 
multiple disciplines, including, physical therapy, occupational 
therapy, or speech-language pathology.
    The MPPR policy applies in all settings where outpatient therapy 
services are paid under Part B. This includes both services paid under 
the PFS that are furnished in the office setting, as well as to 
institutional services paid at the PFS rates that are furnished by 
outpatient hospitals, home health agencies, comprehensive outpatient 
rehabilitation facilities (CORFs), and other entities that are paid 
under Medicare Part B for outpatient therapy services.

[[Page 42812]]

2. CY 2012 Proposed Expansion of the MPPR Policy to the Professional 
Component of Advanced Imaging Services
    Over the past 3 years, as part of the potentially misvalued service 
initiative, the AMA RUC has examined several services that are billed 
together at least 90 percent of the time as part of the potentially 
misvalued service initiative. In several cases, the AMA RUC recommended 
work values for new codes that describe the combined services, and 
those recommended values reflected the expected efficiencies. For 
example, for CY 2011, the AMA RUC valued the work for a series of new 
codes that describe CT of the abdomen and pelvis, specifically CPT 
codes:
     74176 (Computed tomography, abdomen and pelvis; without 
contrast material).
     74177 (Computed tomography, abdomen and pelvis; with 
contrast material).
     74178 (Computed tomography, abdomen and pelvis; without 
contrast material in one or both body regions, followed by with 
contrast material(s) and further sections in one or both body regions).
    We accepted the AMA RUC-recommended work values for these codes in 
the CY 2011 PFS final rule with comment period (75 FR 73229). The AMA 
RUC-recommended work values reflected an expected efficiency for the 
typical combined service that paralleled the reductions that would 
typically result from a MPPR adjustment. For example, in support of the 
recommended work value of 1.74 RVUs for 74176, the AMA RUC explained 
that the full value of 74150 (Computed tomography, abdomen; without 
contrast material) (Work RVU = 1.19) plus half the value of 72192 
(Computed tomography, pelvis; without contrast material) (\1/2\ Work 
RVU = 0.55) equals 1.74 work RVUs. The AMA RUC stated that its 
recommended valuation was appropriate even though the combined current 
work RVUs for 74150 and 72192 would result in a total work RVU of 2.28. 
Furthermore, the AMA RUC validated its estimation of work efficiency 
for the combined service by comparing the code favorably with the work 
value associated with 74182 (Magnetic resonance, for example, proton 
imaging, abdomen; with contrast material(s)) (Work RVU = 1.73), which 
has a similar intra-service time, 20 minutes. Thus, we believe our 
current and proposed MPPR formulations are consistent with the AMA 
RUC's work to review code pairs for unaccounted-for efficiencies and to 
appropriately value comprehensive codes for a bundle of component 
services.
    We continue to believe that there may be additional imaging and 
other diagnostic services for which there are efficiencies in work when 
furnished together, resulting in potentially excessive payment for 
these services under current policy.
    As noted, Medicare has a longstanding policy to reduce payment by 
50 percent for the second and subsequent surgical procedures and 
nuclear medicine diagnostic procedures furnished to the same patient by 
the same physician on the same day. In continuing to apply the 
provisions of section 3134(a) of the Affordable Care Act, for CY 2012 
we are proposing to expand the MPPR to the PC of Advanced Imaging 
Services (CT, MRI, and Ultrasound), that is, the same list of codes to 
which the MPPR on the TC of advanced imaging already applies (see 
Addendum F). Thus, the MPPR would apply to the PC and the TC of the 
codes. Specifically, we propose to expand the 50 percent payment 
reduction currently applied to the TC to apply also to the PC of the 
second and subsequent advanced imaging services furnished in the same 
session. Full payment would be made for the PC and TC of the highest 
paid procedure, and payment would be reduced by 50 percent for the PC 
and TC for each additional procedure furnished to the same patient in 
the same session. This proposal is based on the expected efficiencies 
in furnishing multiple services in the same session due to duplication 
of physician work--primarily in the pre- and post-service periods, with 
smaller efficiencies in the intraservice period.
    This proposal is consistent with the statutory requirement for the 
Secretary to identify, review, and adjust the relative values of 
potentially misvalued services under the PFS as specified by section 
3134(a) of the Affordable Care Act. The proposal is also consistent 
both with our longstanding policy on surgical and nuclear medicine 
diagnostic procedures, which apply a 50 percent reduction to second and 
subsequent procedures. Furthermore, it is responsive to continued 
concerns about significant growth in imaging spending, and to MedPAC 
(March 2010) and GAO (July 2009) recommendations regarding the 
expansion of MPPR policies under the PFS to account for additional 
efficiencies.
    Finally, as noted, the proposal is consistent with the RUC's recent 
methodology and rationale in valuing the work for a combined CT of the 
pelvis (CPT codes 72192, 72193 and 72194), and abdomen (CPT codes 
74150, 74160 and 74170) where the RUC assumed the work efficiency for 
the second service was 50 percent. Savings resulting from this proposal 
would be redistributed to other PFS services as required by the general 
statutory PFS budget neutrality provision.
3. Further Expansion of the MPPR Under Consideration for Future Years
    Currently, the MPPR focuses only on a select number of codes. We 
will be aggressively looking for efficiencies in other sets of codes 
during the following years and will consider implementing more 
expansive reduction policies in CY 2013 and beyond. We invite public 
comment on the following MPPR policies which are under consideration. 
Any proposals would be presented in future rulemaking and subject to 
further public comment:
     Apply the MPPR to the TC of All Imaging Services. This 
approach would apply a payment reduction to the TC of the second and 
subsequent imaging services performed in the same session. Such an 
approach could define imaging consistent with our existing definition 
of imaging for purposes of the statutory cap on payment at the OPPS 
rate (including x-ray, ultrasound (including echocardiography), nuclear 
medicine (including positron emission tomography), magnetic resonance 
imaging, computed tomography, and fluoroscopy, but excluding diagnostic 
and screening mammography). Add-on codes that are always furnished with 
another service and have been valued accordingly could be excluded.
    Such an approach would be based on the expected efficiencies due to 
duplication of clinical labor activities, supplies, and equipment time. 
This approach would apply to approximately 530 HCPCS codes, including 
the 119 codes to which the current imaging MPPR applies. Savings would 
be redistributed to other PFS services as required by the statutory PFS 
budget neutrality provision.
     Apply the MPPR to the PC of All Imaging Services. This 
approach would apply a payment reduction to the PC of the second or 
subsequent imaging services furnished in the same encounter. Such an 
approach could define imaging consistent with our existing definition 
of imaging for the cap on payment at the OPPS rate. Add-on codes that 
are always furnished with another service and have been valued 
accordingly could be excluded.
    This approach would be based on efficiencies due to duplication of 
physician work primarily in the pre- and post-service periods, with 
smaller

[[Page 42813]]

efficiencies in the intraservice period. This approach would apply to 
approximately 530 HCPCS codes, including the 119 codes to which the 
current imaging MPPR applies. Savings would be redistributed to other 
PFS services as required by the statutory PFS budget neutrality 
provision.
     Apply the MPPR to the TC of All Diagnostic Tests. This 
approach would apply a payment reduction to the TC of the second and 
subsequent diagnostic tests (such as radiology, cardiology, audiology, 
etc.) furnished in the same encounter. Add-on codes that are always 
furnished with another service and have been valued accordingly could 
be excluded.
    The approach would be based on the expected efficiencies due to 
duplication of clinical labor activities, supplies, and equipment time. 
The approach would apply to approximately 700 HCPCS codes, including 
the approximately 560 HCPCS codes subject to the OPPS cap. The savings 
would be redistributed to other PFS services as required by the 
statutory PFS budget neutrality provision.

D. Malpractice RVUs

1. Overview of the Methodology for Calculation of Malpractice RVUs
    Section 1848(c) of the Act requires that each service paid under 
the PFS be comprised of three components: work, PE, and malpractice. 
From 1992 to 1999, malpractice RVUs were charge-based, using weighted 
specialty-specific malpractice expense percentages and 1991 average 
allowed charges. Malpractice RVUs for new codes after 1991 were 
extrapolated from similar existing codes or as a percentage of the 
corresponding work RVU. Section 4505(f) of the BBA amended section 
1848(c) of the Act which required us to implement resource-based 
malpractice RVUs for services furnished beginning in 2000. Therefore, 
initial implementation of resource-based malpractice RVUs occurred in 
2000.
    The statute also requires that we review, and if necessary adjust, 
RVUs no less often than every 5 years. The first review and update of 
resource-based malpractice RVUs was addressed in the CY 2005 PFS final 
rule with comment period (69 FR 66263). Minor modifications to the 
methodology were addressed in the CY 2006 PFS final rule with comment 
period (70 FR 70153). In the CY 2010 PFS final rule with comment 
period, we implemented the second review and update of malpractice 
RVUs. For a discussion of the second review and update of malpractice 
RVUs, see the CY 2010 PFS proposed rule (74 FR 33537) and final rule 
with comment period (74 FR 61758).
    As explained in the CY 2011 PFS final rule with comment period, 
malpractice RVUs for new and revised codes effective before the next 
Five-Year Review (for example, effective CY 2011 through CY 2014, 
assuming that the next review of malpractice RVUs occurs for CY 2015) 
are determined either by a direct crosswalk to a similar source code or 
by a modified crosswalk to account for differences in work RVUs between 
the new/revised code and the source code (75 FR 73208). For the 
modified crosswalk approach, we adjust (or ``scale'') the malpractice 
RVU for the new/revised code to reflect the difference in work RVU 
between the source code and the new/revised work value (or, if greater, 
the clinical labor portion of the fully implemented PE RVU) for the new 
code. For example, if the proposed work RVU for a revised code is 10 
percent higher than the work RVU for its source code, the malpractice 
RVU for the revised code would be increased by 10 percent over the 
source code RVU. This approach presumes the same risk factor for the 
new/revised code and source code but uses the work RVU for the new/
revised code to adjust for risk-of-service. For codes reviewed in this 
proposed rule the source code for each code is the code itself. 
Therefore, we calculated the revised malpractice RVU for these codes by 
scaling the current malpractice RVU by the percent difference in work 
RVU between the current (CY 2011) work RVU and the work RVU proposed in 
section II.B. of this proposed rule. Typically, the assigned 
malpractice RVUs for new/revised codes effective between updates remain 
in place until the next Five-Year Review of Malpractice, which is 
expected to occur for CY 2015. We anticipate soliciting public comments 
in the CY 2013 PFS proposed rule on matters relating to the CY 2015 
Five-Year Review of Malpractice.
2. Proposed Revisions to Malpractice RVUs for Certain Cardiothoracic 
Surgery Services
    In addition to the scaling of malpractice RVUs to account for the 
proportionate difference between current and proposed work RVUs 
(proposed work RVU changes are discussed previously in section II.B.of 
this proposed rule) there are 19 cardiothoracic surgery codes for which 
we propose to scale the malpractice RVUs to account for the 
proportionate difference between the current and proposed revised 
specialty risk factor. These codes and their short descriptors are 
listed below in Table 11. As discussed in the CY 2010 PFS proposed rule 
(74 FR 33539), we assign malpractice RVUs to each service based upon a 
weighted average of the malpractice risk factors of all specialties 
that furnish the service. For the CY 2010 review of malpractice RVUs, 
we used CY 2008 Medicare claims data on allowed services to establish 
the frequency of a service by specialty. For a number of cardiothoracic 
surgery CPT codes representing major open heart procedures performed 
primarily on neonates and infants, CY 2008 Medicare claims data showed 
zero allowed services. Therefore, our contractor set the number of 
services to 1, and assigned a risk factor according to the average risk 
factor for all services that do not explicitly have a separate 
technical or professional component (average risk factor = 1.95). In 
the CY 2010 PFS final rule with comment period, we published interim 
final malpractice RVUs for these codes calculated using the average 
physician risk factor, and finalized them in the CY 2011 PFS final rule 
with comment period.
    However, since publication of the CY 2010 PFS final rule with 
comment period, stakeholders have expressed concern that the average 
risk factor is not appropriate for these services, and that a cardiac 
surgery risk factor would be more appropriate (cardiac surgery risk 
factor = 6.93). While these CPT codes continue to have little to no 
Medicare claims data, upon clinical review we agree that these CPT 
codes represent cardiac surgery services and that the malpractice RVUs 
should be calculated using the cardiac surgery risk factor. 
Accordingly, we propose to scale the malpractice RVUs for these CPT 
codes to reflect the proportionate difference between the average risk 
factor and the cardiac surgery risk factor. To scale the malpractice 
RVU we used the following formula: (cardiac surgery risk factor/average 
risk factor) * CY 2011 malpractice RVU = Proposed CY 2012 malpractice 
RVU. For example, CPT code 33471 (Valvotomy, pulmonary valve, closed 
heart; via pulmonary artery) has a CY 2011 malpractice RVU of 1.62 
which was calculated using the average risk factor of 1.95. To scale 
this malpractice RVU to reflect the cardiac surgery risk factor of 6.93 
we used the following calculation: (6.93 RF/1.95 RF)*1.62 MP RVU = 5.76 
MP RVU.
    CPT code 33692 (Complete repair tetralogy of Fallot without 
pulmonary atresia;) has a CY 2011 work RVU of 31.54 and a malpractice 
RVU of 2.23. However, in the Fourth Five-Year Review of Work (76 FR 
32410) we have

[[Page 42814]]

proposed an interim final work RVU of 36.15 and adjusted the 
malpractice RVU to 2.56 for this service. Therefore, the starting value 
for calculating the proposed revised malpractice RVU based on the 
cardiac surgery risk factor is the Five-Year Review malpractice RVU 
instead of the CY 2011 malpractice RVU. Similar to the example shown 
previously, the formula for this adjustment is as follows: (cardiac 
surgery risk factor/average risk factor) * Five-Year Review malpractice 
RVU = Proposed CY 2012 malpractice RVU.
    Table 11 shows the proposed CY 2012 malpractice RVUs for these 
cardiothoracic surgery codes.
    We also propose to scale the malpractice RVU to reflect a change in 
risk factor for CPT code 32442 (Removal of lung, total pneumonectomy; 
with resection of segment of trachea followed by broncho-tracheal 
anastomosis (sleeve pneumonectomy)). In the CY 2010 review of 
malpractice RVUs we assigned CPT code 32442 the pulmonary disease risk 
factor (2.09) and published the interim final malpractice RVU 
calculated from this risk factor in the CY 2010 PFS final rule with 
comment period. This value was finalized in the CY 2011 PFS final rule 
with comment period.
    Since finalizing this value, stakeholders have suggested that a 
blended risk factor of thoracic surgery (6.49) and general surgery 
(5.91) would be more appropriate for this service. As described in the 
CY 2010 PFS final rule with comment period (74 FR 61760), we do not use 
a blended risk factor for services with Medicare utilization under 100; 
instead, we use the malpractice risk factor of the specialty that 
performs the given service the most (the dominant specialty). As CPT 
code 32442 has Medicare utilization well below the 100 occurrences 
threshold, and current Medicare claims data show that the dominant 
specialty for CPT code 32442 is thoracic surgery, we believe that the 
thoracic surgery risk factor is the appropriate risk factor for this 
service at this time. Applying the formula described previously to 
adjust the malpractice RVU to reflect the thoracic surgery risk factor 
rather than the pulmonary disease risk factor results in a malpractice 
RVU of 13.21 for CPT code 32442. Therefore, we propose a malpractice 
RVU of 13.21 for CPT code 32442 for CY 2012. Table 11 shows the 
proposed CY 2012 malpractice RVUs for the cardiothoracic surgery codes 
described in this section. All malpractice RVUs are listed in Addendum 
B of this proposed rule, including those that are proposed to be 
revised and those for which there is no proposed change for CY 2012.

          Table 11--CY 2012 Proposed Malpractice (MP) RVUs for Selected Cardiothoracic Surgery Services
----------------------------------------------------------------------------------------------------------------
                                                       CY 2012  proposed  specialty    CY 2011 MP    Proposed CY
      CPT Code               Short descriptor                   risk factor                RVU       2012 MP RVU
----------------------------------------------------------------------------------------------------------------
33471                Valvotomy pulmonary valve......  Cardiac Surgery: 6.93.........          1.62          5.76
33472                Revision of pulmonary valve....  Cardiac Surgery: 6.93.........          1.63          5.80
33676                Close mult vsd w/resection.....  Cardiac Surgery: 6.93.........          2.63          9.36
33677                Cl mult vsd w/rem pul band.....  Cardiac Surgery: 6.93.........          2.74          9.75
33692                Repair of heart defects........  Cardiac Surgery: 6.93.........        * 2.56          9.11
33762                Major vessel shunt.............  Cardiac Surgery: 6.93.........          1.61          5.73
33768                Cavopulmonary shunting.........  Cardiac Surgery: 6.93.........          0.56          1.99
33771                Repair great vessels defect....  Cardiac Surgery: 6.93.........          2.90         10.32
33775                Repair great vessels defect....  Cardiac Surgery: 6.93.........          2.33          8.29
33776                Repair great vessels defect....  Cardiac Surgery: 6.93.........          2.45          8.72
33777                Repair great vessels defect....  Cardiac Surgery: 6.93.........          2.42          8.61
33778                Repair great vessels defect....  Cardiac Surgery: 6.93.........          3.05         10.85
33779                Repair great vessels defect....  Cardiac Surgery: 6.93.........          3.09         10.99
33780                Repair great vessels defect....  Cardiac Surgery: 6.93.........          3.13         11.14
33781                Repair great vessels defect....  Cardiac Surgery: 6.93.........          3.09         10.99
33786                Repair arterial trunk..........  Cardiac Surgery: 6.93.........          2.98         10.60
33788                Revision of pulmonary artery...  Cardiac Surgery: 6.93.........          1.93          6.87
33822                Revise major vessel............  Cardiac Surgery: 6.93.........          1.25          4.45
32442                Sleeve pneumonectomy...........  Thoracic Surgery: 6.49........          4.25         13.21
----------------------------------------------------------------------------------------------------------------
* The malpractice RVU listed for CPT code 33692 is the Five-Year Review of Work-adjusted malpractice RVU, not
  the CY 2011 malpractice RVU. Please see above for additional detail.

E. Geographic Practice Cost Indices (GPCIs)

1. Background
    Section 1848(e)(1)(A) of the Act requires us to develop separate 
Geographic Practice Cost Indices (GPCIs) to measure resource cost 
differences among localities compared to the national average for each 
of the three fee schedule components (that is, physician work, practice 
expense (PE), and malpractice). While requiring that the PE and 
malpractice GPCIs reflect the full relative cost differences, section 
1848(e)(1)(A)(iii) of the Act requires that the physician work GPCIs 
reflect only one-quarter of the relative cost differences compared to 
the national average. In addition, section 1848(e)(1)(G) of the Act 
sets a permanent 1.5 work GPCI floor for services furnished in Alaska 
beginning January 1, 2009, and section 1848(e)(1)(I) of the Act sets a 
permanent 1.0 PE GPCI floor for services furnished in frontier States 
beginning January 1, 2011.
    Section 1848(e)(1)(E) of the Act provides for a 1.0 floor for the 
work GPCIs which was set to expire at the end of 2009 until it was 
extended through December 31, 2010 by section 3102(a) of the Affordable 
Care Act. Because the work GPCI floor was set to expire at the end of 
2010, the GPCIs published in Addendum E of the CY 2011 PFS final rule 
with comment period did not reflect the 1.0 physician work floor. 
However, section 1848(e)(1)(E) of the Act was amended on December 15, 
2010, by section 103 of the Medicare and Medicaid Extenders Act (MMEA) 
of 2010 (Pub. L. 111-309) to extend the 1.0 work GPCI floor through 
December 31, 2011. Appropriate changes to the CY 2011 GPCIs were made 
to reflect the 1.0

[[Page 42815]]

physician work floor required by section 103 of the MMEA. Since the 
work GPCI floor provided in section 1848(e)(1)(E) of the Act is set to 
expire prior to the implementation of the CY 2012 PFS, the CY 2012 
physician work GPCIs, and summarized geographic adjustment factors 
(GAFs), presented in this proposed rule do not reflect the 1.0 work 
GPCI floor. As required by sections 1848(e)(1)(G) and (I) of the Act, 
the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for 
frontier States will be applicable in CY 2012. Moreover, the limited 
recognition of cost differences in employee compensation and office 
rent for the PE GPCIs, and the related hold harmless provision, 
required under section 1848(e)(1)(H) of the Act was only applicable for 
CY 2010 and CY 2011 (75 FR 73253) and, therefore, is no longer 
effective beginning in CY 2012.
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs not less often than every 3 years. This 
section also specifies that if more than 1 year has elapsed since the 
last GPCI revision, we must phase in the adjustment over 2 years, 
applying only one-half of any adjustment in the first year.
    As noted in the CY 2011 PFS final rule with comment period (75 FR 
73252 through 73262), for the sixth GPCI update, we updated the data 
used to compute all three GPCI components. Specifically, we utilized 
the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational 
Employment Statistics (OES) to calculate the physician work GPCIs (75 
FR 73252). In addition, we used the 2006 through 2008 BLS OES data to 
calculate the employee compensation sub-component of practice expense 
(75 FR 73255). Consistent with previous updates, we used the 2-bedroom 
residential apartment rent data from HUD (2010) at the 50th percentile 
as a proxy for the relative cost differences in physician office rents 
(75 FR 73256). Lastly, we calculated the malpractice GPCIs using 
malpractice premium data from 2006 through 2007 (75 FR 73256).
    Since more than 1 year had elapsed since the fifth GPCI update, the 
sixth GPCI update changes are being phased in over a 2-year period as 
required by law. The current CY 2011 GPCIs reflect the first year of 
the transition. The proposed CY 2012 GPCIs reflect the full 
implementation.
    The Affordable Care Act requires that we analyze the current 
methodology and data sources used to calculate the PE GPCI component. 
Specifically, section 1848(e)(1)(H)(iv) of the Act (as added by section 
3102(b) of the Affordable Care Act) requires the Secretary to ``analyze 
current methods of establishing practice expense adjustments under 
subparagraph (A)(i) and evaluate data that fairly and reliably 
establishes distinctions in the cost of operating a medical practice in 
different fee schedule areas.'' Section 1848(e)(1)(H)(iv) of the Act 
also requires that such analysis shall include an evaluation of the 
following:
     The feasibility of using actual data or reliable survey 
data developed by medical organizations on the costs of operating a 
medical practice, including office rents and non-physician staff wages, 
in different fee schedule areas.
     The office expense portion of the practice expense 
geographic adjustment; including the extent to which types of office 
expenses are determined in local markets instead of national markets.
     The weights assigned to each area of the categories within 
the practice expense geographic adjustment.
    In addition, the weights for different categories of practice 
expense in the GPCIs have historically matched the weights developed by 
the CMS Office of the Actuary (OACT) for use in the Medicare Economic 
Index (MEI), the measure of inflation used as part of the basis for the 
annual update to the physician fee schedule payment rates. In response 
to comments received on the CY 2011 Physician Fee Schedule proposed 
rule, however, we delayed moving to the new MEI weights developed by 
OACT for CY 2011 pending further analysis.
    Lastly, we asked the Institute of Medicine (IOM) to evaluate the 
accuracy of the geographic adjustment factors used for Medicare 
physician payment. IOM will prepare three reports for the Congress and 
the Secretary of the Department of Health and Human Services. The first 
report (Phase I) was released on June 1, 2011, and includes an 
evaluation of the accuracy of geographic adjustment factors for the 
hospital wage index and the GPCIs, and the methodology and data used to 
calculate them. In addition, IOM is expected to release a supplemental 
GPCI report in the summer of 2011. The third report, expected in spring 
2012, will evaluate the effects of the adjustment factors on the 
distribution of the health care workforce, quality of care, population 
health, and the ability to provide efficient, high value care. Given 
the timing of the release of IOM's first report and the fact that we do 
not yet have the second supplemental report on the GPCIs, we are unable 
to address the full scope of the IOM recommendations in this proposed 
rule. The report can be accessed on the IOM's Web site at http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx. Additionally, we have included a 
summary of GPCI-specific recommendations in section 4 below.
2. Proposed GPCI Revisions for CY 2012
    The revised GPCI values we are proposing were developed by Acumen, 
LLC (Acumen) under contract to us. As mentioned previously, there are 
three GPCI components (physician work, PE, and malpractice), and all 
GPCIs are developed through comparison to a national average for each 
component. Additionally, each of the three GPCIs relies on its own data 
source(s) and methodology for calculating its value, as described more 
fully later in this section. As discussed in more detail later in this 
section, we are proposing to revise the PE GPCIs for CY 2012, as well 
as the cost share weights which correspond to all three GPCIs.
a. Physician Work GPCIs
    The physician work GPCIs are designed to capture the relative cost 
of physician labor by Medicare PFS locality. Previously, the physician 
work GPCIs were developed using the median hourly earnings from the 
2000 Census of workers in seven professional specialty occupation 
categories which we used as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories because Medicare 
payments are a key determinant of physicians' earnings. Including 
physicians' wages in the physician work GPCIs would, in effect, have 
made the indices dependent upon Medicare payments. As required by law, 
the physician work GPCI reflects one-quarter of the relative wage 
differences for each locality compared to the national average.
    The physician work GPCI updates in CYs 2001, 2003, 2005, and 2008 
were based on professional earnings data from the 2000 Census. For the 
sixth GPCI update in CY 2011, we used the 2006 through 2008 Bureau of 
Labor Statistics (BLS) Occupational Employment Statistics (OES) data as 
a replacement for the 2000 Census data. We are not proposing to revise 
the physician work GPCI data source for CY 2012. However, we note that 
the work GPCIs will be revised to account for the expiration of the 
statutory work floor. The 1.5 work floor for Alaska is permanent and 
will be applicable in CY 2012. In addition, we are proposing to revise 
the physician work cost share weight from 52.466 to 48.266 in line with 
the 2011 MEI weights, which are

[[Page 42816]]

based on 2006 data (referred to hereinafter as the 2006-based MEI).
b. Practice Expense GPCIs
(1) Affordable Care Act Analysis and Revisions for PE GPCIs
(A) General Analysis for the CY 2012 PE GPCIs
    As previously mentioned, section 1848(e)(1)(H)(iv) of the Act (as 
added by section 3102(b) of the Affordable Care Act) requires the 
Secretary to ``analyze current methods of practice expense adjustments 
under subparagraph (A)(i) and evaluate data that fairly and reliably 
establishes distinctions in the cost of operating a medical practice in 
different fee schedule areas.''
    Moreover, section 1848(e)(1)(H)(v) of the Act requires the 
Secretary to make appropriate adjustments to the PE GPCIs as a result 
of the required analysis no later than by January 1, 2012. We are 
proposing to make four revisions to the PE data sources and cost share 
weights discussed herein effective January 1, 2012. Specifically, we 
are proposing to: (1) Revise the occupations used to calculate the 
employee wage component of PE using BLS wage data specific to the 
office of physicians' industry; (2) utilize two bedroom rental data 
from the 2006-2008 American Community Survey as the proxy for physician 
office rent; (3) create a purchased service index that accounts for 
regional variation in labor input costs for contracted services from 
industries comprising the ``all other services'' category within the 
MEI office expense and the stand alone ``other professional expenses'' 
category of the MEI and; (4) use the 2006-based MEI (most recent MEI 
weights finalized in the CY 2011 final rule with comment period) to 
determine the GPCI cost share weights. These proposals are based on 
analyses we conducted to address commenter concerns in the CY 2011 
final rule with comment period. The main comments were related to: (1) 
The occupational groups used to calculate the employee wage component 
of PE, and (2) concerns by commenters stating that regional variation 
in purchased services such as legal and accounting are not sufficiently 
included in the employee wage index.
    We began analyzing the current methods and data sources used in the 
establishment of the PE GPCIs during the CY 2011 rulemaking process (75 
FR 40084). With respect to our CY 2011 analysis, we began with a review 
of the Government Accountability Office's (GAO) March 2005 Report 
entitled, ``Medicare Physician Fees: Geographic Adjustment Indices Are 
Valid in Design, but Data and Methods Need Refinement'' (GAO-05-119). 
While we have raised concerns in the past about some of the GAO's GPCI 
recommendations, we noted that with respect to the PE GPCIs, the GAO 
did not indicate any significant issues with the methods underlying the 
PE GPCIs. Rather, the report focused on some of the data sources used 
in the method. For example, the GAO stated that the wage data used for 
the PE GPCIs are not current. Similarly, commenters on previous PE GPCI 
updates predominantly focused on either the data sources used in the 
method or raised issues such as incentivizing the provision of care in 
different geographic areas. However, the latter issue (incentivizing 
the provision of care) is outside the scope of the statutory 
requirement that the PE GPCIs reflect the relative costs of the mix of 
goods and services comprising practice expenses in the different fee 
schedule areas relative to the national average.
    To further analyze the PE office expense in accordance with section 
1848(e)(1)(H)(iv) of the Act, we examined the following issues: the 
appropriateness of expanding the number of occupations included in the 
employee wage index; the appropriateness of replacing rental data from 
the Department of Housing and Urban Development (HUD) with data from 
the 2006-2008 American Community Survey (ACS) two bedroom rental data 
as a proxy for the office rent subcomponent of PE; and the 
appropriateness of adjusting the ``all other services'' and ``other 
professional expenses'' MEI categories for geographic variation in 
labor-related costs. We also examined available ACS occupational group 
data for potential use in determining geographic variation in the 
employee wage component of PE.
    An additional component of the analysis under section 
1848(e)(1)(H)(iv) of the Act is to evaluate the weights assigned to 
each of the categories within the practice expense geographic 
adjustment. As discussed in the CY 2011 final rule with comment period 
(75 FR 73256), in response to concerns raised by commenters and to 
allow us time to conduct additional analysis, we did not revise the 
GPCI cost share weights to reflect the weights used in the revised and 
rebased 2006 MEI that we adopted beginning in CY 2011. In response to 
those commenters, whom raised many points regarding the appropriateness 
of assigning labor-related costs in the medical equipment and supplies 
and miscellaneous component which do not reflect locality cost 
differentials, we agreed to address the GPCI cost share weights again 
in the CY 2012 PFS proposal. These issues are discussed in greater 
detail in the section of this rule that discusses our determination of 
the cost share weights.
    We also stated in the CY 2011 final rule with comment period that 
we would review the findings of the Secretary's Medicare Geographic 
Payment Summit and the MEI technical advisory panel during future 
rulemaking (75 FR 73256). The Secretary convened the National Summit on 
Health Care Quality and Value on October 4, 2010. This Summit was 
attended by a number of policy experts that engaged in detailed 
discussions regarding geographic adjustment factors and geographic 
variation in payment and the promotion of high quality care. This 
National Summit was useful to informing us on issues which we are 
studying further through three Institute of Medicine studies (including 
the recently released first of three reports on Geographic Adjustment 
Factors and a separate report on Geographic Variation in Health Care 
Spending and the Promotion of High Value Care). In accordance with 
Section 3102(b) of the Affordable Care Act, we are also continuing to 
consider these issues in the course of notice and comment rulemaking 
for the CY 2012 PFS, which includes revisions to the GPCI, and through 
preparation of a report to the Congress that we will be submitting 
later this year in accordance with section 3137(b) of the Affordable 
Care Act on a plan for reforming the hospital wage index. In addition, 
the Agency is currently working through the various administrative 
requirements to formally organize the MEI technical advisory panel. We 
expect that this panel will be convened in the near future. We look 
forward to examining the recommendations of this panel once it has 
issued its report.
(B) Analysis of ACS Rental Data
    In the CY 2011 final rule with comment period, we finalized our 
policy to use the 2010 apartment rental data produced by HUD at the 
50th percentile as the proxy for relative cost differences in physician 
office rents. However, as part of our analysis required by section 
1848(e)(1)(H)(iv) of the Act, we have now examined the suitability of 
utilizing 3-year (2006-2008) ACS rental data to serve as a proxy for 
physician office rents We believe that the ACS rental data provide a 
sufficient degree of reliability and are an appropriate source on which 
to base our PE GPCI office rent proxy. We also believe that the ACS 
data provide a higher degree of accuracy than the HUD data since the 
ACS is updated annually

[[Page 42817]]

and is not based on data collected by the 2000 Census long form. 
Moreover, it is our understanding that the Census long form, which is 
utilized to collect the necessary base year rents for the HUD Fair 
Market Rent (FMR) data, will no longer be available in future years. 
Therefore, we are proposing to use the available 2006 through 2008 ACS 
rental data for two bedroom residential units as the proxy for 
physician office rent. We were not able to collect and analyze 5-year 
ACS rental data in time for this proposed rule. We may use 5-year ACS 
data in future rulemaking decisions and would welcome public comments 
regarding utilization of the 5-year ACS rental data as a proxy for 
physician office rent.
    We believe the ACS data will more accurately reflect geographic 
variation in the office rent component. As in past GPCI updates, we 
propose to apply a nationally uniform weight to the office rent 
component. Although we investigated varying the weight of the office 
rent index for different localities, we could not find a comprehensive 
data source that provides office rent information that would allow 
direct measurement of the variation in this expense among fee schedule 
areas. Therefore, we are proposing to use the 2006-based MEI weight for 
fixed capital and utilities as the weight for the office rent category 
in the PE GPCI, and using the ACS residential rent data to develop the 
practice expense GPCI value. We welcome public comments on whether 
there are potential data sources (especially publicly available 
sources) that would readily provide comprehensive office rent 
information that would allow us to accurately measure the geographic 
variation in this expense among fee schedule areas.
(C) Employee Wage Analysis
    Accurately evaluating the relative price that physicians pay for 
labor inputs requires both a mechanism for selecting the occupations to 
include in the employee wage index and identifying an accurate measure 
of the wages for each occupation. We received comments during the CY 
2011 rulemaking cycle noting that the current employee wage methodology 
may omit key occupational categories for which cost varies 
significantly across regions. Commenters suggested including 
occupations such as accounting, legal, and information technology in 
the employee wage component of the PE GPCI. To address these concerns, 
we propose to revise the employee wage index framework within the 
practice expense (PE) GPCI. Under this new methodology, we would only 
select occupational categories relevant to a physician's practice. We 
would use a comprehensive set of wage data from the Bureau of Labor 
Statistics Occupational Employment Statistics (BLS OES) specific to the 
offices of physicians industry. Utilizing wage and national cost share 
weight data from the BLS OES would not only provide a more systematic 
approach to determining which occupations should be included in the 
non-physician employee wage category of the PE GPCI, but would also 
enable us to determine how much weight each occupation should receive 
within the index.
    Due to its reliability, public availability, level of detail, and 
national scope, we propose to use BLS OES data to estimate both 
occupation cost shares and hourly wages for purposes of the non-
physician employee wage component of the PE GPCI. The OES panel data 
are collected from approximately 200,000 establishments, and provide 
employment and wage estimates for about 800 occupations. At the 
national level, OES provides estimates for over 450 industry 
classifications (using the 3, 4, and 5 digit North American Industry 
Classification System (NAICS)), including the Offices of Physicians 
industry (NAICS 621100). As described in the census, the Offices of 
Physicians industry comprises establishments of health practitioners 
having the degree of M.D. (Doctor of Medicine) or D.O. (Doctor of 
Osteopathy) primarily engaged in the independent practice of general or 
specialized medicine (except psychiatry or psychoanalysis) or surgery. 
These practitioners operate private or group practices in their own 
offices (such as, centers, clinics) or in the facilities of others, 
such as hospitals or Health Maintenance Organization (HMO) medical 
centers. The OES data provide significant detail on occupational 
categories and offer national level cost share estimates for the 
offices of physicians industry.
    We also evaluated available ACS occupational data as a potential 
data source for the non-physician employee wage PE GPCI subcomponent. 
Based on the occupations currently used to calculate employee wages, 
the BLS OES captures occupations with greater relevancy to physician 
office practices and is a more appropriate data source than the 
currently available ACS data. However, we intend to study an expanded 
mix of occupations utilizing 5-year ACS data as that data become 
available. We welcome comments on our proposal to use the BLS OES 
specific to the office of physicians industry. In this proposed 
methodology, we weight each occupation based on its share of total 
labor cost within the offices of physician industry. Specifically, each 
occupation's weight is proportional to the product of its occupation's 
employment share and average hourly wage. In this calculation, we use 
each occupation's employment level rather than hours worked, because 
the BLS OES does not contain industry-specific information describing 
the number of hours worked in each occupation (see: http://www.bls.gov/oes/current/naics4_621100.htm). This proposed methodology would 
account for 90 percent of the total wage share in the office of 
physicians industry. Additionally, this strategy produces 33 individual 
occupations with the highest wage shares and would account for many of 
the occupations commenters have stated were historically excluded from 
the employee wage calculation (for example, accounting, auditors, and 
medical transcriptionists), We also welcome public comments on the 
potential use of the 5-year ACS data to calculate the employee wage 
component of the PE GPCI.
(D) Purchased Services Analysis
    For CY 2012, we are proposing to geographically adjust the labor-
related industries within the ``all other services'' and ``other 
professional expenses'' categories of the MEI. In response to 
commenters who stated that these purchased services were labor-related 
and should be adjusted geographically, we agreed to examine this issue 
further in the CY 2011 final rule with comment period and refrained 
from making any changes. Based on our subsequent examination of this 
issue, we believe it would be appropriate to geographically adjust for 
the labor-related component of purchased services within the ``All 
Other Services'' and ``Other Professional Expenses'' categories using 
BLS wage data. In total, there are 63 industries, or cost categories, 
accounted for within the ``all other services'' and ``other 
professional services'' categories of the 2006-based MEI. As we 
established for purposes of the hospital wage index in 74 FR 43845, we 
define a cost category as labor-related if the cost category is defined 
as being both labor intensive and its costs vary with, or are 
influenced by the local labor market. The total proposed purchased 
services component accounts for 8.095 percent of total practice cost. 
However, only 5.011 percentage points (of the total 8.095 percentage 
points assigned to purchased services) are defined as labor-related and 
thus adjusted for locality cost differences. These 5.011 percentage 
points represent

[[Page 42818]]

cost categories that we believe are labor intensive and have costs that 
vary with, or are influenced by, the local labor market. The labor-
related cost categories include but are not limited to building 
services (such as janitorial and landscaping), security services, and 
advertising services. The remaining weight assigned to the non-labor-
related industries (3.084 percentage points) represent industries that 
do not meet the criteria of being labor intensive or having their costs 
vary with the local labor market.
    In order to calculate the labor-related and non-labor-related 
shares, we would use a similar methodology that is employed in 
estimating the labor-related share of various CMS market baskets. A 
more detailed explanation of this methodology can be found under the 
supporting documents section of the CY 2012 PFS proposed rule web page 
at http://www.cms.gov/PhysicianFeeSched/.
    We believe our analysis, during 2010 and this year, of the current 
methods of establishing PE GPCIs and our evaluation of data that fairly 
and reliably establish distinctions in the cost of operating a medical 
practice in the different fee schedule areas meet the statutory 
requirements of section 1848(e)(1)(H)(iv) of the Act. A more detailed 
discussion of our analysis of current methods of establishing PE GPCIs 
and evaluation of data sources is included in Acumen's draft report 
entitled, ``Proposed Revisions to the Sixth Update of the Geographic 
Practice Cost Index.'' Acumen's draft report and associated analysis of 
the proposed GPCI revisions, including the PE GPCIs, will be made 
publicly available on the CMS Web site. The draft report may be 
accessed from the PFS Web site at: http://www.cms.gov/PhysicianFeeSched/ under the ``Downloads'' section of the CY 2012 PFS 
proposed rule web page.
    Additionally, see section VII.B. of this proposed rule for Table 
66, which reflects the GAF impacts resulting from these proposals. As 
the table demonstrates, the primary driver of the CY 2012 impact is the 
expiration of the work GPCI floor which had produced non-budget neutral 
increases to the CY 2011 GPCIs for lower cost areas as authorized under 
the Affordable Care Act the Medicare and Medicaid Extenders Act (MMEA).
(E) Determining the PE GPCI Cost Share Weights
    To determine the cost share weights for the CY 2012 GPCIs, we are 
proposing to use the weights established in the 2006-based MEI. The MEI 
was rebased and revised in the CY 2011 final rule with comment period 
to reflect the weighted-average annual price change for various inputs 
needed to provide physicians' services. As discussed in detail in that 
section (75 FR 73262 through 73277), the proposed expense categories in 
the MEI, along with their respective weights, were primarily derived 
from data collected in the 2006 AMA PPIS for self-employed physicians 
and selected self-employed non-medical doctor specialties. Since we 
have historically updated the GPCI cost share weights consistent with 
the most recent update to the MEI, and because we have addressed 
commenter concerns regarding the inclusion of the weight assigned to 
utilities with office rent and geographically adjusted for the labor 
intensive industries within the ``all other services'' and ``other 
professional expenses'' MEI categories, we believe it is appropriate to 
adopt the 2006-based MEI cost share weights.
(i) Practice Expense
    For the cost share weight for the proposed CY 2012 PE GPCIs, we 
would use the 2006-based MEI weight for the PE category of 51.734 
percent minus the professional liability insurance category weight of 
4.295 percent. Therefore, we propose a cost share weight for the PE 
GPCIs of 47.439 percent.
(ii) Employee Compensation
    For the employee compensation portion of the PE GPCIs, we would use 
the non-physician employee compensation category weight of 19.153 
percent reflected in the 2006-based MEI.
(iii) Office Rent
    We are proposing that the weight for the office rent component be 
revised from 12.209 percent to 10.223 percent. The 12.209 percent 
office rent GPCI weight was set equal to the 2000-based MEI cost weight 
for office expenses, which was calculated using the American Medical 
Association's (AMA) Socioeconomic Monitoring Survey (SMS). The 12.209 
percent reflected the expenses for rent, depreciation on medical 
buildings, mortgage interest, telephone, and utilities. We are 
proposing to set the GPCI office rent equal to 10.223 percent 
reflecting the 2006-based MEI cost weights (75 FR 73263) for fixed 
capital (reflecting the expenses for rent, depreciation on medical 
buildings and mortgage interest) and utilities. We are no longer 
including telephone costs in the GPCI office rent cost weight because 
we believe these expenses do not vary by geographic area.
    Consistent with the revised and rebased 2006-based MEI which was 
adopted in the CY 2011 final rule with comment period (75 FR 73263), we 
disaggregated the broader office expenses component for the PE GPCI 
into 10 new cost categories. In this disaggregation, the fixed capital 
component is the office expense category applicable to the office rent 
component of the PE GPCI. As discussed in the section dealing with 
office rent, we are proposing to use 2006-2008 ACS rental data as the 
proxy for physician office rent. This data represents a gross rent 
amount and includes data on utilities expenditures. Since it is not 
possible to separate the utilities component of rent for all ACS survey 
respondents, it was necessary to combine these two components to 
calculate office rent and by extension, we propose combining those two 
cost categories when assigning a weight to the office rent component.
(iv) Purchased Services
    As discussed in the previous paragraphs, a new purchased services 
index was created to geographically adjust the labor-related components 
of the ``All Other Services'' and ``Other Professional Expenses'' 
categories of the MEI office expense. In order to calculate the 
purchased services index, we are proposing to merge the corresponding 
weights of these two categories to form a combined purchased services 
weight of 8.095 percent. However, we are proposing to only adjust for 
locality cost differences of the labor-related share of the industries 
comprising the ``All Other Services'' and ``Other Professional 
Expenses'' categories. We have determined that only 5.011 percentage 
points of the 8.095 percentage points would be adjusted for locality 
cost differences (5.011 adjusted purchased service + 3.084 non-adjusted 
purchased services = 8.095 total cost share weight).
(v) Equipment, Supplies, and Other Misc Expenses
    To calculate the proposed medical equipment, supplies, and other 
miscellaneous expenses component, we removed professional liability 
(4.295 percentage points), non-physician employee compensation (19.153 
percentage points), fixed capital/utilities (10.223 percentage points), 
and purchased services (8.095 percentage points) from the PE category 
weight (51.734 percent). Therefore, we are proposing a cost share 
weight for the medical equipment, supplies, and other miscellaneous 
expenses component of 9.968 percent. Consistent with previous 
methodology, this component of the PE

[[Page 42819]]

GPCI is not adjusted for geographical variation.
(vi) Physician Work and Malpractice GPCIs
    Furthermore, we propose to use the physician compensation cost 
category weight of 48.266 percent as the proposed work GPCI cost share 
weight; and we propose to use the professional liability insurance 
weight of 4.295 percent for the malpractice GPCI cost share weight. We 
believe our analysis and evaluation of the weights assigned to each of 
the categories within the PE GPCIs satisfies the statutory requirements 
of section 1848(e)(1)(H)(iv) of the Act.
    The proposed cost share weights for the CY 2012 GPCIs are displayed 
in Table 12. For a detailed discussion regarding the GPCI cost share 
weights and how the weights account for local and national adjustments, 
see Acumen's ``Proposed Revisions to the Sixth Update of the Geographic 
Practice Cost Index'' draft report at (http://www.cms.gov/PhysicianFeeSched/)

          Table 12--Cost Share Weights for CY 2012 GPCI Update
------------------------------------------------------------------------
                                           Current cost   Proposed  cost
            Expense category              share  weights  share  weights
                                                 %               %
------------------------------------------------------------------------
Physician Work..........................          52.466          48.266
Practice Expense........................          43.669          47.439
Employee Compensation...................          18.654          19.153
Office Rent.............................          12.209      \1\ 10.223
Purchased Services......................             N/A       \2\ 8.095
Equipment, Supplies, and Other..........          12.806           9.968
Malpractice Insurance...................           3.865           4.295
------------------------------------------------------------------------
\1\ ACS rental data is a measurement of gross rent and includes
  utilities. In order to accurately capture the utility measurement
  present in the ACS two bedroom gross rent data, the cost share weight
  for utilities is combined with the fixed capital portion to form the
  office rent index.
\2\ The cost share weight for purchased services contains both an
  adjusted and non-adjusted portion. (5.011 percentage points
  geographically adjusted purchased services + 3.084 percentage points
  non-adjusted purchased services).

(F) PE GPCI Floor for Frontier States
    Section 10324(c) of the Affordable Care Act added a new 
subparagraph (I) under section 1848(e) (1) of the Act to establish a 
1.0 PE GPCI floor for physicians' services furnished in frontier States 
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of 
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 
physicians' services furnished in States determined to be frontier 
States. There are no proposed changes to those states identified as 
``frontier States'' for the CY 2012 proposed rule. The qualifying 
States are reflected in Table 13. In accordance with statute, we will 
apply a 1.0 GPCI floor for these states in CY 2012.

                        Table 13--Frontier States Under Section 1848(E)(1)(I) of the Act
                            [As added by section 10324(c) of the Affordable Care Act]
----------------------------------------------------------------------------------------------------------------
                                                                                              Percent frontier
                                                                                             counties  (relative
                     State                         Total counties       Frontier counties    to counties in the
                                                                                                   State)
----------------------------------------------------------------------------------------------------------------
Montana.......................................                   56                    45                    80
Wyoming.......................................                   23                    17                    74
North Dakota..................................                   53                    36                    68
Nevada........................................                   17                    11                    65
South Dakota..................................                   66                    34                    52
----------------------------------------------------------------------------------------------------------------

(2) Summary of CY 2012 PE GPCI Proposal
    The PE GPCIs include four components: Employee compensation, office 
rent, purchased services, and medical equipment, supplies and 
miscellaneous expenses. Our proposals relating to each of these 
components are as follows:
     Employee Compensation: We are proposing to geographically 
adjust the employee compensation using the 2006 through 2008 BLS OES 
data specific to the offices of physicians industry along with 
nationwide wage data to determine the employee compensation component 
of the PE GPCIs. The proposed employee compensation component accounts 
for 19.153 percent of total practice costs or 40.4 percent of the total 
PE GPCIs.
     Office Rents: We are proposing to geographically adjust 
office rent using the 2006-2008 ACS residential rental data for two 
bedroom units as a proxy for the relative cost differences in physician 
office rents. In addition, we are proposing to consolidate the 
utilities into the office rent weight to account for the utility data 
present in ACS gross rent data. The proposed office rent component 
accounts for 10.223 percent of total practice cost or 21.5 percent of 
the PE GPCIs.
     Purchased Services: We are proposing to geographically 
adjust the labor-related component of purchased services within the 
``All Other Services'' and ``Other Professional Expenses ``categories 
using BLS wage data. The methodology employed to estimate purchased 
services expenses is based on the same data used to estimate the 
employee wage index. Specifically, the proposed purchased services 
framework relies on BLS OES wage data to estimate the price of labor in 
industries that physician offices frequently rely upon for contracted 
services. As previously mentioned, the labor-related share adjustment 
for each industry was derived using a similar methodology as is 
employed for estimating the labor-related shares of CMS' market 
baskets.

[[Page 42820]]

Furthermore, the weight assigned to each industry within the purchased 
services index was based on the 2006-based MEI. A more detailed 
discussion regarding CMS market baskets, as well as the corresponding 
definitions of a ``labor- related share'' and a ``non -labor-related 
share'' can be viewed at (74 FR 43845). The total proposed purchased 
services component accounts for 8.095 percent of total practice cost or 
17.1 percent of the PE GPCI. However, the proportion of purchased 
services that is geographically adjusted for locality cost difference 
is 5.011 percentage points of the 8.095 percentage points or 10.6 
percent of the PE GPCI.
     Medical Equipment, Supplies, and other Miscellaneous 
Expenses: We continue to believe that items such as medical equipment 
and supplies have a national market and that input prices do not vary 
appreciably among geographic areas. As discussed in previous GPCI 
updates in the CY 2008 and CY 2011 PFS proposed rules, specifically the 
fifth GPCI update (72 FR 38138) and sixth GPCI update (75 FR 73256), 
respectively, some price differences may exist, but we believe these 
differences are more likely to be based on volume discounts rather than 
on geographic market differences. For example, large physicians' 
practices may utilize more medical equipment and supplies and therefore 
may or may not receive volume discounts on some of these items. To the 
extent that such discounting may exist, it is a function of purchasing 
volume and not geographic location. The proposed medical equipment, 
supplies, and miscellaneous expenses component was factored into the PE 
GPCIs with a component index of 1.000. The proposed medical equipment, 
supplies, and other miscellaneous expense component account for 9.968 
percent of total practice cost or 21.0 percent of the PE GPCI.
c. Malpractice GPCIs
    The malpractice GPCIs are calculated based on insurer rate filings 
of premium data for $1 million to $3 million mature ``claims-made'' 
policies (policies for claims made rather than services furnished 
during the policy term). We chose claims-made policies because they are 
the most commonly used malpractice insurance policies in the United 
States. We used claims-made policy rates rather than occurrence 
policies because a claims-made policy covers physicians for the policy 
amount in effect when the claim is made, regardless of the date of 
event in question; whereas an occurrence policy covers a physician for 
the policy amount in effect at the time of the event in question, even 
if the policy is expired. Based on the data we analyzed, we are 
proposing to revise the cost share weight for the malpractice GPCI from 
3.865 percent to 4.295 percent.
3. Payment Localities
    The current PFS locality structure was developed and implemented in 
1997. There are currently 89 total PFS localities; 34 localities are 
Statewide areas (that is, only one locality for the entire State). 
There are 52 localities in the other 18 States, with 10 States having 2 
localities, 2 States having 3 localities, 1 State having 4 localities, 
and 3 States having 5 or more localities. The District of Columbia, 
Maryland, Virginia suburbs, Puerto Rico, and the Virgin Islands are 
additional localities that make up the remainder of the total of 89 
localities. The development of the current locality structure is 
described in detail in the CY 1997 PFS proposed rule (61 FR 34615) and 
the subsequent final rule with comment period (61 FR 59494).
    As we have previously noted in the CYs 2008 and 2009 proposed rules 
(72 FR 38139 and 73 FR 38513), any changes to the locality 
configuration must be made in a budget neutral manner within a State 
and can lead to significant redistributions in payments. For many 
years, we have not considered making changes to localities without the 
support of a State medical association in order to demonstrate 
consensus for the change among the professionals whose payments would 
be affected (since such changes would be redistributive, with some 
increasing and some decreasing). However, we have recognized that, over 
time, changes in demographics or local economic conditions may lead us 
to conduct a more comprehensive examination of existing payment 
localities.
    For the past several years, we have been involved in discussions 
with physician groups and their representatives about recent shifts in 
relative demographics and economic conditions. We explained in the CY 
2008 PFS final rule with comment period that we intended to conduct a 
thorough analysis of potential approaches to reconfiguring localities 
and would address this issue again in future rulemaking. For more 
information, we refer readers to the CY 2008 PFS proposed rule (72 FR 
38139) and subsequent final rule with comment period (72 FR 66245).
    As a follow-up to the CY 2008 PFS final rule with comment period, 
we contracted with Acumen to conduct a preliminary study of several 
options for revising the payment localities on a nationwide basis. The 
contractor's interim report was posted on the CMS Web site on August 
21, 2008, and we requested comments from the public. The report 
entitled, ``Review of Alternative GPCI Payment Locality Structures,'' 
remains accessible from the CMS PFS Web page under the heading 
``Interim Study of Alternative Payment Localities under the PFS.'' The 
report may also be accessed directly from the following link: http://www.cms.hhs.gov/PhysicianFeeSched/10_Interim_Study.asp#TopOfPage.
    We note that the discussion of PFS payment localities and our 
preliminary study of alternative payment locality configurations in the 
CY 2011 PFS proposed rule was intended for informational purposes only. 
We are not making any proposals regarding the PFS locality 
configurations for CY 2012.
4. Report From the Institute of Medicine
    At our request, the Institute of Medicine is conducting a study of 
the geographic adjustment factors in Medicare payment. It is a 
comprehensive empirical study of the geographic adjustment factors 
established under sections 1848(e) (GPCI) and 1886(d)(3)(E) (hospital 
wage index) of the Act. These adjustments are designed to ensure 
Medicare payment fees and rates reflect differences in input costs 
across geographic areas. The factors IOM is evaluating include the--
     Accuracy of the adjustment factors;
     Methodology used to determine the adjustment factors, and
     Sources of data and the degree to which such data are 
representative.
    Within the context of the U.S. health care marketplace, the IOM is 
also evaluating and considering the--
     Effect of the adjustment factors on the level and 
distribution of the health care workforce and resources, including--
    ++ Recruitment and retention taking into account mobility between 
urban and rural areas;
    ++ Ability of hospitals and other facilities to maintain an 
adequate and skilled workforce; and
    ++ Patient access to providers and needed medical technologies;
     Effect of adjustment factors on population health and 
quality of care; and
     Effect of the adjustment factors on the ability of 
providers to furnish efficient, high value care.
    The first report ``Geographic Adjustment in Medicare Payment, Phase 
I: Improving Accuracy'' is a ``Phase I report'' that was released June 
1, 2011 and is available on the IOM Web site

[[Page 42821]]

http://www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx. It evaluates the accuracy of 
geographic adjustment factors and the methodology and data used to 
calculate them. The IOM is conducting further study on GPCI payment 
issues, and a supplemental report is expected to be issued in the 
summer of 2011 to address those issues. In its final report, scheduled 
to be released in the spring of 2012, the IOM will consider the role of 
Medicare payments in addressing matters such as the distribution of the 
health care workforce, population health, and the ability of providers 
to produce high-value, high-quality health care.
    The recommendations specifically related to the GPCI included in 
IOM'sfirst phase report are summarized below:
     Recommendation 2-1: The same labor market definition 
should be used for both the hospital wage index and the physician 
geographic adjustment factor. Metropolitan statistical areas and 
Statewide non-metropolitan statistical areas should serve as the basis 
for defining these labor markets.
     Recommendation 5-1: The IOM recommends constructing the 
geographic practice cost indexes with the full range of occupations 
employed in physicians' offices, each with a fixed national weight 
based on the hours of each occupation employed in physicians' offices 
nationwide.
     Recommendation 5-2. The committee recommends that the 
Centers for Medicare and Medicaid Services and the Bureau of Labor 
Statistics develop an agreement allowing the Bureau of Labor Statistics 
to analyze confidential data for the Centers for Medicare and Medicaid 
Services.
     Recommendation 5-3: The committee recommends that a new 
source of information be identified to obtain data on commercial office 
rent per square foot.
    Because of the timeline related to the release of the PFS proposed 
rule, we did not have adequate time to fully evaluate these 
recommendations in the CY 2012 proposed rule. As previously discussed, 
the IOM will be releasing a supplemental report in the summer of 2011 
that will address additional analysis related to the physician work 
GPCI. We will address the IOM recommendations once we are able to 
assess the IOM's full recommendations and have given our stakeholders 
an opportunity to evaluate them. Any changes to the GPCIs in response 
to the aforementioned IOM recommendations will be proposed through the 
rulemaking process to allow an opportunity for public notice comment 
before making revisions.

III. Medicare Telehealth Services for the Physician Fee Schedule

A. Billing and Payment for Telehealth Services

1. History
    Prior to January 1, 1999, Medicare coverage for services delivered 
via a telecommunications system was limited to services that did not 
require a face-to-face encounter under the traditional model of medical 
care. Examples of these services included interpretation of an x-ray, 
or electrocardiogram, or electroencephalogram tracing, and cardiac 
pacemaker analysis.
    Section 4206 of the BBA provided for coverage of, and payment for, 
consultation services delivered via a telecommunications system to 
Medicare beneficiaries residing in rural health professional shortage 
areas (HPSAs) as defined by the Public Health Service Act. 
Additionally, the BBA required that a Medicare practitioner 
(telepresenter) be with the patient at the time of a teleconsultation. 
Further, the BBA specified that payment for a teleconsultation had to 
be shared between the consulting practitioner and the referring 
practitioner and could not exceed the fee schedule payment which would 
have been made to the consultant for the service provided. The BBA 
prohibited payment for any telephone line charges or facility fees 
associated with the teleconsultation. We implemented this provision in 
the CY 1999 PFS final rule with comment period (63 FR 58814).
    Effective October 1, 2001, section 223 of the Medicare, Medicaid 
and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106-
554)(BIPA) added a new section 1834(m) to the Act which significantly 
expanded Medicare telehealth services. Section 1834(m)(4)(F)(i) of the 
Act defines Medicare telehealth services to include consultations, 
office visits, office psychiatry services, and any additional service 
specified by the Secretary, when delivered via a telecommunications 
system. We first implemented this provision in the CY 2002 PFS final 
rule with comment period (66 FR 55246). Section 1834(m)(4)(F)(ii) of 
the Act required the Secretary to establish a process that provides for 
annual updates to the list of Medicare telehealth services. We 
established this process in the CY 2003 PFS final rule with comment 
period (67 FR 79988).
    As specified in regulations at Sec.  410.78(b), we generally 
require that a telehealth service be furnished via an interactive 
telecommunications system. Under Sec.  410.78(a)(3), an interactive 
telecommunications system is defined as multimedia communications 
equipment that includes, at a minimum, audio and video equipment 
permitting two-way, real time interactive communication between the 
patient and the practitioner at the distant site. Telephones, facsimile 
machines, and electronic mail systems do not meet the definition of an 
interactive telecommunications system. An interactive 
telecommunications system is generally required as a condition of 
payment; however, section 1834(m)(1) of the Act does allow the use of 
asynchronous ``store-and-forward'' technology in delivering these 
services when the originating site is a Federal telemedicine 
demonstration program in Alaska or Hawaii. As specified in regulations 
at Sec.  410.78(a)(1), store and forward means the asynchronous 
transmission of medical information from an originating site to be 
reviewed at a later time by the practitioner at the distant site.
    Medicare telehealth services may be provided to an eligible 
telehealth individual notwithstanding the fact that the individual 
practitioner providing the telehealth service is not at the same 
location as the beneficiary. An eligible telehealth individual means an 
individual enrolled under Part B who receives a telehealth service 
furnished at an originating site. As specified in BIPA, originating 
sites are limited under section 1834(m)(3)(C) of the Act to specified 
medical facilities located in specific geographic areas. The initial 
list of telehealth originating sites included the office of a 
practitioner, a critical access hospital (CAH), a rural health clinic 
(RHC), a federally qualified health center (FQHC) and a hospital (as 
defined in Section 1861(e)). More recently, section 149 of the Medicare 
Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275) 
(MIPPA) expanded the list of telehealth originating sites to include 
hospital-based renal dialysis centers, skilled nursing facilities 
(SNFs), and community mental health centers (CMHCs). In order to serve 
as a telehealth originating site, these sites must be located in an 
area designated as a rural health professional shortage area (HPSA), in 
a county that is not in a metropolitan statistical area (MSA), or must 
be an entity that participates in a Federal telemedicine demonstration 
project that has been approved by (or receives funding from) the 
Secretary of Health and Human Services as of

[[Page 42822]]

December 31, 2000. Finally, section 1834(m) of the Act does not require 
the eligible telehealth individual to be presented by a practitioner at 
the originating site.
2. Current Telehealth Billing and Payment Policies
    As noted above, Medicare telehealth services can only be furnished 
to an eligible telehealth beneficiary in an originating site. An 
originating site is defined as one of the specified sites where an 
eligible telehealth individual is located at the time the service is 
being furnished via a telecommunications system. In general, 
originating sites must be located in a rural HPSA or in a county 
outside of an MSA. The originating sites authorized by the statute are 
as follows:
     Offices of a physician or practitioner
     Hospitals
     CAHs
     RHCs
     FQHCs
     Hospital-Based Or Critical Access Hospital-Based Renal 
Dialysis Centers (including Satellites)
     SNFs
     CMHCs
    Currently approved Medicare telehealth services include the 
following:
     Initial inpatient consultations
     Follow-up inpatient consultations
     Office or other outpatient visits
     Individual psychotherapy
     Pharmacologic management
     Psychiatric diagnostic interview examination
     End-stage renal disease (ESRD) related services
     Individual and group medical nutrition therapy (MNT)
     Neurobehavioral status exam
     Individual and group health and behavior assessment and 
intervention (HBAI)
     Subsequent hospital care
     Subsequent nursing facility care
     Individual and group kidney disease education (KDE)
     Individual and group diabetes self-management training 
services (DSMT)
    In general, the practitioner at the distant site may be any of the 
following, provided that the practitioner is licensed under State law 
to furnish the service being furnished via a telecommunications system:
     Physician;
     Physician assistant (PA);
     Nurse practitioner (NP);
     Clinical nurse specialist (CNS);
     Nurse-midwife;
     Clinical psychologist;
     Clinical social worker; or a
     Registered dietitian or nutrition professional.
    Practitioners furnishing Medicare telehealth services are located 
at a distant site, and they submit claims for telehealth services to 
the Medicare contractors that process claims for the service area where 
their distant site is located. Section 1834(m)(2)(A) of the Act 
requires that a practitioner who furnishes a telehealth service to an 
eligible telehealth individual be paid an amount equal to the amount 
that the practitioner would have been paid if the service had been 
furnished without the use of a telecommunications system. Distant site 
practitioners must submit the appropriate HCPCS procedure code for a 
covered professional telehealth service, appended with the -GT (Via 
interactive audio and video telecommunications system) or -GQ (Via 
asynchronous telecommunications system) modifier. By reporting the -GT 
or -GQ modifier with a covered telehealth procedure code, the distant 
site practitioner certifies that the beneficiary was present at a 
telehealth originating site when the telehealth service was furnished. 
The usual Medicare deductible and coinsurance policies apply to the 
telehealth services reported by distant site practitioners.
    Section 1834(m)(2)(B) of the Act provides for payment of a facility 
fee to the originating site. To be paid the originating site facility 
fee, the provider or supplier where the eligible telehealth individual 
is located must submit a claim with HCPCS code Q3014 (Telehealth 
originating site facility fee), and the provider or supplier is paid 
according to the applicable payment methodology for that facility or 
location. The usual Medicare deductible and coinsurance policies apply 
to HCPCS code Q3014. By submitting HCPCS code Q3014, the originating 
site authenticates that it is located in either a rural HPSA or non-MSA 
county or is an entity that participates in a Federal telemedicine 
demonstration project that has been approved by (or receives funding 
from) the Secretary of Health and Human Services as of December 31, 
2000 as specified in section 1834(m)(4)(C)(i)(III) of the Act.
    As previously described, certain professional services that are 
commonly furnished remotely using telecommunications technology, but 
that do not require the patient to be present in-person with the 
practitioner when they are furnished, are covered and paid in the same 
way as services delivered without the use of telecommunications 
technology when the practitioner is in-person at the medical facility 
furnishing care to the patient. Such services typically involve 
circumstances where a practitioner is able to visualize some aspect of 
the patient's condition without the patient being present and without 
the interposition of a third person's judgment. Visualization by the 
practitioner can be possible by means of x-rays, electrocardiogram or 
electroencephalogram tracings, tissue samples, etc. For example, the 
interpretation by a physician of an actual electrocardiogram or 
electroencephalogram tracing that has been transmitted via telephone 
(that is, electronically, rather than by means of a verbal description) 
is a covered physician's service. These remote services are not 
Medicare telehealth services as defined under section 1834(m) of the 
Act. Rather, these remote services that utilize telecommunications 
technology are considered physicians' services in the same way as 
services that are furnished in-person without the use of 
telecommunications technology; they are paid under the same conditions 
as in-person physicians' services (with no requirements regarding 
permissible originating sites), and should be reported in the same way 
(that is, without the -GT or -GQ modifier appended).

B. Requests for Adding Services to the List of Medicare Telehealth 
Services

    As noted above, in the December 31, 2002 Federal Register (67 FR 
79988), we established a process for adding services to or deleting 
services from the list of Medicare telehealth services. This process 
provides the public with an ongoing opportunity to submit requests for 
adding services. We assign any request to make additions to the list of 
Medicare telehealth services to one of the following categories:
     Category 1: Services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the list of telehealth services. In reviewing these 
requests, we look for similarities between the requested and existing 
telehealth services for the roles of, and interactions among, the 
beneficiary, the physician (or other practitioner) at the distant site 
and, if necessary, the telepresenter. We also look for similarities in 
the telecommunications system used to deliver the proposed service, for 
example, the use of interactive audio and video equipment.
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests includes an 
assessment of whether the use of a telecommunications system to deliver 
the service produces similar

[[Page 42823]]

diagnostic findings or therapeutic interventions as compared with the 
in-person delivery of the same service. Requestors should submit 
evidence showing that the use of a telecommunications system does not 
affect the diagnosis or treatment plan as compared to in-person 
delivery of the requested service.
    Since establishing the process to add or remove services from the 
list of approved telehealth services, we have added the following to 
the list of Medicare telehealth services: individual and group HBAI 
services; psychiatric diagnostic interview examination; ESRD services 
with 2 to 3 visits per month and 4 or more visits per month (although 
we require at least 1 visit a month to be furnished in-person by a 
physician, CNS, NP, or PA in order to examine the vascular access 
site); individual and group MNT; neurobehavioral status exam; initial 
and follow-up inpatient telehealth consultations for beneficiaries in 
hospitals and skilled nursing facilities (SNFs); subsequent hospital 
care (with the limitation of one telehealth visit every 3 days); 
subsequent nursing facility care (with the limitation of one telehealth 
visit every 30 days); individual and group KDE; and individual and 
group DSMT services (with a minimum of 1 hour of in-person instruction 
to ensure effective injection training).
    Requests to add services to the list of Medicare telehealth 
services must be submitted and received no later than December 31 of 
each calendar year to be considered for the next rulemaking cycle. For 
example, requests submitted before the end of CY 2011 will be 
considered for the CY 2013 proposed rule. Each request for adding a 
service to the list of Medicare telehealth services must include any 
supporting documentation the requester wishes us to consider as we 
review the request. Because we use the annual PFS rulemaking process as 
a vehicle for making changes to the list of Medicare telehealth 
services, requestors should be advised that any information submitted 
is subject to public disclosure for this purpose. For more information 
on submitting a request for an addition to the list of Medicare 
telehealth services, including where to mail these requests, we refer 
readers to the CMS Web site at http://www.cms.gov/telehealth/.

C. Submitted Requests for Addition to the List of Telehealth Services 
for CY 2012

    We received requests in CY 2010 to add the following services as 
Medicare telehealth services effective for CY 2012: (1) Smoking 
cessation services; (2) critical care services; (3) domiciliary or rest 
home evaluation and management services; (4) genetic counseling 
services; (5) online evaluation and management services; (6) data 
collection services; and (7) audiology services. The following presents 
a discussion of these requests, including our proposals for additions 
to the CY 2012 telehealth list.
1. Smoking Cessation Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add smoking cessation services, reported by CPT 
codes 99406 (Smoking and tobacco use cessation counseling visit; 
intermediate, greater than 3 minutes up to 10 minutes) and 99407 
(Smoking and tobacco use cessation counseling visit; intensive, greater 
than 10 minutes) to the list of approved telehealth services for CY 
2012 on a category 1 basis.
    Smoking Cessation services are defined as face-to-face behavior 
change interventions. We believe the interaction between a practitioner 
and a beneficiary receiving smoking cessation services is similar to 
the education, assessment, and counseling elements of individual KDE 
reported by HCPCS code G0420 (Face-to-face educational services related 
to the care of chronic kidney disease; individual, per session, per 1 
hour), and individual MNT services, reported by HCPCS code G0270 
(Medical nutrition therapy; reassessment and subsequent intervention(s) 
following second referral in the same year for change in diagnosis, 
medical condition or treatment regimen (including additional hours 
needed for renal disease), individual, face-to-face with the patient, 
each 15 minutes); CPT code 97802 (Medical nutrition therapy; initial 
assessment and intervention, individual, face-to-face with the patient, 
each 15 minutes); and CPT code 97803 (Medical nutrition therapy; re-
assessment and intervention, individual, face-to-face with the patient, 
each 15 minutes), all services that are currently on the telehealth 
list.
    Therefore, we are proposing to add CPT codes 99406 and 99407 to the 
list of telehealth services for CY 2012 on a category 1 basis. 
Additionally, we are proposing to add HCPCS codes G0436 (Smoking and 
tobacco cessation counseling visit for the asymptomatic patient; 
intermediate, greater than 3 minutes, up to 10 minutes) and G0437 
(Smoking and tobacco cessation counseling visit for the asymptomatic 
patient; intensive, greater than 10 minutes) to the list of telehealth 
services for CY 2012 since these related services are similar to the 
codes for which we received formal public requests.
    Consistent with this proposal, we are also proposing to revise our 
regulations at Sec.  410.78(b) and Sec.  414.65(a)(1) to include these 
smoking cessation services as Medicare telehealth services.
2. Critical Care Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add critical care service CPT codes 99291 
(Critical care, evaluation and management of the critically ill or 
critically injured patient; first 30-74 minutes) and 99292 (Critical 
care, evaluation and management of the critically ill or critically 
injured patient; each additional 30 minutes) to the list of approved 
telehealth services. We previously received this request for the CY 
2009 and CY 2010 PFS rulemaking cycles (73 FR 38517, 73 FR 69744-5, 74 
FR 33548, and 74 FR 61764) and did not add the codes on a category 1 
basis due to the acute nature of the typical patient. We continue to 
believe that patients requiring critical care services are more acutely 
ill than those patients typically receiving any service currently on 
the list of telehealth services. Therefore, we cannot consider critical 
care services on a category 1 basis.
    In the CY 2009 PFS proposed rule (73 FR 38517), we explained that 
we had no evidence suggesting that the use of telehealth could be a 
reasonable surrogate for the in-person delivery of critical care 
services; therefore, we would not add the services on a category 2 
basis. Requestors submitted new studies for CY 2012, but none 
demonstrated that comparable outcomes to a face-to-face encounter can 
be achieved using telehealth to deliver these services. The studies we 
received primarily addressed other issues relating to telehealth 
services. Some studies addressed the cost benefits and cost savings of 
telehealth services. Others focused on the positive outcomes of 
telehealth treatment when compared with no treatment at all. One 
submitted study addressed the equivalency of patient outcomes for 
telehealth services delivered to patients in emergency rooms, but the 
study's authors specifically restricted their population to patients 
whose complaints were not considered to be genuine emergencies. Given 
that limitation, it seems unlikely that any of these patients would 
have required critical care services as defined by CPT codes 99291 and 
99292.
    We note that consultations are included on the list of Medicare 
telehealth services and may be billed by practitioners furnishing 
services to critically ill patients. These services are described by 
the following HCPCS codes: G0425 (Initial inpatient

[[Page 42824]]

telehealth consultation, typically 30 minutes communicating with the 
patient via telehealth), G0426 (Initial inpatient telehealth 
consultation, typically 50 minutes communicating with the patient via 
telehealth), G0427 (Initial inpatient telehealth consultation, 
typically 70 minutes or more communicating with the patient via 
telehealth), G0406 (Follow-up inpatient telehealth consultation, 
limited, physicians typically spend 15 minutes communicating with the 
patient via telehealth), G0407 (Follow-up inpatient telehealth 
consultation, intermediate, physicians typically spend 25 minutes 
communicating with the patient via telehealth), and G0408 (Follow-up 
inpatient telehealth consultation, complex, physicians typically spend 
35 minutes or more communicating with the patient via telehealth). 
Critical care services, as reported by the applicable CPT codes and 
described in the introductory language in the CPT book, consist of 
direct delivery by a physician of medical care for a critically ill or 
injured patient, including high complexity decision-making to assess, 
manipulate, and support vital system functions. Critical care requires 
interpretation of multiple physiologic parameters and/or application of 
advanced technologies, including temporary pacing, ventilation 
management, and vascular access services. The payment rates under the 
PFS reflect this full scope of physician work. To add the critical 
services to the telehealth list would require the physician to be able 
to deliver this full scope of services via telehealth. Based on the 
code descriptions, we have previously believed that it is not possible 
to deliver the full range of critical care services without a physical 
physician presence with the patient.
    We note that there are existing Category III CPT codes (temporary 
codes for emerging services that allow data collection) for remote 
real-time interactive video conferenced critical care services that, 
consistent with our treatment of other Category III CPT codes, are not 
nationally priced under the PFS. The fact that the CPT Editorial Panel 
created these additional Category III CPT codes suggests to us that 
these video-conferenced critical care services are not the same as the 
in-person critical care services requested for addition to the 
telehealth list.
    Because we did not find evidence that use of a telecommunications 
system to deliver critical care services produces similar diagnostic or 
therapeutic outcomes as compared with the face-to-face deliver of the 
services, we are not proposing to add critical care services (as 
described by CPT codes 99291 and 99292) to the list of approved 
telehealth services. We reiterate that our decision not to propose to 
add critical care services to the list of approved telehealth services 
does not preclude physicians from furnishing telehealth consultations 
to critically ill patients using the consultation codes that are on the 
list of Medicare telehealth services.
3. Domiciliary or Rest Home Evaluation and Management Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add the following domiciliary or rest home 
evaluation and management CPT codes to the telehealth list for CY 2012:
     99334 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: A problem focused interval history; a problem 
focused examination; or straightforward medical decision making. 
Counseling and/or coordination of care with other providers or agencies 
are provided consistent with the nature of the problem(s) and the 
patient's and/or family's needs. Usually, the presenting problem(s) are 
self-limited or minor. Physicians typically spend 15 minutes with the 
patient and/or family or caregiver).
     99335 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: An expanded problem focused interval history; 
An expanded problem focused examination; Medical decision making of low 
complexity. Counseling and/or coordination of care with other providers 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and/or family's needs. Usually, the presenting 
problem(s) are of low to moderate severity. Physicians typically spend 
25 minutes with the patient and/or family or caregiver).
     99336 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: a detailed interval history; a detailed 
examination; medical decision making of moderate complexity. Counseling 
and/or coordination of care with other providers or agencies are 
provided consistent with the nature of the problem(s) and the patient's 
and/or family's needs. Usually, the presenting problem(s) are of 
moderate to high severity. Physicians typically spend 40 minutes with 
the patient and/or family or caregiver).
     99337 (Domiciliary or rest home visit for the evaluation 
and management of an established patient, which requires at least 2 of 
these 3 key components: A comprehensive interval history; a 
comprehensive examination; medical decision making of moderate to high 
complexity. Counseling and/or coordination of care with other providers 
or agencies are provided consistent with the nature of the problem(s) 
and the patient's and/or family's needs. Usually, the presenting 
problem(s) are of moderate to high severity. The patient may be 
unstable or may have developed a significant new problem requiring 
immediate physician attention. Physicians typically spend 60 minutes 
with the patient and/or family or caregiver).
    A domiciliary or rest home is not permitted under current statute 
to serve as an originating site for Medicare telehealth services. 
Therefore, we are not proposing to add domiciliary or rest home 
evaluation and management services to the list of Medicare telehealth 
services for CY 2012.
4. Genetic Counseling Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT code 96040 (Medical genetics and genetic 
counseling services, each 30 minutes face-to-face with patient/family) 
to the telehealth list for CY 2012. We note that CPT guidance regarding 
reporting genetic counseling and education furnished by a physician to 
an individual directs physicians to evaluation and management (E/M) CPT 
codes and that services described by CPT code 96040 are provided by 
trained genetic counselors. Physicians and nonphysician practitioners 
who may independently bill Medicare for their service and who are 
counseling individuals would generally report office or other 
outpatient evaluation and management (E/M) CPT codes for office visits 
that involve significant counseling, including genetic counseling, and 
these office visit CPT codes are already on the list of telehealth 
services. CPT code 96040 would only be reported by genetic counselors 
for genetic counseling services. These practitioners cannot bill 
Medicare directly for their professional services and they are also not 
on the list of practitioners who can furnish telehealth services 
(specified in section 1834(m)(4)(E) of the Act). As such, we do not 
believe that it would be necessary or appropriate to add CPT code 96040 
to the list of Medicare telehealth services. Therefore, we are not 
proposing to add genetic counseling

[[Page 42825]]

services to the list of Medicare telehealth services for CY 2012.
5. Online Evaluation and Management Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT code 99444 (Online evaluation and 
management service provided by a physician to an established patient, 
guardian, or health care provider not originating from a related E/M 
service provided within the previous 7 days, using the Internet or 
similar electronic communications network) to the list of Medicare 
telehealth services.
    As we explained in the CY 2008 PFS final rule with comment period 
(72 FR 66371), we assigned a status indicator of ``N'' (Non-covered 
service) to these services because: (1) These services are non-face-to-
face; and (2) the code descriptor includes language that recognizes the 
provision of services to parties other than the beneficiary and for 
whom Medicare does not provide coverage (for example, a guardian).
    According to section 1834(m)(2)(A) of the Act, Medicare is required 
to pay for telehealth services at an amount equal to the amount that a 
practitioner would have been paid had such service been furnished 
without the use of a telecommunications system. As such, we do not 
believe it would be appropriate to make payment for services furnished 
via telehealth when those services would not otherwise be covered under 
Medicare. Because CPT code 99444 is currently noncovered, we are not 
proposing to add online evaluation and management services to the list 
of Medicare Telehealth Services for CY 2012.
6. Data Collection Services
    The American Telemedicine Association and the Marshfield Clinic 
submitted requests to add CPT codes 99090 (Analysis of clinical data 
stored in computers (e.g., ECGs, blood pressures, hematologic data)) 
and 99091(Collection and interpretation of physiologic data (e.g., ECG, 
blood pressure, glucose monitoring) digitally stored and/or transmitted 
by the patient and/or caregiver to the physician or other qualified 
health care professional, requiring a minimum of 30 minutes of time) to 
the list of Medicare telehealth services.
    As we explained in the CY 2002 PFS final rule with comment period 
(66 FR 55309), we assigned a status indicator of ``B'' (Payment always 
bundled into payment for other services not specified) to these 
services because the associated work is considered part of the pre- and 
post-service work of an E/M service. We note that many E/M codes are on 
the list of Medicare telehealth services.
    According to section 1834(m)(2)(A) of the Act, Medicare is required 
to pay for telehealth services an amount equal to the amount that a 
practitioner would have been paid had such service been furnished 
without the use of a telecommunications system. Similar to the point 
noted above for online E/M services, we do not believe it would be 
appropriate to make separate payment for services furnished via 
telehealth when Medicare would not otherwise make separate payment for 
the services. Moreover, we believe the payment for these data 
collection services should be bundled into the payment for E/M 
services, many of which are already on the Medicare telehealth list. 
Because CPT codes 99090 and 99091 are currently bundled, we are not 
proposing to add data collection services to the list of Medicare 
telehealth services for CY 2012.
7. Audiology Services
    The American Academy of Audiology submitted a request that CMS add 
services that audiologists provide for balance disorders and hearing 
loss to the list of Medicare telehealth services. The request did not 
include specific HCPCS codes. Nevertheless, it is not within our 
administrative authority to pay audiologists for services furnished via 
telehealth. The statute authorizes the Secretary to pay for telehealth 
services only when furnished by a physician or a practitioner as 
physician or practitioner are defined in sections 1834(m)(4)(D) and (E) 
of the Act. Therefore, we are not proposing to add services that are 
primarily provided by audiologists to the list of Medicare telehealth 
services for CY2012.

D. The Process for Adding HCPCS Codes as Medicare Telehealth Services

    Along with its submission of codes for consideration as additions 
to the Medicare telehealth list for CY 2012, the American Telemedicine 
Association (ATA) also requested that CMS consider revising the annual 
process for adding to or deleting services from the list of telehealth 
services. The existing process, adopted in the CY 2003 PFS rulemaking 
cycle (67 FR 43862 through 43863 and 67 FR 79988 through 79989), is 
described in section III.B. of this proposed rule. The following 
discussion includes a summary of recent requests by the ATA and other 
stakeholders for changes to the established process for adding services 
to the telehealth list, an assessment of our historical experience with 
the current process including the request review criteria, and our 
proposed refinement to the process for adding services to the 
telehealth list that would be used in our evaluation of candidate 
telehealth services beginning for CY 2013.
    The ATA asked CMS to consider two specific changes to the process, 
including:
     Broadening the factors for consideration to include 
shortages of health professionals to provide in-person services, speed 
of access to in-person services, and other barriers to care for 
beneficiaries; and
     Equalizing the standard for adding telehealth services 
with the standard for deleting telehealth services by adopting a 
standard that allows services that are safe, effective or medically 
beneficial when furnished via telehealth to be added to the list of 
Medicare telehealth services. Similarly, we have received 
recommendations that CMS place all codes payable under the PFS on the 
telehealth list and allow physicians and practitioners to make a 
clinical determination in each case about whether a medically 
reasonable and necessary service could be appropriately furnished to a 
beneficiary through telehealth. Under this scenario, stakeholders have 
argued that CMS would only remove services from the telehealth list 
under its existing policy for service removal; specifically, that a 
decision to remove a service from the list of telehealth services would 
be made using evidence-based, peer-reviewed data which indicate that a 
specific service is not safe, effective, or medically beneficial when 
furnished via telehealth (67 FR 79988).
    While we share the interests of stakeholders in reducing barriers 
to health care access faced by some beneficiaries, given that section 
1834(m)(2)(F)(ii) of the Act requires the Secretary to establish a 
process that provides, on an annual basis, for the addition or deletion 
of telehealth services (and HCPCS codes), as appropriate, we do not 
believe it would be appropriate to add all services for which payment 
is made under the PFS to the telehealth list without explicit 
consideration as to whether the candidate service could be effectively 
furnished through telehealth. For example, addition of all codes to the 
telehealth list could result in a number of services on the list that 
could never be furnished by a physician or nonphysician practitioner 
who was not physically present with the beneficiary, such as major 
surgical procedures and interventional radiology services. Furthermore, 
we do not believe it would

[[Page 42826]]

be appropriate to add services to the telehealth list without explicit 
consideration as to whether or not the nature of the service described 
by a candidate code allows the service to be furnished as effectively 
through telehealth as in a face-to-face encounter. Section 
1834(m)(2)(A) of the Act requires that the distant site physician or 
practitioner furnishing the telehealth service must be paid an amount 
equal to the amount the physician or practitioner would have been paid 
under the PFS has such service been furnished without the use of a 
telecommunications system. Therefore, we believe that candidate 
telehealth services must also be covered when furnished in-person; and 
that any service that would only be furnished through a 
telecommunications system would be a new service and, therefore, not a 
candidate for addition to the telehealth list. In view of these 
considerations, we will continue to consider candidate additions to the 
telehealth list on a HCPCS code-specific basis based on requests from 
the public and our own considerations.
    We also believe it continues to be most appropriate to consider 
candidate services for the telehealth list based on the two mutually 
exclusive established categories into which all services fall--
specifically, services that are similar to services currently on the 
telehealth list (category 1) and services that are not similar to 
current telehealth services (category 2). Under our existing policy, we 
add services to the telehealth list on a category 1 basis when we 
determine that they are similar to services on the existing telehealth 
list with respect to the roles of, and interactions among, the 
beneficiary, physician (or other practitioner) at the distant site and, 
if necessary, the telepresenter (67 FR 43862). Since CY 2003, we have 
added 35 services to the telehealth list on a category 1 basis based on 
public requests and our own identification of such services. We believe 
it is efficient and valuable to maintain the existing policy that 
allows us to consider requests for additions to the telehealth list on 
a category 1 basis and propose to add them to the telehealth list if 
the existing criteria are met. This procedure expedites our ability to 
identify codes for the telehealth list that resemble those services 
already on this list, streamlining our review process and the public 
request and information-submission process for services that fall into 
this category. Therefore, we believe that any changes to the process 
for adding codes to the telehealth list should be considered with 
respect to category 2 additions, rather than category 1 additions.
    Our existing criteria for consideration of codes that would be 
category 2 additions, specifically those candidate telehealth services 
that are not similar to any current telehealth services, include an 
assessment of whether the use of a telecommunications system to deliver 
the services produces similar diagnostic findings or therapeutic 
interventions as compared with a face-to-face in-person delivery of the 
same service (67 FR 43682). In other words, the discrete outcome of the 
interaction between the clinician and patient facilitated by a 
telecommunications system should correlate well with the discrete 
outcome of the clinician-patient interaction when performed face to-
face. In the CY 2003 PFS proposed rule (67 FR 43862), we explained that 
requestors for category 2 additions to the telehealth list should 
submit evidence that the use of a telecommunications system does not 
affect the diagnosis or treatment plan as compared to in-person 
delivery of the service. We indicated that if evidence shows that the 
candidate telehealth service is equivalent when furnished in person or 
through telehealth, we would add it to the list of telehealth services. 
We refer to this criterion in further discussion in this proposed rule 
as the ``comparability standard.'' We stated in the CY 2003 PFS 
proposed rule (67 FR 43862) that if we determine that the use of a 
telecommunications system changes the nature or outcome of the service, 
for example, as compared with the in-person delivery of the service, we 
would review the telehealth service addition request as a request for a 
new service, rather than a different method of delivering an existing 
Medicare service. For coverage and payment of most services, Medicare 
requires that a new service must: (1) Fall into a Medicare benefit 
category; (2) be reasonable and necessary in accordance with section 
1862(a)(1)(A) of the Act; and (3) not be explicitly excluded from 
coverage. In such a case, the requestor would have the option of 
applying for a national coverage determination for the new service.
    We believe it is most appropriate to address the ATA and other 
stakeholder requests to broaden the current factors we consider when 
deciding whether to add candidate services to the telehealth list--to 
include factors such as the effects of barriers to in-person care and 
the safety, effectiveness, or medical benefit of the service furnished 
through telehealth, as potential refinements to our category 2 
criteria. We initially established these category 2 criteria in the 
interest of ensuring that the candidate services were safe, effective, 
medically beneficial, and still accurately described by the 
corresponding codes when delivered via telehealth, while also ensuring 
that beneficiaries furnished telehealth services receive high quality 
care that is comparable to in-person care. We believed that the 
demonstration of comparable clinical outcomes (diagnostic findings and/
or therapeutic interventions) from telehealth and in-person services 
would prove to be the best indicator that all of these conditions were 
met. While we continue to believe that safety, effectiveness, and 
medical benefit, as well as accurate description of the candidate 
telehealth services by the CPT or HCPCS codes, are necessary conditions 
for adding codes to the list of Medicare telehealth services, our 
recent experience in reviewing public requests for telehealth list 
additions and our discussions with stakeholders regarding contemporary 
medical practice and potential barriers to care, have led us to 
conclude that the comparability standard for category 2 requests should 
be modified.
    In our annual evaluation of category 2 requests since we adopted 
the process for evaluating additions to the telehealth list almost 10 
years ago, we have consistently observed that requestors have 
difficulty demonstrating that clinical outcomes of a service delivered 
via telehealth are comparable to the outcomes of the in-person service. 
The medical literature frequently does not include studies of the 
outcomes of many types of in-person services that allow for comparison 
to the outcomes demonstrated for candidate telehealth services. 
Furthermore, we know that in some cases the alternative to a telehealth 
service may be no service rather than an in-person service. The 
comparability standard may not sufficiently allow for the opportunity 
to add candidate services to the telehealth list that may be safe, 
effective, and medically beneficial when delivered via telehealth, 
especially to beneficiaries who experience significant barriers to in-
person care. While we continue to believe that beneficiaries receiving 
services through telehealth are deserving of high quality health care 
and that in-person care may be very important and potentially 
preferable for some services when in-person care is possible, we are 
concerned that we have not added any services to the telehealth list on 
a category 2 basis as a result of our reviews. While some candidate 
services appear to have the potential for clinical benefit when 
furnished through

[[Page 42827]]

telehealth, the requests have not met the comparability standard.
    Therefore, we are proposing to refine our category 2 review 
criteria for adding codes to the list of Medicare telehealth services 
beginning in CY 2013 by modifying the current requirement to 
demonstrate similar diagnostic findings or therapeutic interventions 
with respect to a candidate service delivered through telehealth 
compared to in-person delivery of the service (the comparability 
standard). We propose to establish a revised standard of demonstrated 
clinical benefit (the clinical benefit standard) when the service is 
furnished via telehealth. To support our review using this revised 
standard, we would ask requestors to specify in their request how the 
candidate telehealth service is still accurately described by the 
corresponding HCPCS or CPT code when delivered via telehealth as 
opposed to in-person.
    We are proposing that our refined criteria for category 2 additions 
would be as follows:
     Category 2: Services that are not similar to the current 
list of telehealth services. Our review of these requests would include 
an assessment of whether the service is accurately described by the 
corresponding code when delivered via telehealth and whether the use of 
a telecommunications system to deliver the service produces 
demonstrated clinical benefit to the patient. Requestors should submit 
evidence indicating that the use of a telecommunications system in 
delivering the candidate telehealth service produces clinical benefit 
to the patient.
    The evidence submitted should include both a description of 
relevant clinical studies that demonstrate the service furnished by 
telehealth to a Medicare beneficiary improves the diagnosis or 
treatment of an illness or injury or improves the functioning of a 
malformed body part, including dates and findings and a list and copies 
of published peer-reviewed articles relevant to the service when 
furnished via telehealth. Some examples of clinical benefit include the 
following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable symptom.
     Reduced recovery time.
    We believe the adoption of this clinical benefit standard for our 
review of candidate telehealth services on a category 2 basis is 
responsive to the requests of stakeholders that we broaden the factors 
taken into consideration to include barriers to care for beneficiaries. 
It allows us to consider the demonstrated clinical benefit of 
telehealth services for beneficiaries who might otherwise have no 
access to certain diagnostic or treatment services. Furthermore, we 
believe the focus on demonstrated clinical benefit in our review of 
category 2 requests for addition to the telehealth lists is equivalent 
to our standard for deleting services from the telehealth list that 
rests upon evidence that a service is not safe, not effective, or not 
medically beneficial. Finally, we believe the proposed clinical benefit 
standard for our review of candidate telehealth services on a category 
2 basis is fully consistent with our responsibility to ensure that 
telehealth services are safe, effective, medically beneficial, and 
still accurately described by the corresponding codes that would be 
used for the services when delivered in-person.
    We are soliciting public comments on this proposed refinement to 
our established process for adding codes to the telehealth list, 
including the information that requestors should furnish to facilitate 
our full review of requests in preparation for the next calendar year's 
rulemaking cycle. We will respond to comments on our proposal and 
finalize any changes to the process for addition codes to the 
telehealth list in the CY 2012 PFS final rule with comment period. We 
would use the revised category 2 review criteria to review requested 
additions to the telehealth list submitted during CY 2011 and under 
consideration for CY 2013.

E. Telehealth Consultations in Emergency Departments

    We have recently been asked to clarify instructions regarding 
appropriate reporting of telehealth services that, prior to our policy 
change regarding consultation codes, would have been reported as 
consultations furnished to patients in an emergency department. When we 
eliminated the use of all consultation codes beginning in CY 2010, we 
instructed practitioners, when furnishing a service that would have 
been reported as a consultation service, to report the E/M code that is 
most appropriate to the particular service for all office/outpatient or 
inpatient visits. Since section 1834(m) of the Act includes 
``professional consultations'' (including the initial inpatient 
consultation codes ``as subsequently modified by the Secretary'') in 
the definition of telehealth services, we established several HCPCS 
codes to describe the telehealth delivery of initial inpatient 
consultations. For inpatient hospital and skilled nursing facility care 
telehealth services, we instructed practitioners to use the inpatient 
telehealth consultation G-codes listed in table 14 to report those 
telehealth services (74 FR 61763, 61774). However, we neglected to 
account for the fact that E/M emergency department visit codes (99281-
99285) are not on the telehealth list. As such, there has not been a 
clear means for practitioners to bill a telehealth consultation 
furnished in an emergency department. In order to address this issue, 
we are proposing to change the code descriptors for the inpatient 
telehealth consultation G-codes to include emergency department 
telehealth consultations effective January 1, 2012. However, we are 
seeking public comment regarding other options, including creating G-
codes specific to these services when furnished to patients in the 
emergency department.

           Table 14--Inpatient Telehealth Consultation G-Codes
------------------------------------------------------------------------
       HCPCS Code                  CY 2011 Long code descriptor
------------------------------------------------------------------------
G0425                     Initial inpatient telehealth consultation,
                           typically 30 minutes communicating with the
                           patient via telehealth.
G0426                     Initial inpatient telehealth consultation,
                           typically 50 minutes communicating with the
                           patient via telehealth.
G0427                     Initial inpatient telehealth consultation,
                           typically 70 minutes or more communicating
                           with the patient via telehealth.
G0406                     Follow[dash]up inpatient telehealth
                           consultation, limited, physicians typically
                           spend 15 minutes communicating with the
                           patient via telehealth.

[[Page 42828]]

 
G0407                     Follow[dash]up inpatient telehealth
                           consultation, intermediate, physicians
                           typically spend 25 minutes communicating with
                           the patient via telehealth.
G0408                     Follow[dash]up inpatient telehealth
                           consultation, complex, physicians typically
                           spend 35 minutes or more communicating with
                           the patient via telehealth.
------------------------------------------------------------------------

IV. Other Provisions of the Proposed Regulation

A. Part B Drug Payment: Average Sales Price (ASP) Issues

    Section 1847A of the Act requires use of the average sales price 
(ASP) payment methodology for payment for drugs and biologicals 
described in section 1842(o)(1)(C) of the Act furnished on or after 
January 1, 2005. The ASP methodology applies to most drugs furnished 
incident to a physician's service, drugs furnished under the DME 
benefit, certain oral anti-cancer drugs, and oral immunosuppressive 
drugs.
1. Widely Available Market Price (WAMP)/Average Manufacturer Price 
(AMP)
    Section 1847A(d)(1) of the Act states that ``The Inspector General 
of HHS shall conduct studies, which may include surveys, to determine 
the widely available market prices (WAMP) of drugs and biologicals to 
which this section applies, as the Inspector General, in consultation 
with the Secretary, determines to be appropriate.'' Section 1847A 
(d)(2) of the Act states, ``Based upon such studies and other data for 
drugs and biologicals, the Inspector General shall compare the ASP 
under this section for drugs and biologicals with--
     The widely available market price (WAMP) for these drugs 
and biologicals, (if any); and
     The average manufacturer price (AMP) (as determined under 
section 1927(k) (1) of the Act) for such drugs and biologicals.''
    Section 1847A(d)(3)(A) of the Act states that, ``The Secretary may 
disregard the ASP for a drug or biological that exceeds the WAMP or the 
AMP for such drug or biological by the applicable threshold percentage 
(as defined in subparagraph (B)).'' Section 1847A(d)(3)(C) of the Act 
states that if the Inspector General (OIG) finds that the ASP for a 
drug or biological is found to have exceeded the WAMP or AMP by this 
threshold percentage, the OIG ``shall inform the Secretary (at such 
times as the Secretary may specify to carry out this subparagraph) and 
the Secretary shall, effective as of the next quarter, substitute for 
the amount of payment otherwise determined under this section for such 
drug or biological, the lesser of--
     the widely available market price for the drug or 
biological (if any); or
     103 percent of the average manufacturer price as 
determined under section 1927(k)(1) of the Act for the drug or 
biological.''
    The applicable threshold percentage is specified in section 
1847A(d)(3)(B)(i) of the Act as 5 percent for CY 2005. For CY 2006 and 
subsequent years, section 1847A(d)(3)(B)(ii) of the Act establishes 
that the applicable threshold percentage is ``the percentage applied 
under this subparagraph subject to such adjustment as the Secretary may 
specify for the WAMP or the AMP, or both.'' In the CY 2006 (70 FR 
70222), CY 2007 (71 FR69680), CY 2008 (72 FR 66258), CY 2009 (73 FR 
69752), and CY 2010 (74 FR 61904) PFS final rules with comment period, 
we specified an applicable threshold percentage of 5 percent for both 
the WAMP and AMP. We based this decision on the fact that data was too 
limited to support an adjustment to the current applicable threshold 
percentage.
    For CY 2011, we proposed to specify two separate adjustments to the 
applicable threshold percentages. When making comparisons to the WAMP, 
we proposed the applicable threshold percentage to remain at 5 percent. 
The applicable threshold percentage that we proposed for the AMP is 
addressed below in this section of the preamble. The latest WAMP 
comparison was published in 2008, and the OIG is continuing to perform 
studies comparing ASP to WAMP. Based on available OIG reports that have 
been published comparing WAMP to ASP, we did not have sufficient 
information at the time to determine that the 5 percent threshold 
percentage is inappropriate and should be changed. As a result, we 
believed that continuing the 5 percent applicable threshold percentage 
for the WAMP was appropriate for CY 2011. Therefore, we proposed to 
revise Sec.  414.904(d)(3) to specify the 5 percent WAMP threshold for 
CY 2011. After soliciting and reviewing comments, we finalized our 
proposal to continue the 5 percent WAMP threshold for CY 2011 (75 FR 
73469).
    For CY 2012, we again propose to specify a separate adjustment to 
the applicable threshold percentage for WAMP comparisons. When making 
comparisons to the WAMP, we propose the applicable threshold percentage 
to remain at 5 percent. We still do not have sufficient information to 
determine that the 5 percent threshold percentage is inappropriate and, 
as a result, we believe that continuing the 5 percent applicable 
threshold percentage for the WAMP is appropriate for CY 2012. As we 
noted in the CY 2011 PFS final rule with comment period (75 FR 73470), 
we understand that there are complicated operational issues associated 
with this policy. We continue to proceed cautiously in this area. We 
remain committed to providing stakeholders, including providers and 
manufacturers of drugs impacted by potential price substitutions with 
adequate notice of our intentions regarding such, including the 
opportunity to provide input with regard to the processes for 
substituting the WAMP for the ASP.
2. AMP Threshold and Price Substitutions
    As mentioned previously in section V.A.1. of this proposed rule, 
when making comparisons of ASP to AMP, the applicable threshold 
percentage for CY 2005 was specified in statute as 5 percent. Section 
1847A(d)(3) of the Act allows the Secretary to specify adjustments to 
this threshold percentage for years subsequent to 2005. For CY 2006 (70 
FR 70222), CY 2007 (71 FR 69680), CY 2008 (72 FR 66258), CY 2009 (73 FR 
69752), and CY 2010 (74 FR 61904), the Secretary made no adjustments to 
the threshold percentage; it remained at 5 percent.
    For CY 2011, we proposed, with respect to AMP substitution, to 
apply the applicable percentage subject to certain adjustments such 
that substitution of AMP for ASP will only be made when the ASP exceeds 
the AMP by 5 percent in two consecutive quarters immediately prior to 
the current pricing quarter, or three of the previous four quarters 
immediately prior to the current quarter. We further proposed to apply 
the applicable AMP

[[Page 42829]]

threshold percentage only for those situations where AMP and ASP 
comparisons are based on the same set of National Drug Codes (NDCs) for 
a billing code (that is, ``complete'' AMP data).
    Furthermore, we proposed a price substitution policy to substitute 
103 percent of AMP for 106 percent of ASP for both multiple and single 
source drugs and biologicals as defined respectively at section 
1847(A)(c)(6)(C) and (D) of the Act. Specifically, we proposed that 
this substitution:
     Would occur when the applicable threshold percentage has 
been met for two consecutive quarters immediately prior to the current 
pricing quarter, or three of the previous four quarters immediately 
prior to the current quarter.
     Would permit for a final comparison between the OIG's 
volume-weighted 103 percent of AMP for a billing code (calculated from 
the prior quarter's data) and the billing code's volume weighted 106 
percent ASP (as calculated by CMS for the current quarter) to avoid a 
situation in which the AMP-based price substitution would exceed that 
quarter's ASP; and
     That the duration of the price substitution would last for 
only one quarter.
    We also sought comment on other issues related to the comparison 
between ASP and AMP, such as the following:
     Any effect of definitional differences between AMP and 
ASP, particularly in light of the definition of AMP as revised by 
section 2503 of the Affordable Care Act.
     The impact of any differences in AMP and ASP reporting by 
manufacturers on price substitution comparisons.
     Whether and/or how general differences and similarities 
between AMP and manufacturer's ASP would affect comparisons between 
these two.
    In the CY 2011 PFS final rule with comment, we did not finalize our 
proposed adjustments to the 5 percent AMP threshold or our price 
substitution policy because of legislative changes, regulatory changes, 
and litigation that affected this issue. Specifically--
     A preliminary injunction issued by the United States 
District Court for the District of Columbia in National Association of 
Chain Drug Stores et al. v. Health and Human Services, Civil Action No. 
1:07-cv-02017 (RCL) was still in effect;
     We were continuing to expect to develop regulations to 
implement section 2503 of the Affordable Care Act, which amended the 
definition of AMP, and section 202 of the Federal Aviation 
Administration Air Transportation Modernization and Safety Improvement 
Act (Pub. L. 111-226) as enacted on August 10, 2010, which further 
amended section 1927(k) of the Act;
     We proposed to withdraw certain provisions of the AMP 
final rule published on July 17, 2007 (75 FR 54073).
    As a result, we finalized the portion of our proposal that sets the 
AMP threshold at 5 percent for CY 2011 and revised the regulation text 
accordingly (75 FR 73470).
    The preliminary injunction was vacated by the United States 
District Court for the District of Columbia on December 15, 2010. 
Currently, we continue to expect to develop regulations to implement 
section 2503 of the Affordable Care Act and section 202 of the Federal 
Aviation Administration Air Transportation Modernization and Safety 
Improvement Act. However, these statutory amendments became effective 
on October 1, 2010 without regard to whether or not final regulations 
to carry out such amendments have been promulgated by such date. 
Moreover, our Medicaid final rule published on November 15, 2010 
finalized regulations requiring manufacturers to calculate AMP in 
accordance with section 1927(k)(1) of the Act (75 FR 69591). Since 
statutory and regulatory provisions exist and are currently utilized by 
manufacturers for the calculation and submission of AMP data, we are 
revisiting the AMP threshold and price substitution issues.
a. AMP Threshold
    Section 1847A(d)(3) of the Act allows the Secretary to specify 
adjustments to this threshold percentage for years subsequent to 2005, 
and to specify the timing for any price substitution. Therefore, for CY 
2012, with respect to AMP substitution, we propose to apply the 
applicable percentage subject to certain adjustments. Specifically, a 
price substitution of AMP for ASP will be made only when the ASP 
exceeds the AMP by 5 percent in two consecutive quarters immediately 
prior to the current pricing quarter, or three of the previous four 
quarters immediately prior to the current quarter.
    In general, the ASP methodology reflects average market prices for 
Part B drugs for a quarter. The ASP is based on the average sales price 
to all purchasers for a calendar quarter; the AMP, in turn, represents 
the average price paid by wholesalers for drugs distributed to retail 
community pharmacies and by retail community pharmacies that purchase 
drugs directly from the manufacturers. Accordingly, while the ASP 
payment amount for a billing code may exceed its AMP for that billing 
code for any given quarter, this may reflect only a temporary 
fluctuation in market prices that would be corrected in a subsequent 
quarter. We believe this fluctuation is demonstrated by how few billing 
codes exceed the applicable threshold percentage over multiple 
quarters. For example, in the Inspector General's report ``Comparison 
of Average Sales Prices and Average Manufacturer Prices: An Overview of 
2009,'' only 11 of 493 examined billing codes exceeded the applicable 
threshold percentage over multiple quarters (OEI-03-10-00380). We are 
concerned that substitutions based on a single quarter's ASP to AMP 
comparison will not appropriately or accurately account for temporary 
fluctuations. We believe that applying this threshold percentage 
adjusted to reflect data from multiple quarters will account for 
continuing differences between ASP and AMP, and allow us to more 
accurately identify those drugs that consistently trigger the 
substitution threshold and thus warrant price substitution.
    We further propose to apply the applicable AMP threshold percentage 
only for those situations where AMP and ASP comparisons are based on 
the same set of NDCs for a billing code (that is, ``complete'' AMP 
data). Prior to 2008, the OIG calculated a volume-weighted AMP and made 
ASP and AMP comparisons only for billing codes with such ``complete'' 
AMP data. In such comparisons, a volume-weighted AMP for a billing code 
was calculated when NDC-level AMP data was available for the same NDCs 
used by us to calculate the volume-weighted ASP. Beginning in the first 
quarter of 2008, the OIG also began to make ASP and AMP comparisons 
based on ``partial'' AMP data (that is, AMP data for some, but not all, 
NDCs in a billing code). For these comparisons, the volume-weighted AMP 
for a billing code is calculated even when only such limited AMP data 
is available. That is, the volume-weighted AMP calculated by the 
Inspector General is based on fewer NDCs than the volume-weighted ASP 
calculated by CMS. Moreover, volume-weighted ASPs are not adjusted by 
the Inspector General to reflect the fewer number of NDCs in the 
volume-weighted AMP.
    Because the OIG's partial AMP data comparison did not reflect all 
the NDCs used in our volume-weighted ASP calculations, we discussed our 
concern about using the volume-weighted AMP in the CY 2011 PFS proposed 
rule. We believed that such AMP data may not

[[Page 42830]]

adequately account for market-related drug price changes and may lead 
to the substitution of incomplete and inaccurate volume-weighted 
prices. Payment amount reductions that result from potentially 
inaccurate substitutions may impact physician and beneficiary access to 
drugs. Therefore, consistent with our authority as set forth in section 
1847A(d)(1) and (3) of the Act, we proposed in the CY 2011 PFS proposed 
rule that the substitution of 103 percent of AMP for 106 percent of ASP 
should be limited to only those drugs with ASP and AMP comparisons 
based on the same set of NDCs.
    In response to our CY 2011 proposed rule, the OIG changed its 
methodology for ``partial'' AMP data comparisons beginning with its 
report titled ``Comparison of First-Quarter 2010 Average Sales Prices 
and Average Manufacturer Prices: Impact on Medicare Reimbursement for 
Third Quarter 2010.'' Specifically, in addition to calculating a 
volume-weighted AMP based on ``partial'' data and identifying billing 
codes that exceeded the price substitution threshold, the OIG began to 
replace each missing NDC-level AMP with corresponding NDC-level ASP 
data. The OIG then calculated a volume-weighted AMP for the billing 
code. If the volume-weighted AMP continued to exceed the price 
substitution threshold, the report attributed this to an actual 
difference between ASPs and AMPs in the marketplace (OEI-03-10-00440).
    We appreciate that the Inspector General has acknowledged the 
importance of protecting beneficiary and physician access in its 
methodology change. However, section 1847(A)(d)(2)(B) of the Act 
specifically indicates that the comparison be made to AMP as determined 
under section 1927(k)(1) of the Act. Moreover, we continue to be 
concerned that comparisons based on partial AMP data may not adequately 
account for market-related drug price changes and may lead to the 
substitution of incomplete and inaccurate volume-weighted prices. 
Therefore, for CY 2012, we propose to apply the applicable AMP 
threshold percentage only for those situations where AMP and ASP 
comparisons are based on the same set of NDCs for a billing code (that 
is, ``complete'' AMP data). Furthermore, we are proposing to revise 
Sec.  414.904(d)(3) to reflect corresponding regulatory text changes, 
and we welcome comments on all aspects of this proposal.
b. AMP Price Substitution
(1) Inspector General Studies
    Section 1847A(d) of the Act requires the Inspector General to 
conduct studies of the widely available market price for drugs and 
biologicals to which section 1847A of the Act applies. However, it does 
not specify the frequency of when such studies should be conducted. The 
Inspector General has conducted studies comparing AMP to ASP for 
essentially each quarter since the ASP system has been implemented. 
Since 2005, the OIG has published 23 reports pertaining to the price 
substitution issue (see Table 15), of which 21 have identified billing 
codes with volume-weighted ASPs that have exceeded their volume-
weighted AMPs by the applicable threshold percentage.

         Table 15--Published OIG Reports on Price Substitutions
------------------------------------------------------------------------
             Date                             Report title
------------------------------------------------------------------------
5/2011.......................  Comparison of Third-Quarter 2010 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for First Quarter 2011 (OEI-03-11-
                                00160).
4/2011.......................  Comparison of Average Sales Prices and
                                Average Manufacturer Prices: An overview
                                of 2009 (OEI-03-10-00380).
2/2011.......................  Comparison of Second-Quarter 2010 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Fourth Quarter 2010 (OEI-03-11-
                                00030).
11/2010......................  Comparison of First-Quarter 2010 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Third Quarter 2010 (OEI-03-10-
                                00440).
7/2010.......................  Comparison of Fourth-Quarter 2009 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Second Quarter 2010 (OEI-03-10-
                                00350).
4/2010.......................  Comparison of Third-Quarter 2009 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for First Quarter 2010 (OEI-03-10-
                                00150).
2/2010.......................  Comparison of Average Sales Prices and
                                Average Manufacturer Prices: An overview
                                of 2008 (OEI-03-09-00350).
1/2010.......................  Comparison of Second-Quarter 2009 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Fourth Quarter 2009 (OEI-03-09-
                                00640).
8/2009.......................  Comparison of First-Quarter 2009 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Third Quarter 2009 (OEI-03-09-
                                00490).
8/2009.......................  Comparison of Fourth-Quarter 2008 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Second Quarter 2009 (OEI-03-09-
                                00340).
4/2009.......................  Comparison of Third-Quarter 2008 Average
                                Sales Prices and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for first Quarter 2009 (OEI-03-09-
                                00150).
2/2009.......................  Comparison of Second-Quarter 2008 Average
                                Sales Prices and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Fourth Quarter 2008 (OEI-03-09-
                                00050).
12/2008......................  Comparison of First-Quarter 2008 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Third Quarter 2008 (OEI-03-08-
                                00530).
12/2008......................  Comparison of Average Sales Prices and
                                Average Manufacturer Prices: An Overview
                                of 2007 (OEI-03-08-00450).
8/2008.......................  Comparison of Fourth-Quarter 2007 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Second Quarter 2008 (OEI-03-08-
                                00340).
7/2008.......................  A comparison of average sales price to
                                widely available market prices for
                                inhalation drugs (OEI-03-07-00190).
5/2008.......................  Comparison of Third-Quarter 2007 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for First Quarter 2008 (OEI-03-08-
                                00130).
12/2007......................  Comparison of Second-Quarter 2007 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Fourth Quarter 2007 (OEI-03-08-
                                00010).
9/2007.......................  Comparison of First-Quarter 2007 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Third Quarter 2007 (OEI-03-07-
                                00530).
7/2007.......................  Comparison of Third-Quarter 2006 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for First Quarter 2007 (OEI-03-07-
                                00140).

[[Page 42831]]

 
7/2006.......................  Comparison of Fourth-Quarter 2005 Average
                                Sales Price and Average Manufacturer
                                Prices: Impact on Medicare Reimbursement
                                for Second Quarter 2006 (OEI-03-06-
                                00370).
6/2006.......................  A Comparison of Average Sales Price to
                                Widely Available Market Prices: Fourth
                                Quarter 2005 (OEI-03-05-00430).
4/2006.......................  Monitoring Medicare Part B Drug Prices: A
                                Comparison of Average Sales Price to
                                Average Manufacturer Prices (OEI-03-04-
                                00430).
------------------------------------------------------------------------

    In the latest quarterly report comparing AMP to ASP, titled 
``Comparison of Third-Quarter 2010 Average Sales Price and Average 
Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 
2011'' (OEI-03-11-00160), the Inspector General found that of 365 
billing codes with complete AMP data in the third quarter of 2010, only 
14 met the 5 percent threshold; that is, ASP exceeded AMP by at least 5 
percent. 8 of these 14 billing codes also exceeded the AMP by at least 
5 percent in one or more of the previous four quarters; only two drugs 
had ASPs that exceeded the 5 percent threshold in all four quarters 
under review. This Inspector General report further indicates that, 
``If reimbursement amounts for all 14 codes with complete AMP data had 
been based on 103 percent of the AMPs during the first quarter of 2011, 
we estimate that Medicare expenditures would have been reduced $10.3 
million in that quarter alone.'' The savings found by the Inspector 
General constitute potential savings for the Medicare program and 
beneficiaries.
(2) Proposal
    As discussed previously, section 1847A(d)(3) of the Act provides 
authority for us to determine the applicable percentage subject to 
``such adjustment as the Secretary may specify for the widely available 
market price or the average manufacturer price, or both.'' We also have 
authority to specify the timing of any ASP substitution. Consistent 
with this authority, we are proposing a policy to substitute 103 
percent of AMP for 106 percent of ASP where the applicable percentage 
threshold has been satisfied for the two consecutive quarters 
immediately prior to the current pricing quarter, or for three of the 
previous four quarters immediately prior to the current pricing 
quarter. This policy would apply to single source drugs and 
biologicals, multiple source drugs, and biosimilar biological products 
as defined at section 1847A(c)(6)(C), (D), and (H) of the Act.
    Because of the lack of data regarding WAMP to ASP comparisons, we 
are explicitly excluding WAMP from this price substitution proposal, 
though we are proposing to maintain the WAMP threshold at 5 percent for 
CY 2012 in section V.A.1. of this rule. We believe that the proposed 
policy reflects market-related pricing changes and focuses on those 
drugs that consistently exceed the applicable percentage threshold over 
multiple quarters. Unlike the OIG's AMP studies, the published WAMP 
studies do not show whether the prices for the examined groups of drugs 
consistently exceed the applicable percentage threshold across multiple 
quarters like the AMP studies. We will consider proposing a policy for 
the substitution of WAMP at a later date.
(3) Timeframe for and Duration of Price Substitutions
    As stated in Sec.  414.804(a)(5), a manufacturer's average sales 
price must be submitted to CMS within 30 days of the close of the 
quarter. We then calculate an ASP for each billing code in accordance 
with the process outlined at Sec.  414.904. Then, as described in our 
CY 2005 PFS final rule (69 FR 66300), we implement these new prices 
through program instructions or otherwise at the first opportunity 
after we receive the data, which is the calendar quarter after receipt.
    Section 1847A(d)(3)(C) of the Act indicates that a price 
substitution would be implemented ``effective as of the next quarter'' 
after the OIG has informed us that the ASP for a drug or biological 
exceeds its AMP by the applicable percentage threshold. The OIG does 
not receive new ASPs for a given quarter until after we have finalized 
our calculations for the quarter. Also, the results of the OIG's 
pricing comparisons are not available until after the ASPs for a given 
quarter have gone into effect. Therefore, we anticipate that there will 
be a three-quarter lag for substituted prices from the quarter in which 
manufacturer sales occurred, though this will depend in great part upon 
the timeframe in which we obtain comparison data from the OIG. Table 16 
provides an example of this timeframe.

                                 Table 16--Example Price Substitution Timeframe
----------------------------------------------------------------------------------------------------------------
                                    Q2-11               Q3-11                 Q4-11                 Q1-12
----------------------------------------------------------------------------------------------------------------
ASP Process..................  Manufacturer     Manufacturer submits  Q4-11 payment limits  Q1-12 payment limits
                                sells drug.      Q2-11 pricing data.   apply.                apply, including
                                                 CMS calculates ASP   CMS calculates ASP     any adjusted
                                                 payment limits for    payment limits for    payment limit
                                                 Q4-11 and publishes   Q1-12. Compares       resulting from the
                                                 Q4-11 payment         calculated payment    price substitution.
                                                 limits.               limits to OIG
                                                                       substitute prices.
                                                                       Publishes Q1-12
                                                                       prices that may
                                                                       include OIG
                                                                       substitute prices.
OIG Process..................  ...............  OIG receives Q4-11    OIG notifies CMS of
                                                 payment limits from   HCPCS for which Q4-
                                                 CMS and compares      11 ASP exceeds Q2-
                                                 them to Q2-11         11 AMP by the
                                                 volume-weighted AMP   applicable
                                                 data.                 percentage
                                                                       threshold.
----------------------------------------------------------------------------------------------------------------

    Given this lag in time, the ASP for a billing code may have 
decreased since the OIG's comparison. Therefore, consistent with our 
authorities in section 1847A(d)(3) of the Act and our desire to provide 
accurate payments consistent with these provisions, we believe that the 
timing of any substitution policy should permit a final

[[Page 42832]]

comparison between the OIG's volume-weighted 103 percent AMP for a 
billing code (calculated from the data from sales three quarters prior) 
and the billing code's volume-weighted 106 percent ASP (as calculated 
by CMS for the upcoming quarter). In Table 16, for example, this 
comparison would be done between the HCPCS payment limits calculated 
for Q1-12, and the OIG's volume-weighted AMPs from their examination of 
Q4-11 payment limits. This final comparison would assure the Secretary 
that the 106 percent ASP payment limit for the current pricing quarter 
continues to exceed 103 percent of the OIG's calculated AMP in order to 
avoid a situation in which the Secretary would inadvertently raise the 
Medicare payment limit through this price substitution policy. We 
specifically request comments on this proposal.
    ASP payment limits are calculated on a quarterly basis as per 
section 1847A(c)(5)(A) of the Act, and we are particularly mindful that 
the ASP-based payment allowance for a billing code may change from 
quarter to quarter. As such, we propose that any price substitution 
based on the comparison that triggered its application would last for 
one quarter. We note that in a subsequent quarter, the OIG may identify 
that a volume-weighted ASP continues to exceed the volume-weighted AMP 
for a billing code that previously triggered a price substitution. In 
this scenario, if the criteria for the price substitution policy are 
met, we would substitute 103 percent of the OIG's updated volume-
weighted AMP for that billing code.
    Overall, we believe that our proposal as previously outlined to 
substitute 103 percent of AMP for 106 percent of ASP provides us with a 
viable mechanism for generating savings for the Medicare program and 
its beneficiaries because it will allow Medicare to pay based on lower 
market prices for those drugs and biologicals that consistently exceed 
the applicable threshold percentage. Moreover, it will enable us to 
address a programmatic vulnerability identified by the OIG. We welcome 
comments on all aspects of our proposal.
    In the CY 2011 proposed rule, we sought comment on other issues 
related to the comparison between ASP and AMP, specifically:
     Any effect of definitional differences between AMP and 
ASP, particularly in light of the definition of AMP as revised by 
section 2503 of the Affordable Care Act.
     The impact of any differences in AMP and ASP reporting by 
manufacturers on price substitution comparisons.
     Whether and/or how general differences and similarities 
between AMP and manufacturer's ASP would affect comparisons between 
these two.
    For the CY 2012 proposed rule, we again seek comment on other 
matters pertaining to this issue.
3. ASP Reporting Update
a. ASP Reporting Template Update
    For purposes of this part, unless otherwise specified, the term 
``drugs'' will hereafter refer to both drugs and biologicals. Sections 
1847A and 1927(b) of the Act specify quarterly ASP data reporting 
requirements for manufacturers. Specific ASP reporting requirements are 
set forth in section 1927(b)(3) of the Act. For the purposes of 
reporting under section 1847A of the Act, the term ``manufacturer'' is 
defined in section 1927(k)(5) of the Act and means any entity engaged 
in the following: Production; preparation, propagation, compounding, 
conversion or processing of prescription drug products; either directly 
or indirectly by extraction from substances of natural origin, or 
independently by means of chemical synthesis, or by a combination of 
extraction and chemical synthesis; or packaging, repackaging, labeling, 
relabeling, or distribution of prescription drug products. The term 
manufacturer does not include a wholesale distributor of drugs or a 
retail pharmacy licensed under State law. However, manufacturers that 
also engage in certain wholesaler activities are required to report ASP 
data for those drugs that they manufacture. Note that the definition of 
manufacturers for the purposes of ASP data reporting includes 
repackagers.
    Section 1927(b)(3)(A)(iii) of the Act specifies that manufacturers 
must report their average sales price and the number of units by NDC. 
As established by 42 CFR part 414 subpart J, manufacturers are required 
to report data at the NDC level, which includes the following elements: 
(1) The manufacturer ASP; (2) the Wholesale Acquisition Cost (WAC) in 
effect on the last day of the reporting period; (3) the number of units 
sold; and (4) the NDC. The reported ASP data are used to establish the 
Medicare payment amounts.
    Section 1927(b)(3)(A)(iii)(II) of the Act specifies that the 
manufacturer must report the WAC, if it is required in order for 
payment to be made under section 1847A of the Act. In the 2004 IFC that 
implemented the ASP reporting requirements for Medicare Part B drugs 
and biologicals (66 FR 17935), we specified that manufacturers must 
report the ASP data to CMS using our Addendum A template. In 2005, we 
expanded the template to include WAC and additional product description 
details (70 FR 70221). We also initiated additional changes to the 
template in 2008 (73 FR 76032).
    In order to facilitate more accurate and consistent ASP data 
reporting from manufacturers, we are now proposing additional revisions 
to the Addendum A template. Specifically, we propose to revise existing 
reporting fields and add new fields to the Addendum A template, as 
follows:
     To split the current NDC column into three separate 
reporting fields, corresponding to the three segments of an NDC.
     To add a new field to collect an Alternate ID for products 
without an NDC.
     To expand the current FDA approval number column to 
account for multiple entries and supplemental numbers.
    We have also added a macro to the Addendum A template that will 
allow manufacturers to validate the format of their data prior to 
submission. This will help verify that data are complete and submitted 
to CMS in the correct format, thereby minimizing time and resources 
spent on identifying mistakes or errors. We note that the use of this 
macro does not preclude or supersede manufacturers' responsibility to 
provide accurate and timely ASP data in accordance with the reporting 
obligation under section 1927(b)(3) of the Act. We also note that 
manufacturers who misrepresent or fail to report manufacturer ASP data 
will remain subject to civil monetary penalties, as applicable and 
described in sections 1847A and 1927(b) of the Act and codified in 
regulations at Sec.  414.806.
b. Reporting of ASP Units and Sales Volume for Certain Products
    As required by 42 CFR part 414 subpart J, manufacturers report ASP 
price and volume data at the NDC level. This is appropriate for most 
drug and biological products because an NDC is usually associated with 
a consistent amount of product that is being sold. Our experience with 
manufacturer reporting of ASPs has revealed that a limited number of 
drug products, as defined by an NDC, might contain a variable amount of 
active ingredient. This situation is common for plasma derived clotting 
factors; for example, we are aware of one product where a vial 
described as nominally containing 250 international units (IUs) of 
clotting factor activity might actually contain

[[Page 42833]]

between 220 and 400 IUs. Although the exact factor activity is 
specified on the label, the amount of IUs contained in an NDC might 
vary between manufacturing lots. For these types of products, it is 
possible that vials with the same NDC but different amounts of clotting 
factor activity (as measured in IUs) might be sold during the same ASP 
reporting period. For drugs paid under Medicare Part B, such 
variability in the amount of drug product within an NDC appears to 
apply mostly to clotting factors that are prepared from plasma sources; 
it also applies to a few other products, including a plasma protein 
product used to treat antitrypsin deficiency.
    As stated in the Section 1847A(b)(2) of the Act, for years after 
2004, the Secretary has the authority to ``establish the unit for a 
manufacturer to report and methods for counting units as the Secretary 
determines appropriate to implement.'' There are limited situations 
when ASP price and volume reporting by product NDC may affect the 
accuracy of subsequent pricing calculations done by us, for example, 
when an NDC is associated with a variable amount of drug product as 
described in the paragraph previously. We believe that in such cases it 
is appropriate to amend the definition of the ASP unit associated with 
the NDC that is reported to us by manufacturers for the purposes of 
calculating ASP. Under the authority in the section 1847A(b)(2) of the 
Act, we propose that we will maintain a list of HCPCS codes for which 
manufacturers report ASPs for NDCs on the basis of a specified unit. 
The specified unit will account for situations where labeling indicates 
that the amount of drug product represented by an NDC varies. Our 
initial list appears in Table 17 and is limited to items with variable 
amounts of drug product per NDC as described previously. However, we 
propose to update this list as appropriate through program instruction 
or otherwise because we believe that the ability to make changes in a 
subregulatory manner will provide us with the flexibility to quickly 
and appropriately react to sales and marketing practices for specific 
drug products, including the introduction of new drugs or drug 
products. We plan to amend the list as necessary and to keep updates on 
the CMS ASP Web site at: http://www.cms.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. Our proposals would be effective for ASP reports 
received on or after January 1, 2012 and would be reflected in our 
April 1, 2012 quarterly update.
    In conjunction with the proposals in the preceding paragraph and 
the expectation that nearly all ASP price and sales volume reporting 
will continue to be at the NDC level (that is, the reported ASP sales 
and volume will be associated with a non-variable amount that is 
represented by the NDC), we are also proposing a clarification to 
existing regulation text at Sec.  414.802. Current regulation text 
states that ``Unit means the product represented by the 11-digit 
National Drug Code.'' We propose to update the definition to account 
for situations when an alternative unit of reporting must be used; the 
definition of the term unit will continue to be based on reporting of 
ASP data per NDC unless otherwise specified by CMS to account for 
situations where the amount of drug product represented by an NDC 
varies.

    Table 17--HCPCS Codes for Which ASP Reporting Is Done in Units of
                        Measure Other Than an NDC
------------------------------------------------------------------------
                                                            Proposed
           2011 Code             2011 Long descriptor   reporting  unit
------------------------------------------------------------------------
J0256.........................  INJECTION, ALPHA 1--   1MG
                                 PROTEINASE
                                 INHIBITOR--HUMAN, 10
                                 MG.
J1680.........................  INJECTION, HUMAN       1MG
                                 FIBRINOGEN
                                 CONCENTRATE, 100 MG.
J7184.........................  INJECTION, VON         1 IU VWF:RCO
                                 WILLEBRAND FACTOR
                                 COMPLEX (HUMAN),
                                 WILATE, PER 100 IU
                                 VWF:RCO.
J7185.........................  INJECTION, FACTOR      1 IU
                                 VIII (ANTIHEMOPHILIC
                                 FACTOR, RECOMBINANT)
                                 (XYNTHA), PER I.U.
J7186.........................  INJECTION,             1 IU
                                 ANTIHEMOPHILIC
                                 FACTOR VIII/VON
                                 WILLEBRAND FACTOR
                                 COMPLEX (HUMAN), PER
                                 FACTOR VIII I.U.
J7187.........................  INJECTION, VON         1 IU VWF:RCO
                                 WILLEBRAND FACTOR
                                 COMPLEX (HUMATE-P),
                                 PER IU VWF:RCO.
J7190.........................  FACTOR VIII            1 IU
                                 (ANTIHEMOPHILIC
                                 FACTOR, HUMAN) PER
                                 I.U.
J7192.........................  FACTOR VIII            1 IU
                                 (ANTIHEMOPHILIC
                                 FACTOR, RECOMBINANT)
                                 PER I.U., NOT
                                 OTHERWISE SPECIFIED.
J7193.........................  FACTOR IX              1 IU
                                 (ANTIHEMOPHILIC
                                 FACTOR, PURIFIED,
                                 NON-RECOMBINANT) PER
                                 I.U.
J7194.........................  FACTOR IX, COMPLEX,    1 IU
                                 PER I.U.
J7195.........................  FACTOR IX              1 IU
                                 (ANTIHEMOPHILIC
                                 FACTOR, RECOMBINANT)
                                 PER I.U.
J7197.........................  ANTITHROMBIN III       1 IU
                                 (HUMAN), PER I.U.
J7198.........................  ANTI-INHIBITOR, PER    1 IU
                                 I.U. INJECTION,
                                 ANTITHROMBIN
                                 RECOMBINANT, 50 I.U.
------------------------------------------------------------------------

    The instructions for reporting products with variable amounts of 
drug product, along with general instructions on completing the revised 
ASP Data Form (Addendum A), will be delineated in a User Guide that 
will be available on the ASP Web site. In the user guide, we will also 
be revising our instructions for the reporting of dermal grafting 
products as follows:
     If an NDC is not associated with a dermal grafting 
product, manufacturers should enter the UPC or other unique identifier 
(such as an internal product number) in the alternate ID column.
     Manufacturers should report ASP prices and sales volumes 
for dermal grafting products in units of area by square centimeter. The 
User Guide will be available on the CMS ASP Web site at: http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01_overview.asp. The Web 
site will also contain the revised ASP Data Form (Addendum A) and 
examples of how ASP data must be reported and formatted for submission.
    We would also like to remind manufacturers that additional 
information about reporting ASP data to us is available (for examples, 
see the following: (69 FR 17936), (69 FR 66299), (70 FR 70215), (71 FR 
69665), (72 FR 66256), (73 FR 69751), and (74 FR 61904)). Also, a link 
to the ASP Frequently Asked Questions (FAQs) is posted in the ``Related 
Links Inside CMS'' section of the ASP Overview Web page. We welcome 
comments on the ASP reporting proposals that are described in this 
section.

[[Page 42834]]

B. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration

    Section 651 of MMA requires the Secretary to conduct a 
demonstration for up to 2 years to evaluate the feasibility and 
advisability of expanding coverage for chiropractic services under 
Medicare. Current Medicare coverage for chiropractic services is 
limited to manual manipulation of the spine to correct a subluxation 
described in section 1861(r)(5) of the Act. The demonstration expanded 
Medicare coverage to include: ``(A) care for neuromusculoskeletal 
conditions typical among eligible beneficiaries; and (B) diagnostic and 
other services that a chiropractor is legally authorized to perform by 
the State or jurisdiction in which such treatment is provided'' and was 
conducted in four geographically diverse sites, two rural and two urban 
regions, with each type including a Health Professional Shortage Area 
(HPSA). The two urban sites were 26 counties in Illinois and Scott 
County, Iowa, and 17 counties in Virginia. The two rural sites were the 
States of Maine and New Mexico. The demonstration, which ended on March 
31, 2007, was required to be budget neutral as section 651(f)(1)(B) of 
MMA mandates the Secretary to ensure that ``the aggregate payments made 
by the Secretary under the Medicare program do not exceed the amount 
which the Secretary would have paid under the Medicare program if the 
demonstration projects under this section were not implemented.''
    In the CY 2006, 2007, and 2008 PFS final rules with comment period 
(70 FR 70266, 71 FR 69707, 72 FR 66325, respectively), we included a 
discussion of the strategy that would be used to assess budget 
neutrality (BN) and the method for adjusting chiropractor fees in the 
event the demonstration resulted in costs higher than those that would 
occur in the absence of the demonstration. We stated BN would be 
assessed by determining the change in costs based on a pre-post 
comparison of total Medicare costs for beneficiaries in the 
demonstration and their counterparts in the control groups and the rate 
of change for specific diagnoses that are treated by chiropractors and 
physicians in the demonstration sites and control sites. We also stated 
that our analysis would not be limited to only review of chiropractor 
claims because the costs of the expanded chiropractor services may have 
an impact on other Medicare costs for other services.
    In the CY 2010 PFS final rule with comment period (74 FR 61926), we 
discussed the evaluation of this demonstration conducted by Brandeis 
University and the two sets of analyses used to evaluate budget 
neutrality. In the ``All Neuromusculoskeletal Analysis,'' which 
compared the total Medicare costs of all beneficiaries who received 
services for a neuromusculoskeletal condition in the demonstration 
areas with those of beneficiaries with similar characteristics from 
similar geographic areas that did not participate in the demonstration, 
the total effect of the demonstration to Medicare was an $114 million 
increase in costs. In the ``Chiropractic User Analysis,'' which 
compared the Medicare costs of beneficiaries who used expanded 
chiropractic services to treat a neuromusculoskeletal condition in the 
demonstration areas, with those of beneficiaries with similar 
characteristics who used chiropractic services as was currently covered 
by Medicare to treat a neuromusculoskeletal condition from similar 
geographic areas that did not participate in the demonstration, the 
total effect of the demonstration to Medicare was a $50 million 
increase in costs.
    As explained in the CY 2010 PFS final rule, we based the BN 
estimate on the ``Chiropractic User Analysis'' because of its focus on 
users of chiropractic services rather than all Medicare beneficiaries 
with neuromusculoskeletal conditions, including those who did not use 
chiropractic services and who may not have become users of chiropractic 
services even with expanded coverage for them (74 FR 61926 through 
61927). Users of chiropractic services are most likely to have been 
affected by the expanded coverage provided by this demonstration. Cost 
increases and offsets, such as reductions in hospitalizations or other 
types of ambulatory care, are more likely to be observed in this group.
    As explained in the CY 2010 PFS final rule (74 FR 61927), because 
the costs of this demonstration were higher than expected and we did 
not anticipate a reduction to the PFS of greater than 2 percent per 
year, we finalized a policy to recoup $50 million in expenditures from 
this demonstration over a 5-year period, from CYs 2010 through 2014 (74 
FR 61927). Specifically, we are recouping $10 million for each such 
year through adjustments to the chiropractic CPT codes. Payment under 
the PFS for these codes will be reduced by approximately 2 percent. We 
believe that spreading this adjustment over a longer period of time 
will minimize its potential negative impact on chiropractic practices.
    We are continuing the implementation of the required budget 
neutrality adjustment by recouping $10 million in CY 2012. Our Office 
of the Actuary estimates chiropractic expenditures in CY 2012 to be 
approximately $470 million based on actual Medicare spending for 
chiropractic services for the most recent available year. To recoup $10 
million in CY 2012, the payment amount under the PFS for the 
chiropractic CPT codes (that is, CPT codes 98940, 98941, and 98942) 
will be reduced by approximately 2 percent. We are reflecting this 
reduction only in the payment files used by the Medicare contractors to 
process Medicare claims rather than through adjusting the relative 
value units (RVUs). Avoiding an adjustment to the RVUs would preserve 
the integrity of the PFS, particularly since many private payers also 
base payment on the RVUs.

C. Proposed Productivity Adjustment for the Ambulatory Surgical Center 
Payment System, and the Ambulance, Clinical Laboratory and DMEPOS Fee 
Schedules

    Section 3401 of the Affordable Care Act requires that the update 
factor under certain payment systems be annually adjusted by changes in 
economy-wide productivity. The year that the productivity adjustment is 
effective varies by payment system. Specifically, section 3401 of the 
Affordable Care Act requires that in CY 2011 (and in subsequent years) 
update factors under the ambulatory surgical center (ASC) payment 
system, the ambulance fee schedule (AFS), the clinical laboratory fee 
schedule (CLFS) and the DMEPOS fee schedule be adjusted by changes in 
economy-wide productivity. Section 3401(a) of the Affordable Care Act 
amends section 1886(b)(3)(B) of the Act to add clause (xi)(II) which 
sets forth the definition of this productivity adjustment. The statute 
defines the productivity adjustment to be equal to the 10-year moving 
average of changes in annual economy-wide private nonfarm business 
multifactor productivity (MFP) (as projected by the Secretary for the 
10-year period ending with the applicable fiscal year, year, cost 
reporting period, or other annual period). Historical published data on 
the measure of MFP is available on the Bureau of Labor Statistics' 
(BLS) Web site at http://www.bls.gov/mfp.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73394), the projection of MFP is currently produced by IHS Global 
Insight, Inc. (IGI). The methodology for calculating MFP for the ASC 
payment system, and the Ambulance, CLFS, and DMEPOS fee schedules was 
finalized in

[[Page 42835]]

the CY 2011 PFS final rule with comment period (75 FR 73394 through 
73399). As described in the CY 2011 PFS final rule with comment period, 
IGI replicates the MFP measure calculated by the BLS using a series of 
proxy variables derived from the IGI U.S. macro-economic models. For CY 
2012, we are proposing to revise the IGI series used to proxy the labor 
index used in the MFP forecast calculation from man-hours in private 
nonfarm establishments (billions of hours--annual rate) to hours of all 
persons in private nonfarm establishments, (2005 = 100.00), adjusted 
for labor composition effects. We are proposing this revision after 
further analysis showed that the proposed series is a more suitable 
proxy for the BLS Private nonfarm business sector labor input series 
since it accounts for the changes in skill-mix of the workforce over 
time (referred to above as labor composition effects). The BLS labor 
input series includes labor composition effects. We are proposing no 
additional changes to the IGI MFP forecast methodology or its 
application to the CPI-U update factors for the ASC payment system, and 
the Ambulance, CLFS, and DMEPOS fee schedules.

D. Section 105: Extension of Payment for Technical Component of Certain 
Physician Pathology Services

1. Background and Statutory Authority
    Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554), as 
amended by section 732 of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) (Pub. L. 108-173), section 104 of 
division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) 
(Pub. L. 109-432), section 104 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (MMSEA) (Pub. L. 110-173), section 136 of the 
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) 
(Pub. L. 110-275) and section 3104 of the Affordable Care Act (Pub. L. 
111-148), is amended by section 105 of the Medicare and Medicaid 
Extenders Act of 2010 (MMEA) (Pub. L. 111-309) to continue payment to 
independent laboratories for the TC of physician pathology services for 
fee-for-service Medicare beneficiaries who are inpatients or 
outpatients of a covered hospital through CY 2011. The technical 
component (TC) of physician pathology services refers to the 
preparation of the slide involving tissue or cells that a pathologist 
interprets. The professional component (PC) of physician pathology 
services refers to the pathologist's interpretation of the slide.
    When the hospital pathologist furnishes the PC service for a 
hospital patient, the PC service is separately billable by the 
pathologist. When an independent laboratory's pathologist furnishes the 
PC service, the PC service is usually billed with the TC service as a 
combined service.
    Historically, any independent laboratory could bill the Medicare 
contractor under the PFS for the TC of physician pathology services for 
hospital patients even though the payment for the costs of furnishing 
the pathology service (but not its interpretation) was already included 
in the bundled inpatient stay payment to the hospital. In the CY 2000 
PFS final rule with comment period (64 FR 59408 through 59409), we 
stated that this policy has contributed to the Medicare program paying 
twice for the TC service: (1) To the hospital, through the inpatient 
prospective payment rate, when the patient is an inpatient; and (2) to 
the independent laboratory that bills the Medicare contractor, instead 
of the hospital, for the TC service. While the policy also permits the 
independent laboratory to bill for the TC of physician pathology 
services for hospital outpatients, in this case, there generally would 
not be duplicate payment because we would expect the hospital to not 
also bill for the pathology service, which would be paid separately to 
the hospital only if the hospital were to specifically bill for it. We 
further indicated that we would implement a policy to pay only the 
hospital for the TC of physician pathology services furnished to its 
inpatients.
    Therefore, in the CY 2000 PFS final rule with comment period, we 
revised Sec.  415.130(c) to state that for physician pathology services 
furnished on or after January 1, 2001 by an independent laboratory, 
payment is made only to the hospital for the TC of physician pathology 
services furnished to a hospital inpatient. Ordinarily, the provisions 
in the PFS final rule with comment period are implemented in the 
following year. However, the change to Sec.  415.130 was delayed 1 year 
(until January 1, 2001), at the request of the industry, to allow 
independent laboratories and hospitals sufficient time to negotiate 
arrangements.
    Full implementation of Sec.  415.130 was further delayed by section 
542 of BIPA and section 732 of the MMA, which directed us to continue 
payment to independent laboratories for the TC of physician pathology 
services for hospital patients for a 2-year period beginning on January 
1, 2001 and for CYs 2005 and 2006, respectively. In the CY 2007 PFS 
final rule with comment period (71 FR 69788), we amended Sec.  415.130 
to provide that, for services furnished after December 31, 2006, an 
independent laboratory may not bill the carrier for the TC of physician 
pathology services furnished to a hospital inpatient or outpatient. 
However, section 104 of the MIEA-TRHCA continued payment to independent 
laboratories for the TC of physician pathology services for hospital 
patients through CY 2007, and section 104 of the MMSEA further extended 
such payment through the first 6 months of CY 2008.
    Section 136 of the MIPPA extended the payment through CY 2009. 
Section 3104 of the Affordable Care Act amended the prior legislation 
to extend the payment through CY 2010. Subsequent to publication of the 
CY 2011 PFS final rule with comment period, section 105 of the MMEA 
extended the payment through CY 2011.
2. Proposed Revisions to Payment for TC of Certain Physician Pathology 
Services
    Consistent with this statutory change, we are proposing to revise 
Sec.  415.130(d) to specify that for services furnished after December 
31, 2011, an independent laboratory may not bill the Medicare 
contractor for the TC of physician pathology services furnished to a 
hospital inpatient or outpatient. We would implement this provision 
effective for TC services furnished on or after January 1, 2012.

E. Section 4103 of the Affordable Care Act: Medicare Coverage and 
Payment of the Annual Wellness Visit Providing a Personalized 
Prevention Plan Covered Under Medicare Part B

1. Incorporation of a Health Risk Assessment as Part of the Annual 
Wellness Visit
a. Background and Statutory Authority--Medicare Part B Coverage of an 
Annual Wellness Visit Providing Personalized Prevention Plan Services
    Preventive care and beneficiary wellness are important to the 
Medicare program and have become an increasing focus. In section 4103 
of the Affordable Care Act, the Congress expanded Medicare coverage 
under Part B to include an annual wellness visit providing personalized 
prevention plan services (hereinafter referred to as the annual 
wellness visit or AWV). The AWV is described more fully in section 
1861(hhh) of the Act, and coverage was effective for services furnished 
on or after January 1, 2011. Regulations for Medicare coverage of the 
AWV are

[[Page 42836]]

established at 42 CFR 410.15. The AWV may be performed by a physician, 
nonphysician practitioner (physician assistant, nurse practitioner, or 
clinical nurse specialist), or a medical professional (including a 
health educator, a registered dietitian, or a nutrition professional, 
or other licensed practitioner) or a team of such medical 
professionals, working under the direct supervision of a physician. In 
summary, for CY 2011, the first AWV includes--
     Establishment of an individual's medical and family 
history;
     Establishment of a list of current medical providers and 
suppliers involved in providing medical care to the individual;
     Measurement of an individual's height, weight, body mass 
index (or waist circumference, if appropriate), blood pressure, and 
other routine measurements as deemed appropriate, based on the 
beneficiary's medical and family history;
     Detection of any cognitive impairment that the individual 
may have;
     Review of the individual's potential (risk factors) for 
depression;
     Review of the individual's functional ability and level of 
safety;
     Establishment of a written screening schedule for the 
individual such as a checklist for the next 5 to 10 years, as 
appropriate, based on recommendations of the United States Preventive 
Services Task Force, the Advisory Committee on Immunization Practices, 
and the individual's health status, screening history, and age-
appropriate preventive services covered by Medicare;
     Establishment of a list of risk factors for which primary, 
secondary or tertiary interventions are recommended or underway for the 
individual, including any mental health conditions or any such risk 
factors or conditions that have been identified through an initial 
preventive physical examination, and a list of treatment options and 
their associated risks and benefits;
     Furnishing of personalized health advice to the individual 
and a referral, as appropriate, to health education or preventive 
counseling services or programs aimed at reducing identified risk 
factors and improving self management; and
     Any other element determined appropriate through the 
national coverage determination process (NCD).
    In summary, for CY 2011, subsequent AWVs include--
     An update of the individual's medical and family history;
     An update of the list of current providers and suppliers 
that are regularly involved in providing medical care to the 
individual;
     Measurement of an individual's weight (or waist 
circumference), blood pressure and other routine measurements as deemed 
appropriate, based on the individual's medical and family history;
     Detection of any cognitive impairment that the individual 
may have;
     An update to the written screening schedule for the 
individual;
     An update to the list of risk factors and conditions for 
which primary, secondary, or tertiary interventions are recommended or 
are underway for the individual;
     Furnishing of personalized health advice to the individual 
and a referral, as appropriate, to health education or preventive 
counseling services;
     Any other element determined appropriate through the NCD 
process.
    The AWV is specifically designed as a wellness visit that focuses 
on identification of certain risk factors, personalized health advice, 
and referral for additional preventive services and lifestyle 
interventions (which may or may not be covered by Medicare). The 
elements included in the AWV differ from comprehensive physical 
examination protocols with which some providers may be familiar with 
since it is a visit that is specifically designed to provide 
personalized prevention plan services as defined in the Act.
    Section 1861(hhh)(1)(A) of the Act specifies that a personalized 
prevention plan for an individual includes a health risk assessment 
(HRA) that meets the guidelines established by the Secretary. In 
general, an HRA is an evaluation tool designed to provide a systematic 
approach to obtaining accurate information about the patient's health 
status, injury risks, modifiable risk factors, and urgent health needs. 
This evaluation tool is completed prior to, or as part of, an AWV. The 
information from the HRA is reflected in the personalized prevention 
plan that is created for the individual.
    Although the AWV was effective on January 1, 2011, section 4103 of 
the Affordable Care Act provided the Secretary additional time to 
establish guidelines for HRAs after consulting with relevant groups and 
entities (see section 1861 (hhh)(4)(A) of the Act). A technology 
assessment from the Agency for Healthcare Research and Quality (AHRQ) 
was commissioned to describe key features of HRAs, to examine which 
features were associated with successful HRAs, and to discuss the 
applicability of HRAs to the Medicare population. A draft of the 
technology assessment dated January 19, 2011 is publically available on 
the CMS Web site at http://www.cms.gov/determinationprocess/downloads/id79ta.pdf.
    We collaborated with the Centers for Disease Control and Prevention 
(CDC), due to their in-depth knowledge of HRAs, and because the CDC was 
directed by section 4004(f) of the Affordable Care Act to develop 
guidelines for a personalized prevention plan tool. In the November 16, 
2010 Federal Register (75 FR 70009), CDC issued a notice to solicit 
feedback regarding HRA guidance development. Public comments were 
received from numerous relevant groups and entities including: The 
American Academy of Family Physicians; the American Dietetic 
Association; the American Geriatrics Society; the American College of 
Cardiology; Care Continuum Alliance, physician practices; public health 
agencies; healthcare research groups; and the general public.
    The CDC convened a public meeting in Atlanta, Georgia in February 
2011 to facilitate the development of guidance for HRAs. (See the 
December 30, 2010 Federal Register (75 FR 82400)--announcement for 
``Development of Health Risk Assessment Guidance, Public Forum''). This 
meeting allowed broad public input from stakeholders and the general 
public into the development of guidelines for evidence-based HRAs. The 
Interim Guidance for Health Risk Assessments developed by the CDC is 
available on the CMS Web site at http://www.cms.gov/coveragegeninfo/downloads/healthriskassessmentsCDCfinal.pdf. The CDC guidance resulted 
from a review and compilation of the current scientific evidence, the 
technology assessment, expert advice from those working in the field of 
HRA and wellness, and takes into account public feedback from the 
request for information and the public meeting. The CDC guidance 
includes questions and topics to be addressed as deemed appropriate for 
the beneficiary's age. Additional information regarding the CDC 
guidance development process is included as part of the guidance 
document. The CDC plans to publish ``A Framework for Patient-Centered 
Health Assessments, a Morbidity and Mortality Weekly Report (MMWR).'' 
The MMWR will include additional information applicable for the 
successful implementation of the HRA, such as the CDC interim guidance 
document, as well as information related to implementation, feedback, 
and follow-up that evidence suggests is critical for improving health 
outcomes using this process. We are interested in receiving feedback 
regarding the availability of

[[Page 42837]]

HRAs that are available for use by the general public.
b. Implementation
    Consistent with section 1861(hhh) of the Act and the initial CDC 
guidance document, we propose to amend 42 CFR 410.15 by: (1) Adding the 
term ``health risk assessment'' and its definition; (2) revising the 
definitions of ``first annual wellness visit providing personalized 
prevention plan services'' and ``subsequent annual wellness visit 
providing personalized prevention plan services;'' and (3) 
incorporating the use and results of an HRA into the provision of 
personalized prevention plan services during the AWV. We believe that 
incorporation of the HRA supports a systematic approach to patient 
wellness and is integral to providing personalized prevention plan 
services. The results of the HRA will provide the foundation for and 
facilitate development of the personalized prevention plan. We believe 
that the results of the HRA will aid in developing the personalized 
prevention plan and, once fully implemented, will increase the 
efficiency of the physician's effort during the AWV.
(1) Definition of a ``Health Risk Assessment''
    We propose to revise Sec.  410.15 by adding the term ``health risk 
assessment'' and defining such term as an evaluation tool that meets 
the following requirements:
     Collects self-reported information about the beneficiary.
     Can be administered independently by the beneficiary or 
administered by a health professional prior to or as part of the AWV 
encounter.
     Is appropriately tailored to and takes into account the 
communication needs of underserved populations, persons with limited 
English proficiency, and persons with health literacy needs,
     Takes no more than 20 minutes to complete.
     Addresses, at a minimum, the following topics:
    ++ Demographic data, including but not limited to age, gender, 
race, and ethnicity.
    ++ Self assessment of health status, frailty, and physical 
functioning.
    ++ Psychosocial risks, including but not limited to depression/life 
satisfaction, stress, anger, loneliness/social isolation, pain, or 
fatigue.
    ++ Behavioral risks, including but not limited to tobacco use, 
physical activity, nutrition and oral health, alcohol consumption, 
sexual practices, motor vehicle safety (seat belt use), and home 
safety.
    ++ Activities of daily living (ADLs), including but not limited to 
dressing, feeding, toileting, grooming, physical ambulation (including 
balance/risk of falls), and bathing.
    ++ Instrumental activities of daily living (IADLs), including but 
not limited to shopping, food preparation, using the telephone, 
housekeeping, laundry, mode of transportation, responsibility for own 
medications, and ability to handle finances.
    The CDC guidance describes an HRA as ``a collection of health-
related data a medical provider can use to evaluate the health status 
and the health risk of an individual. An HRA will identify health 
behaviors and risk factors known only to the patient (such as, smoking, 
physical activity and nutritional habits) for which the medical 
provider can provide tailored feedback in an approach to reduce the 
risk factors'' as well as the potential for diseases for which those 
risk factors are related.
    The CDC guidance further explains that the ``questions/topics to be 
addressed in the HRA is a compilation of the current scientific 
evidence and are intended for Medicare beneficiaries as appropriate for 
their age.'' These include collection of demographic data; self 
assessment of health status, frailty, and physical functioning; 
biometric assessments obtained by the provider; psychosocial risks; and 
behavioral risks. The guidance document suggests, based on current 
evidence that the following domains specific to the greater than or 
equal to a 65-year-old Medicare population be included in the HRA: 
Memory, activities of daily living, and instrumental activities of 
daily living.
    With regard to memory, the CDC guidance states ``that cognition 
assessment is not part of the HRA itself, but rather an additional 
aspect of the AWV * * *''. We note that the definitions of both the 
first and subsequent annual wellness visit include the detection of any 
cognitive impairment. The CDC guidance, consistent with section 
1861(hhh)(4)(A) of the Act, specifies that an HRA should be made 
available to all Medicare beneficiaries who are eligible to receive an 
AWV, as defined in Sec.  410.15; can be furnished in a number of ways, 
including during an encounter with a health professional or through an 
interactive telephonic or web-based program, while ensuring the privacy 
of the beneficiary; be provided in a patient's preferred language; and 
take no longer than 20 minutes to complete. We believe that the health 
professional should consider the beneficiary's needs when determining 
whether assistance would be needed for the beneficiary to complete the 
HRA. Factors a health professional may wish to consider include vision, 
hearing, or language limitations; the communication needs of 
underserved populations; persons with limited English proficiency; and 
persons with health literacy needs.
    The completed HRA and results would be provided to the health 
professional as that term is defined in Sec.  410.15(a), as a 
foundation for completing the elements included in the definitions of 
first and subsequent AWVs during the AWV encounter. The CDC guidance 
document explains that ``during the visit, the HRA information, and 
other biometrics available are utilized by the practitioner in a 
thought process intended to develop a prevention plan for the patient 
to improve health status and delay the onset of disease known to be 
caused by the reported behavioral risks or the patient's current health 
status. The practitioner can, in a shared decisionmaking process with 
the patient provide feedback in the form of educational messages, 
counseling or referrals related to changing high risk behaviors and 
health habits. This feedback can potentially improve health behaviors 
and/or alter one's risk of disease, improve chronic disease management 
or likelihood of premature death.'' For instance, the HRA may collect 
aspects of the beneficiary's medical and family history, such as 
history of tobacco use, that would provide a foundation for 
personalized health advice, and if deemed appropriate, referral for 
additional preventive services after completion of the AWV. We note 
that the standards outlined in the proposed definition of the term 
health risk assessment represent a minimum set of topics that need to 
be addressed as part of an HRA, while allowing the health professional 
the flexibility to evaluate additional topics, as appropriate, to 
provide a foundation for development of a personalized prevention plan.
(2) Proposed Changes to the Definitions of ``First Annual Wellness 
Visit'' and ``Subsequent Annual Wellness Visit''
    In Sec.  410.15, we adopted the components of the AWV, consistent 
with the statutory elements described in section 1861(hhh)(2) of the 
Act. The first and subsequent annual wellness visits, as defined in 
Sec.  410.15(a), are meant to represent a beneficiary visit focused on 
prevention. Among other things, the annual wellness visit encourages 
beneficiaries to obtain the preventive services covered by Medicare

[[Page 42838]]

that are appropriate for them. First and subsequent AWVs also include 
elements that focus on the furnishing of personalized health advice and 
referral, as appropriate, to health education, preventive counseling 
services, programs aimed at improving self-management, and community-
based lifestyle interventions.
    We are proposing that the definitions of ``first annual wellness 
visit providing personalized prevention plan services'' and 
``subsequent annual wellness visit providing personalized prevention 
plan services'' be revised to incorporate the use and results of an 
HRA. The HRA is an integral part of the provision of personalized 
prevention plan services, consistent with section 1861(hhh) of the Act. 
We propose to incorporate the HRA by revising the definitions of first 
and subsequent AWVs as follows:
     Specify that the AWV take into account the results of an 
HRA.
     Add the review (and administration, if needed) of an HRA 
as an element of both first and subsequent AWVs.
     Specify that the establishment of a written screening 
schedule for the individual, such as a checklist, includes and takes 
into account the HRA.
    The HRA facilitates a systematic method for identifying health 
behaviors and risk factors known to the patient (such as: Smoking, 
physical activity, and nutritional habits) for which the medical 
provider can discuss and provide tailored feedback aimed at reducing 
risk factors as well as reducing the potential for developing the 
diseases to which they are related.
    During the AWV encounter, the HRA information is utilized by the 
health professional in a thought process intended to develop a 
personalized prevention plan for the patient to improve health status 
and delay the onset of disease. For instance, if the information 
provided by the HRA indicated that the beneficiary had a current or 
past history of tobacco use, the health professional may deem it 
appropriate to perform those commonly used aspects of a clinical 
evaluation (for instance, listening to (auscultation) the heart and 
lungs) in order to provide the appropriate personalized health advice 
and referrals for additional preventive services such as tobacco 
cessation counseling.
    The CDC guidance document provides a list of questions/topics to be 
addressed in an HRA, including biometric assessments of height, weight, 
body mass index (BMI), systolic/diastolic blood pressure, blood lipids 
(HDL/LDL and total cholesterol, triglycerides), and blood glucose. 
Additionally, the CDC guidance document suggested that the information 
collected via the HRA would be reconciled with biometric assessments 
obtained by the provider. Consistent with section 1861(hhh)(2) of the 
Act, the definitions for first AWV and subsequent AWVs address most of 
the biometric assessments suggested in the CDC guidance document. We 
are requesting public comment on the applicability and impact of 
including additional elements and biometric assessments to first and 
subsequent AWVs, per the Secretary's authority under section 
1861(hhh)(2)(G) of the Act.
    We believe that the incorporation of the HRA would increase the 
efficiency of the health professional's effort during the AWV. For 
instance, during the AWV encounter, the health professional furnishing 
the AWV would review the information reported in the HRA, which would 
serve as the basis for a personalized prevention plan provided during 
the AWV encounter. The beneficiary would leave the visit with 
personalized health advice, appropriate referrals, and a written 
individualized screening schedule, such as a check list. We would not 
expect that the health professional would provide only general 
recommendations during the AWV encounter and then mail a personalized 
prevention plan that incorporates an HRA to the beneficiary outside of 
the AWV encounter. While the AWV is a wellness visit that focuses on 
wellness and disease prevention, a follow-up visit to treat an 
identified illness may be needed to address an urgent health issue. For 
example, if a beneficiary is determined to have high blood pressure, a 
follow-up visit for further review of symptoms and evaluation and 
management, along with determining whether additional interventions are 
necessary, may be performed after the completion of the AWV as a 
separate service.
    We are requesting public comment on the overall impact and burden 
of the AWV on health professional practices, including the impact that 
incorporation of the use of an HRA will have on health professionals 
and their practices. Specifically, we are seeking public comment on the 
following:
     The impact of use of an HRA on health professional 
practices;
     The burden on health professional practices of 
incorporating an HRA into subsequent AWVs as well as the first AWV;
     The impact of the elements included in the definitions of 
first and subsequent AWV.
     Modification of those AWV elements for which the Secretary 
has authority to determine appropriateness.
    We are also proposing changes to the definition of the term 
``subsequent annual wellness visit providing personalized prevention 
plan services'' to clarify that the health professional should furnish 
personalized prevention plan services and updated information if there 
have been changes since the beneficiary's last AWV, whether that was a 
first AWV or a subsequent AWV. In the CY 2011 PFS final rule with 
comment period, we stated in the definition of ``subsequent annual 
wellness visit providing personalized prevention plan services'' that 
certain elements should be updated based on information developed 
during the first AWV (for example, lists of risk factors and screening 
schedules). Since all AWVs that follow the first AWV are considered 
subsequent AWVs, the health professional should update elements that 
were developed during the previous AWV if there have been changes. The 
proposed changes to the definition of the term ``subsequent annual 
wellness visit providing personalized prevention plan services'' are as 
follows:
     We propose that newly redesignated paragraph (iii) state 
``an update of the list of current providers and suppliers that are 
regularly involved in providing medical care to the individual as that 
list was developed for the first annual wellness visit providing 
personalized prevention plan services or the previous subsequent annual 
wellness visit providing personalized prevention plan services.''
     We propose that newly redesignated paragraph (vi)(B), 
state ``the list of risk factors and conditions for which primary, 
secondary or tertiary interventions are recommended or are underway for 
the individual as that list was developed at the first annual wellness 
visit providing personalized prevention plan services or the previous 
subsequent annual wellness visit providing personalized prevention plan 
services.''
2. The Addition of a Health Risk Assessment as a Required Element for 
the Annual Wellness Visit Beginning in 2012
    Section 4103 of the Affordable Care Act created a new benefit for 
an ``annual wellness visit'' (AWV) providing personalized prevention 
plan services (PPPS). The Affordable Care Act amended section 
1861(s)(2) of the Act by adding new subparagraph (FF) to provide for 
coverage of the AWV beginning January 1, 2011. Section 4103

[[Page 42839]]

of the Affordable Care Act also added new subsection (hhh) to section 
1861 of the Act to define ``personalized prevention plan services'' and 
to specify who may furnish these services. Finally, section 4103 of the 
Affordable Care Act amended section 1848(j)(3) of the Act and provided 
for payment of AWVs under the PFS, and specifically excluded the AWV 
from the hospital OPPS. As discussed in the CY 2011 PFS final rule with 
comment period (75 FR 73401), a single Medicare payment is made when an 
AWV is furnished by a physician, physician assistant, nurse 
practitioner, or clinical nurse specialist, or by a medical 
professional or team of medical professionals, under the direct 
supervision of a physician.
    In the CY 2011 PFS final rule with comment period (75 FR 73409), we 
established two HCPCS G-codes for reporting the AWV beginning in CY 
2011: G0438 (Annual wellness visit; includes a personalized prevention 
plan of service (PPPS), first visit) and G0439 (Annual wellness visit; 
includes a personalized prevention plan of service (PPPS), subsequent 
visit).
    A beneficiary is eligible for only one first AWV (HCPCS code G0438) 
covered by Medicare that must include all of the required elements that 
we adopted in our final policy for the CY 2011 PFS final rule with 
comment period (75 FR 73399). All subsequent AWVs (HCPCS code G0439) 
include the required elements for those visits as finalized in the CY 
2011 PFS final rule with comment period (75 FR 73399). All AWVs other 
than the beneficiary's first AWV shall be reported as subsequent 
visits, even if a different practitioner furnished the subsequent AWV. 
We expect there to be continuity and communication among the 
practitioners caring for beneficiaries over time with respect to AWVs, 
and this would include the case where a different practitioner 
furnishing a subsequent AWV would update the information in the 
patient's medical record based on the patient's interval history since 
the previous AWV.
    As we stated in the CY 2011 PFS final rule with comment period (75 
FR 73409), we believe that the first AWV described by HCPCS code G0438 
is similar to the IPPE that is currently reported with HCPCS code G0402 
(Initial preventive physical examination; face-to-face visit, services 
limited to new beneficiary during the first 12 months of Medicare 
enrollment). We note that in the CY 2010 PFS final rule with comment 
period discussion of payment for the IPPE (74 FR 61767), we stated that 
in the context of physician work and intensity, HCPCS code G0402 was 
most equivalent to CPT code 99204 (Level 4 new patient office or other 
outpatient visit). In addition, in the CY 2011 PFS final rule with 
comment period (75 FR 73410), we indicated that subsequent AWV's 
described by HCPCS code G0439 are most similar, from the perspectives 
of physician work and PE, to CPT code 99214 (Level 4 established 
patient office or other outpatient visit). Therefore, we valued HCPCS 
codes G0438 and G0439 for payment under the PFS using a crosswalk 
methodology for the work RVUs and direct PE inputs from the level 4 new 
and established patient office or other outpatient visit CPT codes, 
respectively.
a. Payment for AWV services with the inclusion of an HRA element
    In the CY 2011 PFS final rule with comment period (75 FR 73411), we 
stated ``that when the HRA is incorporated in the AWV, we will 
reevaluate the values for HCPCS codes G0438 and G0439''. As discussed 
in the CY 2011 PFS final rule with comment period, the services 
described by CPT codes 99204 and 99214 already include `preventive 
assessment' forms. For CY 2012, we believe that the current payment 
crosswalk for HCPCS codes G0438 and G0439 continue to be most 
accurately equivalent to a level 4 E/M new or established patient 
visit; and therefore, we are proposing to continue to crosswalk HCPCS 
codes G0438 and G0439 to CPT codes 99204 and 99214, respectively.

F. Quality Reporting Initiatives

1. Physician Payment, Efficiency, and Quality Improvements--Physician 
Quality Reporting System
a. Program Background and Statutory Authority
    The Physician Quality Reporting System is a quality reporting 
program that provides incentive payments and payment adjustments to 
identified eligible professionals who satisfactorily report data on 
quality measures for covered professional services furnished during a 
specified reporting period. The Physician Quality Reporting System was 
initially implemented in 2007 as a result of section 101 of Division B 
of the Tax Relief and Health Care Act of 2006. The Physician Quality 
Reporting System was extended and further enhanced as a result of the 
Medicare Improvements for Patients and Providers Act of 2009 (MIPPA), 
which was enacted on July 15, 2008, and the Affordable Care Act, which 
was enacted on March 23, 2010.
    Changes to the Physician Quality Reporting System as a result of 
these laws, as well as information about the Physician Quality 
Reporting System in 2007, 2008, 2009, 2010, and 2011 are discussed in 
detail in the CY 2008 PFS proposed and final rules (72 FR 38196 through 
38204 and 72 FR 66336 through 66353, respectively), CY 2009 PFS 
proposed and final rules (73 FR 38558 through 38575 and 73 FR 69817 
through 69847, respectively), CY 2010 PFS proposed and final rules (74 
FR 33559 through 33600 and 74 FR 61788 through 61861, respectively), 
and CY 2011 PFS proposed and final rules (75 FR 73487 through 73552). 
Further detailed information, about the Physician Quality Reporting 
System, related laws, and help desk resources, is available on the CMS 
Web site at http://www.cms.gov/PQRS.
    In the CY 2011 PFS final rule (75 FR 73618), we established 42 CFR 
414.90 governing the Physician Quality Reporting System.
b. Methods of Participation
    There are two ways an eligible professional may participate in the 
Physician Quality Reporting System: (1) As an individual eligible 
professional or (2) as part of a group practice under the Physician 
Quality Reporting System group practice reporting option (GPRO). The 
details of each proposed method of participation are described in this 
section.
(1) Individual Eligible Professionals
    As defined at 42 CFR 414.90(b) the term ``eligible professional'' 
means any of the following: (1) A physician; (2) a practitioner 
described in section 1842(b)(18)(C) of the Act; (3) a physical or 
occupational therapist or a qualified speech-language pathologist; or 
(4) a qualified audiologist. For more information on which 
professionals are eligible to participate in the Physician Quality 
Reporting System, we refer readers to the ``List of Eligible 
Professionals'' download located in the ``How to Get Started section of 
the Physician Quality Reporting CMS Web site at: http://www.cms.gov/PQRS/03_How_To_Get_Started.asp#TopOfPage.
(2) Group Practices
(A) Background and Authority
    As required by section 1848(m)(3)(C)(i) of the Act, we established 
and have had in place since January 1, 2010, a process under which 
eligible professionals in a group practice are treated as 
satisfactorily submitting data on quality measures under the Physician 
Quality Reporting System if, in lieu of reporting measures under the 
Physician Quality Reporting System, the group practice reports measures

[[Page 42840]]

determined appropriate by the Secretary, for example measures that 
target high-cost chronic conditions and preventive care, in a form and 
manner, and at a time specified by the Secretary. Section 
1848(m)(3)(C)(ii) of the Act requires that this process provide for the 
use of a statistical sampling model to submit data on measures, for 
example the model used under the Medicare Physician Group Practice 
(PGP) demonstration project under section 1866A of the Act. We 
established a group practice reporting option (GPRO) for the Physician 
Quality Reporting System under 42 CFR 414.90(g).
(B) Proposed Definition of Group Practice
    Under 42 CFR 414.90(b), a ``group practice'' means ``a single Tax 
Identification Number (TIN) with two or more eligible professionals, as 
identified by their individual National Provider Number (NPI), who have 
reassigned their Medicare billing rights to the TIN''. We propose to 
change the definition of ``group practice'' under 42 CFR 414.90(b). 
Specifically, we propose that under the Physician Quality Reporting 
System, a ``group practice'' would consist of a physician group 
practice, as defined by a TIN, with 25 or more individual eligible 
professionals (or, as identified by NPIs) who have reassigned their 
billing rights to the TIN. This proposed definition of group practice 
is different from the definition of group practice that was applicable 
for the 2011 Physician Quality Reporting System, which defined a group 
practice as two or more eligible professionals.
    For the 2010 Physician Quality Reporting System, our definition of 
``group practice'' was limited to practices with 200 or more eligible 
professionals because our intent was to model the Physician Quality 
Reporting System GPRO after a quality reporting program that group 
practices may already be familiar with--the Physician Group Practice 
(PGP) demonstration. Since participation in the PGP demonstration was 
limited to large group practices, we wanted to initially limit 
participation in the Physician Quality Reporting System GPRO to similar 
large group practices. In 2011, we expanded this definition to include 
practices with 2-199 eligible professionals because we developed a 
second reporting option (GPRO II) specifically for smaller group 
practices that was based largely on the Physician Quality Reporting 
System reporting options for individual eligible professionals. We have 
since observed that many of these smaller group practices that self-
nominated to participate in GPRO II for 2011 subsequently elected to 
opt out of participation in the GPRO II for 2011 so that members of the 
group practices can participate in the Physician Quality Reporting 
System individually instead. Out of 107 total groups that self-
nominated for GPRO II, only 25 group practices comprised of 2-10 
eligible professionals and 15 group practices comprised of 11-25 
eligible professionals are still participating in GPRO II for 2011 at 
this time.
    Since the GPRO II seems to be a less attractive reporting option 
than GPRO I, we are proposing in section IV.F.1.b.2 of this proposed 
rule to consolidate GPRO I and II into a single GPRO. However, since 
our experience with using the GPRO submission web interface under the 
Physician Quality Reporting System has been limited to larger practices 
or practices participating in demonstration projects, we hesitate to 
expand what we referred to as GPRO I to all group practices until we 
gain some experience with smaller practices on a larger scale. For 
example, we believe that participation under the Physician Quality 
Reporting System GPRO is a more effective method of participation for 
larger as opposed to smaller group practices. As described in section 
IV.F.1.e.6 of this proposed rule, a group practice must take extra 
steps to participate in the Physician Quality Reporting System GPRO, 
for example reporting on more measures overall than is required for 
individual eligible professionals. In contrast, members of a group 
practice who choose to participate in the Physician Quality Reporting 
System as individual eligible professionals could satisfactorily report 
by reporting as few as 3 measures. We believe the additional reporting 
burden associated with participating under the Physician Quality 
Reporting System GPRO may make the GPRO less attractive for smaller 
practices. For these reasons, we propose to change the definition of 
``group practice'' at 42 CFR 414.90(b) to groups with 25 or more 
eligible professionals.
    Our proposal to change the definition of group practice would not 
preclude individual eligible professionals in group practices of less 
than 25 eligible professionals from participating in the Physician 
Quality Reporting System, since members of these group practices may 
still participate as individual eligible professionals. We believe that 
smaller group practices are more closely akin to individual eligible 
professionals with respect to participation under the Physician Quality 
Reporting System. We request comments on the proposed change to the 
definition of ``group practice'' under 42 CFR 414.90(b) under the 
Physician Quality Reporting System and also, whether we should retain 
the existing definition under the regulation despite our proposal to 
retain only the GPRO I for 2012.
    We recognize that a group's size can fluctuate throughout the year 
as professionals move from practice to practice. We allow for 
fluctuation of the group practice's size throughout the reporting 
period. However, the group practice's size after the group practice's 
participation is approved by CMS must continue to meet the definition 
of a group practice as proposed in 42 CFR 414.90(b) for the entire 
reporting period.
    We also note that under 42 CFR 414.90(g)(1), a group practice of 
any size (including solo practitioners) or comprised of multiple TINs 
participating in a Medicare approved demonstration project of other 
programs would also be deemed to be participating in the Physician 
Quality Reporting System GPRO. For example, the PGP demonstration, as 
well as the Medicare Shared Savings Program (governing accountable care 
organizations (ACOs)), Pioneer ACO, and EHR demonstrations have 
incorporated or proposed to incorporate aspects of the Physician 
Quality Reporting System reporting requirements and incentives under 
those respective programs.
    Our intention to recognize (deem) group practices participating in 
such other programs or demonstration projects as having participated in 
the Physician Quality Reporting System was to ensure that such groups 
would not be barred from participating in the group practice reporting 
option under the eRx Incentive program, since we previously required 
that group practices interested in participating in the eRx Incentive 
Program also participate in the Physician Quality Reporting System 
GPRO. We are not proposing to change the eligibility for group 
practices, including those participating in the programs mentioned 
above, to participate in the eRx Incentive program. As discussed in the 
proposed changes to the eRx Incentive Program in section IV.F.1.e.2 
later in this proposed rule, however, we are proposing that a group 
practice must self-nominate to participate under the eRx Incentive 
Program's group practice reporting option. In addition, we are 
proposing to make a technical change to 42 CFR 414.90(g)(1) to 
eliminate the reference to group practices in demonstrations that are 
deemed to have participated in the Physician Quality Reporting System. 
We believe that this language is unnecessary given the regulation at 42 
CFR

[[Page 42841]]

414.92(b). In addition, we believe that retaining the reference at 42 
CFR 414.90(g)(1) may cause confusion with regard to participation under 
the Physician Quality Reporting System or inappropriately suggest that 
duplicate Physician Quality Reporting System incentive payments are 
available to group practices under both the Physician Quality Reporting 
System and the other types of programs mentioned previously. We also 
propose to make a technical change to 42 CFR 414.92(b) to more broadly 
address group practices in other types of programs that incorporate 
Physician Quality Reporting System reporting requirements and 
incentives, so that the regulation does not solely reference 
demonstrations. We seek comments on these proposed technical changes to 
the regulations.
    Since the introduction of the Physician Quality Reporting System 
GPRO in 2010, eligible professionals within a group practice were 
required to assign their billing rights to a single TIN. For 2012, as 
stated previously, we are proposing to retain this requirement. 
However, in an effort to align the Physician Quality Reporting System 
with other CMS quality reporting group programs, we considered amending 
the definition of ``group practice'' to allow participation in the 
Physician Quality Reporting System GPRO by groups with 25 or more 
individual eligible professionals (or, as identified by NPIs) who 
practice using multiple TINs. We believe that changing the definition 
of group practice in the Physician Quality Reporting System for future 
program years to align with other quality reporting group programs may 
be beneficial to providers who wish to participate in multiple CMS 
quality reporting programs that apply to group practices. Although we 
are not proposing to do so at this time, we invite public comment on 
possibly expanding the definition of group practice to be comprised of 
multiple TINs in future years of the program.
    We believe that to the extent we changed the definition of group 
practice in future years to allow for participation by group practices 
that use multiple TINs, it would require us to create additional 
parameters related to the relationship between the various TINs. As 
such, we also invite public comment on parameters that should be set to 
ensure that these multiple TINs represent a single integrated practice, 
such as but not limited to:
     Must eligible professionals in a group practice share 
certain common characteristics in order to be eligible for 
participation under the Physician Quality Reporting System GPRO, such 
as geographic location or specialty?
     Should there be a limit to how many TINs may be comprised 
in a single group practice?
    We invite public comment on parameters that may be set should we 
decide to amend the definition of group practice to include multiple 
TINs in future program years.
(C) Proposed Process for Physician Group Practices to Participate as 
Group Practices
    In order to participate in the Physician Quality Reporting System 
GPRO for 2012 and subsequent years, we propose to require group 
practices to complete a self-nomination process and to meet certain 
technical and other requirements described later in this section in 
greater detail. As in prior years, we are proposing to require these 
self-nomination and additional process requirements so that we may 
identify which group practices are interested in participating in the 
Physician Quality Reporting System as a GPRO as well as to ensure that 
group practices participating in the GPRO understand the process for 
satisfactorily reporting Physician Quality Reporting System quality 
measures under the GPRO method of reporting.
    We propose to require that group practices interested in 
participating in the Physician Quality Reporting System GPRO for the 
first time submit a self-nomination statement for the respective year 
the group practice wishes to participate as a Physician Quality 
Reporting System GPRO via a Web-based tool that includes the group 
practice's TIN(s) and name of the group practice, the name and e-mail 
address of a single point of contact for handling administrative 
issues, as well as the name and e-mail address of a single point of 
contact for technical support purposes. A group practice that submits 
an incomplete self-nomination statement, such as a valid e-mail address 
is not provided, would not be considered for inclusion in the Physician 
Quality Reporting System GPRO. We would notify any group practice that 
submits an incomplete self-nomination statement.
    If it is not operationally feasible for us to collect self-
nomination statements via a Web-based tool for 2012, we propose to 
require that group practices interested in participation in the 
Physician Quality Reporting System GPRO submit a self-nomination 
statement via a letter accompanied by an electronic file submitted in a 
format specified by us (such as a Microsoft Excel file) that includes 
the group practice's TIN(s) and name of the group practice, the name 
and e-mail address of a single point of contact for handling 
administrative issues, as well as the name and e-mail address of a 
single point of contact for technical support purposes. Under this 
proposed submission mechanism, a group practice that submits an 
incomplete self-nomination statement (such as, a valid e-mail address 
is not provided), would not be considered for inclusion in the 2012 
Physician Quality Reporting System GPRO.
    For the Physician Quality Reporting System GPRO, we propose that 
the self-nomination statement must also indicate the group practice's 
compliance with the following requirements:
     Agree to attend and participate in all mandatory GPRO 
training sessions.
     Is an established Medicare provider that has billed 
Medicare Part B on or after January 1 and prior to October 29 of the 
year prior to the reporting period for the respective year. For 
example, for purposes of participating in the 2012 Physician Quality 
Reporting System GPRO, the group practice must have billed Medicare 
Part B on or after January 1, 2011 and prior to October 29, 2011.
     Agree to have the results on the performance of their 
Physician Quality Reporting System measures publicly posted on the 
Physician Compare Web site.
     Obtain and/or have access to the identity management 
system specified by CMS (such as, but not limited to, the Individuals 
Authorized Access to CMS Computer Systems, or IACS) to submit Medicare 
clinical quality data to a CMS clinical data warehouse.
     Provide CMS access (upon request for validation purposes) 
to review the Medicare beneficiary data on which Physician Quality 
Reporting System GPRO submissions are founded or provide to CMS a copy 
of the actual data (upon request).
    Furthermore, to ensure that accurate data is being reported, we 
reserve the right to validate the data submitted by GPROs.
    We propose that, for 2012 and future years, a group practice that 
wishes to participate in both the Physician Quality Reporting System 
and eRx GPRO (see the eRx Incentive Program's section 
IV.F.2.(b).(2).(B). of this proposed rule) must indicate its desire to 
participate in both programs in its self-nomination statement.
    In 2012, the GPRO is interested in testing the extraction of EHR 
data submitted by group practices through the GPRO Web interface. We 
propose that those group practices wishing to participate in this test 
must state their

[[Page 42842]]

interest to participate in the group practice's self-nomination letter.
    We further propose that group practices that wish to self-nominate 
must do so by January 31 of the calendar year in which the group 
practice wishes to participate in the Physician Quality Reporting 
System GPRO. For example, in order to participate in the GPRO for the 
2012 Physician Quality Reporting System, the group practice would need 
to self-nominate by January 31, 2012. Upon receipt of the self-
nomination statements, we would assess whether the participation 
requirements for the respective reporting period were met by each group 
practice using Medicare claims data from the year prior to the 
respective reporting period. We would not preclude a group practice 
from participating in the GPRO if we discover, from analysis of the 
Medicare claims data, that there are some eligible professionals 
(identified by NPIs) that are not established Medicare providers (that 
is, have not billed Medicare Part B on or after January 1 and prior to 
or on October 29 of the year prior to the respective reporting period) 
as long as the group has at least the minimum proposed number (that is, 
25) of established Medicare providers required to participate in the 
Physician Quality Reporting System as a group practice. Eligible 
professionals, as classified by their NPIs, who do not submit Medicare 
Part B claims for PFS covered professional services during the 
reporting period, however, would not be included in our incentive 
payment calculations.
    Furthermore, we propose to allow group practices who have 
previously participated in the Physician Quality Reporting System GPRO 
to automatically be qualified to participate in the GPRO in 2012 and 
future program years. For example, group practices that were selected 
to participate in the 2011 Physician Quality Reporting System GPRO I or 
GPRO II (provided the group practice is still comprised of at least 25 
eligible professionals) would automatically be qualified to participate 
in the 2012 Physician Quality Reporting System GPRO and would not need 
to complete the 2012 Physician Quality Reporting System GPRO 
qualification process. These practices would, however, need to notify 
CMS in writing of their desire to continue participation in the 
Physician Quality Reporting System GPRO for the respective program 
year.
    We recognize that, for various reasons, there potentially could be 
a discrepancy between the number of eligible professionals (that is, 
NPIs) submitted by the practice during the self-nomination process and 
the number of eligible professionals billing Medicare under the 
practice's TIN as people move in and out of practices. Therefore, if we 
find more NPIs in the Medicare claims than the number of NPIs submitted 
by the practice during the self-nomination process and this would 
result in the practice being subject to different criteria for 
satisfactory reporting, we propose to notify the practice of this 
finding as part of the self-nomination process. At this point, the 
practice would have the option of either agreeing to be subject to the 
different criteria for satisfactory reporting or opting out of 
participation in the Physician Quality Reporting System GPRO to enable 
the members of their practice to participate in the Physician Quality 
Reporting System as individual eligible professionals.
    We invite public comment on our proposals regarding the process for 
physician group practices to participate in the Physician Quality 
Reporting System GPRO.
c. Proposed Reporting Period
    Since the implementation of the Physician Quality Reporting System 
in 2007, depending on an eligible professional's chosen reporting 
mechanism, we have offered up to two different reporting periods for 
satisfactorily reporting Physician Quality Reporting System quality 
measures: A 12-month reporting period (from January 1 through December 
31 of the respective program year) and a 6-month reporting period (from 
July 1 through December 31 of the respective program year). Section 
1848(m)(5)(F) of the Act requires CMS to provide alternative reporting 
periods and criteria for measures groups and registry reporting. To 
comply with this provision, for 2012 and subsequent years, CMS is 
proposing to retain the 6-month reporting period option for the 
reporting of Physician Quality Reporting System measures groups via 
registry.
    In addition, for 2012 and subsequent years, we propose to modify 42 
CFR 414.90(f)(1) to specify a 12-month reporting period (that is, 
January 1 through December 31 of the respective program year), 
consistent with section 1848(m)(6)(C)(i)(II) of the Act, for the 
satisfactory reporting of Physician Quality Reporting System quality 
measures for claims, registry, and EHR-Based reporting. Additionally, 
we propose to modify 42 CFR 414.90(g)(1) to specify a 12-month 
reporting period (that is, January 1 through December 31 of the 
respective program year) for the Physician Quality Reporting System 
GPRO. We understand that in proposing these modifications to 42 CFR 
414.90, we are proposing to eliminate the 6-month reporting period for 
claims and registry previously available under the Physician Quality 
Reporting System (with the exception of reporting measures groups via 
registry). Although we are not proposing a 6-month reporting period for 
claims and registry reporting (for reporting individual measures via 
registry), we note that the 12-month reporting period aligns with other 
CMS quality reporting programs. In addition, the elimination of the 6-
month reporting period for claims and registry reporting (for reporting 
individual measures via registry) will align the reporting periods of 
these mechanisms with the EHR reporting mechanism. We further believe 
that the elimination of the 6-month reporting period for claims and 
registry reporting (for reporting individual measures via registry) 
will help to streamline and simplify the reporting requirements for the 
Physician Quality Reporting System without substantial burden to 
eligible professionals who may still satisfactorily report using the 
12-month reporting period.
d. Proposed Reporting Mechanisms--Individual Eligible Professionals
    For the purpose of reporting quality measures under the Physician 
Quality Reporting System, we propose to retain the claims-based, 
registry-based, and EHR-Based reporting mechanism for 2012 and beyond. 
Accordingly, we propose to modify 42 CFR 414.9(f) to reflect this 
proposal. We are proposing to retain these reporting mechanisms in 
order to provide eligible professionals with multiple mechanisms from 
which to satisfactorily report Physician Quality Reporting System 
quality measures. We hope that offering multiple reporting mechanisms 
will aid in encouraging participation in the Physician Quality 
Reporting System.
    As in previous years, the individual quality measures or measures 
groups an eligible professional selects will dictate the applicable 
reporting mechanism(s). In addition, while eligible professionals can 
attempt to qualify for a Physician Quality Reporting System incentive 
under multiple reporting mechanisms, the eligible professional must 
satisfy the criteria for satisfactory reporting proposed for the 
respective program year, with respect to a single reporting mechanism 
to qualify for an incentive. We further propose that we would not 
combine data submitted via multiple reporting mechanisms to determine 
incentive eligibility. We invite public comment concerning the general, 
proposed reporting mechanisms for the

[[Page 42843]]

Physician Quality Reporting System for 2012 and beyond.
(1) Claims-Based Reporting
    As we noted previously, we propose to retain the claims-based 
reporting mechanism for the Physician Quality Reporting System for 2012 
and beyond. For eligible professionals who choose to participate in the 
Physician Quality Reporting System by submitting data on individual 
quality measures or measures groups through the claims-based reporting 
mechanism, we propose that the eligible professional be required to 
submit the appropriate Physician Quality Reporting System quality data 
codes (QDCs) on the professionals' Medicare Part B claims. QDCs for the 
eligible professional's selected individual Physician Quality Reporting 
System quality measures or measures group may be submitted to CMS at 
any time during the reporting period for the respective program year. 
However, as required by section 1848(m)(1)(A) of the Act, all claims 
for services furnished during the reporting period would need to be 
processed by no later than 2 months after the end of the reporting 
period, to be included in the program year's Physician Quality 
Reporting System analysis. For example, all claims for services 
furnished for the 2012 Physician Quality Reporting System would need to 
be processed by no later than 2 months after the end of the reporting 
period for the 2012 Physician Quality Reporting System, that is, 
processed by February 28, 2013 for the reporting period that ends 
December 31, 2012. We invite public comment on our proposed 
requirements for eligible professionals who choose the claims-based 
reporting mechanism for 2012 and beyond.
(2) Registry-Based Reporting
(A) Proposed Requirements for the Registry-Based Reporting Mechanism--
Individual Eligible Professionals
    As stated previously, we propose to retain the registry-based 
reporting mechanism via a qualified registry (as defined in section 
(2)(B) of this section) for the Physician Quality Reporting System for 
2012 and beyond. With regard to specific requirements for registry-
based reporting for individual eligible professional reporters under 
the Physician Quality Reporting System, we propose that in order to 
report quality data on the Physician Quality Reporting System 
individual quality measures or measures groups for the respective 
program year through a qualified registry, an eligible professional or 
group practice must enter into and maintain an appropriate legal 
arrangement with a qualified Physician Quality Reporting System 
registry. Such arrangements would provide for the registry's receipt of 
patient-specific data from the eligible professional and the registry's 
disclosure of quality measures results and numerator and denominator 
data on Physician Quality Reporting System quality measures or measures 
groups on behalf of the eligible professional to CMS. Thus, the 
registry would act as a Health Insurance Portability and Accountability 
Act of 1996 (Pub. L. 104-191) (HIPAA) Business Associate and agent of 
the eligible professional. Such agents are referred to as ``data 
submission vendors.'' The ``data submission vendors'' would have the 
requisite legal authority to provide clinical quality measures results 
and numerator and denominator data on individual quality measures or 
measures groups on behalf of the eligible professional for the 
Physician Quality Reporting System.
    We propose that the registry, acting as a data submission vendor, 
would submit CMS-defined registry-derived measures information to our 
designated database for the Physician Quality Reporting System, using a 
CMS-specified record layout, which would be provided to the registry by 
CMS. Similarly, we propose that eligible professionals choosing to 
participate in the Physician Quality Reporting System through the 
registry-based reporting mechanism for the respective program year must 
select a qualified Physician Quality Reporting System registry and 
submit information on Physician Quality Reporting System individual 
quality measures or measures groups to the selected registry in the 
form and manner and by the deadline specified by the registry.
    We propose to post a list of qualified registries for the Physician 
Quality Reporting System for the respective program year on the 
Physician Quality Reporting System section of the CMS Web site at 
http://www.cms.gov/pqrs, which would include the registry name, contact 
information, the measures and/or measures group (if qualified) for 
which the registry is qualified and intends to report for the 
respective program year, and information regarding the cost of the 
registry to eligible professionals. However, we do not anticipate 
making this list available prior to the start of the respective program 
year. That is, we do not anticipate making the list of qualified 
registries for the 2012 Physician Quality Reporting System available 
prior to the start of the 2012 program year. We propose to post the 
names of the Physician Quality Reporting System qualified registries 
for the respective reporting period in the following 3 phases based on: 
(1) The registry's success in submitting Physician Quality Reporting 
System quality measures results and numerator and denominator data on 
the quality measures in a prior Physician Quality Reporting System 
program year (2008, 2009, 2010, 2011, etc.); (2) the registry's 
submission of a letter indicating their continued interest in being a 
Physician Quality Reporting System registry by October 31 of the year 
prior to the program year (that is, by October 31, 2011 for the 2012 
program year); and (3) the registry's compliance with the Physician 
Quality Reporting System registry requirements for the respective 
program year as indicated by CMS' registry vetting process. The listing 
of a qualified registry will depend on which of the 3 proposed phases 
is most applicable to the registry. The manner in which we post the 
list of qualified registries is based on prior experience with 
participation in the Physician Quality Reporting System as a registry 
vendor.
(B) 2012 Proposed Qualification Requirements for Registries
    Although we are proposing to establish the registry-based reporting 
mechanism as a way to report Physician Quality Reporting System quality 
measures for 2012 and beyond, we propose that the following proposed 
qualification requirements only apply for the 2012 program year. For 
the Physician Quality Reporting System in 2012, as in prior program 
years, we propose to require a self-nomination process for registries 
wishing to submit Physician Quality Reporting System quality measures 
or measures groups on behalf of eligible professionals for services 
furnished during the applicable reporting periods in 2012. This 
qualification process allows us to ensure that registries are fully 
informed of the Physician Quality Reporting System reporting process 
and to ensure the registry is qualified, thereby improving the 
likelihood of accurate reporting.
    We note that third party intermediaries may participate in various 
capacities under the Physician Quality Reporting System. In addition, 
in an effort to encourage the electronic submission of quality measures 
data from eligible professionals' EHRs, we are proposing EHR-Based 
reporting, as discussed later in this section. As a result, we believe 
it is important to distinguish entities that collect their data from an 
EHR from those entities that collect their data from other sources. As 
such, as discussed here and below, we propose, the following two

[[Page 42844]]

categories of third party intermediaries that would be able to submit 
Physician Quality Reporting System measures data on behalf of eligible 
professional: (1) A registry, as defined at 42 CFR 414.90(b), which 
would be any data submission vendor submitting data from a source other 
than an EHR on behalf of eligible professionals that meets the proposed 
registry qualification requirements later in this section; and (2) EHR 
data submission vendors, which would be a data submission vendor that 
obtains its data from an eligible professional's EHR and that meets the 
2012 EHR qualification requirements. However, for operational reasons, 
we may reserve the right to limit such entities to a single role such 
that the entity would need to decide whether it wants to serve as a 
registry or EHR data submission vendor but not both. We note that a 
registry could serve as an ``EHR data submission vendor'' to the extent 
that it obtains data from an eligible professional's EHR, but would 
need to meet the proposed 2012 EHR qualification requirements. To be 
considered a qualified registry for purposes of serving as a registry 
under the program and submitting individual quality measures on behalf 
of eligible professionals who choose the registry reporting mechanism 
for 2012, we propose that both registries new to the Physician Quality 
Reporting System and those previously qualified must:
     Be in existence as of January 1, 2012.
     Have at least 25 participants by January 1, 2012.
     Provide at least 1 feedback report, based on the data 
submitted to them for the 2012 Physician Quality Reporting System 
incentive reporting period, and if technically feasible, provide at 
least 2 feedback reports throughout the year to participating eligible 
professionals. Although it is not a requirement that registries provide 
interim feedback reports, we believe it is in the stakeholder's 
interest to require early registry collection of data for purposes of 
providing a feedback report to eligible professionals before the end of 
the 2012 Physician Quality Reporting System incentive reporting period 
to determine what steps, if any, an eligible professional should take 
to meet the criteria for satisfactory reporting.
     For purposes of distributing feedback reports to eligible 
professionals, collect an eligible professional's e-mail addresses and 
have documentation from the eligible professional authorizing the 
release of his or her e-mail address.
     Not be owned and managed by an individual locally-owned 
single-specialty group (in other words, single-specialty practices with 
only 1 practice location or solo practitioner practices would be 
prohibited from self-nominating to become a qualified Physician Quality 
Reporting System registry).
     Participate in ongoing 2012 Physician Quality Reporting 
System mandatory support conference calls hosted by CMS (approximately 
1 call per month), including an in-person registry kick-off meeting to 
be held at CMS headquarters in Baltimore, MD. Registries that miss more 
than one meeting would be precluded from submitting Physician Quality 
Reporting System data for the reporting year (2012).
     Be able to collect all needed data elements and transmit 
to CMS the data at the TIN/NPI level for at least 3 measures, which is 
the minimum amount of measures on which an eligible professional is 
required to report, in the 2012 Physician Quality Reporting System 
(according to the posted 2012 Physician Quality Reporting System 
Measure Specifications);
     Be able to calculate and submit measure-level reporting 
rates or, upon request, the data elements needed to calculate the 
reporting rates by TIN/NPI.
     Be able to calculate and submit, by TIN/NPI, a performance 
rate (that is, the percentage of a defined population who receive a 
particular process of care or achieve a particular outcome based on a 
calculation of the measure's numerator and denominator specifications) 
for each measure on which the TIN/NPI reports or, upon request the 
Medicare beneficiary data elements needed to calculate the reporting 
rates.
     Be able to separate out and report on Medicare Part B FFS 
patients.
     Provide the name of the registry.
     Provide the reporting period start date the registry will 
cover.
     Provide the reporting period end date the registry will 
cover.
     Provide the measure numbers for the Physician Quality 
Reporting System quality measures on which the registry is reporting.
     Provide the measure title for the Physician Quality 
Reporting System quality measures on which the registry is reporting.
     Report the number of eligible instances (reporting 
denominator).
     Report the number of instances a quality service is 
performed (reporting numerator).
     Report the number of performance exclusions, meaning the 
quality action was not performed for a valid reason as defined by the 
measure specification.
     Report the number of reported instances, performance not 
met (eligible professional receives credit for reporting, not for 
performance), meaning the quality action was not performed for no valid 
reason as defined by the measure specification.
     Be able to transmit this data in a CMS-approved XML 
format.
     Comply with a CMS-specified secure method for data 
submission, such as submitting the registry's data in an XML file 
through an identity management system specified by CMS or another 
approved method, such as use of appropriate NwHIN (Nationwide Health 
Information Network) specifications, if technically feasible.
     Submit an acceptable ``validation strategy'' to CMS by 
March 31, 2012. A validation strategy ascertains whether eligible 
professionals have submitted accurately and on at least the minimum 
number (80 percent) of their eligible patients, visits, procedures, or 
episodes for a given measure, which, as described in section (e)(2) of 
this section, is the minimum percentage of patients on which an 
eligible professional must report on any given measure. Acceptable 
validation strategies often include such provisions as the registry 
being able to conduct random sampling of their participant's data, but 
may also be based on other credible means of verifying the accuracy of 
data content and completeness of reporting or adherence to a required 
sampling method.
     Perform the validation outlined in the strategy and send 
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
     Enter into and maintain with its participating 
professionals an appropriate Business Associate agreement that provides 
for the registry's receipt of patient-specific data from the eligible 
professionals, as well as the registry's disclosure of quality measure 
results and numerator and denominator data and/or patient-specific data 
on Medicare beneficiaries on behalf of eligible professionals who wish 
to participate in the Physician Quality Reporting System.
     Obtain and keep on file signed documentation that each 
holder of an NPI whose data are submitted to the registry has 
authorized the registry to submit quality measure results and numerator 
and denominator data and/or patient-specific data on Medicare 
beneficiaries to CMS for the purpose of Physician Quality Reporting 
System participation. This documentation must be obtained at the time 
the eligible professional signs up with the registry to submit 
Physician Quality Reporting

[[Page 42845]]

System quality measures data to the registry and must meet any 
applicable laws, regulations, and contractual business associate 
agreements.
     Provide CMS access (upon request for health oversight 
purposes like validation) to review the Medicare beneficiary data on 
which 2012 Physician Quality Reporting System registry-based 
submissions are founded or provide to CMS a copy of the actual data 
(upon request).
     Provide CMS a signed, written attestation statement via 
mail or e-mail which states that the quality measure results and any 
and all data including numerator and denominator data provided to CMS 
are accurate and complete.
     Use Physician Quality Reporting System measure 
specifications and the CMS provided measure calculation algorithm, or 
logic, to calculate reporting rates or performance rates unless 
otherwise stated. CMS would provide registries a standard set of logic 
to calculate each measure and/or measures group they intend to report 
in 2012.
     Provide a calculated result using the CMS supplied measure 
calculation logic and XML file for each measure that the data 
submission vendor intends to calculate. The registries would be 
required to show that they can calculate the proper measure results 
(that is, reporting and performance rates) using the CMS-supplied logic 
and send the calculated data back to CMS in the specified format.
     Provide the individual data elements used to calculate the 
measures upon request by CMS under its health oversight authority, if 
aggregated data submission is still the selected method of data 
collection. Registries that are subject to validation will be asked to 
send discrete Medicare beneficiary data elements for a measure 
(determined by CMS) in the required data format for us to recalculate 
the registries' reported results. Validation would be conducted for 
several measures at a randomly selected sample of registries in order 
to validate their data submissions.
     Provide CMS with beneficiary-level data provided to the 
registry by the eligible professional in the CMS-approved format, upon 
request by CMS. CMS intends to use the data to calculate the eligible 
professional's measure results (that is, reporting and performance 
rates).
    In addition to meeting all the requirements specified previously 
for the reporting of individual quality measures via registry, for 
registries that intend to report on 2012 Physician Quality Reporting 
System measures groups, we propose that both registries new to the 
Physician Quality Reporting System and those previously qualified must:
     Indicate the reporting period chosen for each eligible 
professional who chooses to submit data on measures groups.
     Base reported information on measures groups only on 
patients to whom services were furnished during the 2012 reporting 
period.
     Agree that the registry's data may be inspected or a copy 
requested by CMS and provided to CMS under our oversight authority.
     Be able to report consistent with the proposed reporting 
criteria requirements, as specified in section (e)(2) of this section.
    We intend to post the final 2012 Physician Quality Reporting System 
registry requirements on the Physician Quality Reporting System section 
of the CMS Web site at http://www.cms.gov/pqrs by November 15, 2011 or 
shortly thereafter. We anticipate that new registries that wish to 
self-nominate for 2012 would be required to do so by January 31, 2012.
    We propose that registries that were ``qualified'' for 2011 and 
wish to continue to participate in 2012 will not need to be ``re-
qualified'' for 2012, but instead would only be required to demonstrate 
that they can meet the new 2012 data submission requirements. For 
technical reasons, however, we do not expect to be able to complete 
this vetting process for the new 2012 data submission requirements 
until mid-2012. Therefore, for 2012, we may not be able to post the 
names of registries that are qualified for the 2012 Physician Quality 
Reporting System until we have determined the previously qualified 
registries that wish to be qualified for the 2012 Physician Quality 
Reporting System are in compliance with the new registry requirements.
    We propose that registries ``qualified'' for 2011, who are 
successful in submitting 2011 Physician Quality Reporting System data, 
and wish to continue to participate in 2012 would need to indicate 
their desire to continue participation for 2012 by submitting a self-
nomination statement via a web-based tool to CMS indicating their 
continued interest in being a Physician Quality Reporting System 
registry for 2012 and their compliance with the 2012 Physician Quality 
Reporting System registry requirements by no later than October 31, 
2011. Additionally, registries that were qualified but unsuccessful in 
submitting 2011 Physician Quality Reporting System data (that is, fail 
to submit 2011 Physician Quality Reporting System data per the 2011 
Physician Quality Reporting System registry requirements) would need to 
go through a full self-nomination vetting process for 2012.
    We further propose that by March 31, 2012, registries that are 
unsuccessful at submitting registry data in the correct data format for 
2011 would need to be able to meet the 2012 Physician Quality Reporting 
System registry requirements and go through the full vetting process 
again. This would include CMS receiving the registry's self-nomination 
by March 31, 2012. We propose that the aforementioned registry 
requirements will also apply for the purpose of a registry qualifying 
to submit the electronic prescribing measure for the 2012 eRx Incentive 
Program. We anticipate finalizing the list of 2012 Physician Quality 
Reporting System registries by Summer 2012.
    For eligible professionals considering this reporting mechanism, we 
point out that even though a registry is listed as ``qualified,'' we 
cannot guarantee or assume responsibility for the registry's successful 
submission of the required Physician Quality Reporting System quality 
measures results or measures group results or required data elements 
submitted on behalf of a given eligible professional. We invite public 
comment on our proposed 2012 requirements for the registry-based 
reporting mechanism for individual eligible professional reporters.
    Furthermore, in an effort to ensure that registries provide 
accurate reporting of Physician Quality Reporting System data, in 
program years after 2012, we seek to disallow previously-qualified 
registries from submitting data on Physician Quality Reporting System 
quality measures if it is found that the data registries provide are 
significantly inaccurate. We believe this is important because we have 
noticed many calculation and data submission errors in reporting from 
registries in past program years. Alternatively, for years after 2012, 
we may require registries to submit all the individual data elements 
for CMS to calculate an eligible professional's reporting and 
performance rates as well as require registries to submit patient-level 
data on Medicare beneficiaries rather than aggregate data. We seek 
public comment on disallowing previously-qualified registries to submit 
data on Physician Quality Reporting System quality measures in future 
program years if it is found that the data the registries provide are 
significantly inaccurate.

[[Page 42846]]

(3) EHR-Based Reporting
    For 2012 and beyond, we propose that eligible professionals who 
choose to participate in the Physician Quality Reporting System via the 
EHR-Based reporting mechanism have the option of submitting quality 
measure data obtained from their Physician Quality Reporting System 
qualified EHR to CMS either: (1) Directly from his or her qualified 
EHR, in the CMS-specified manner, or (2) indirectly from a qualified 
EHR data submission vendor (on the eligible professional's behalf), in 
the CMS-specified manner.
(A) Direct EHRs
(i) Proposed Requirements for the Direct EHR-Based Reporting 
Mechanism--Individual Eligible Professionals
    For 2012 and beyond, we propose to retain the EHR-Based reporting 
mechanism via a qualified EHR (as defined in section (3)(b) of this 
section) for the purpose of satisfactorily reporting Physician Quality 
Reporting System quality measures. We propose the following 
requirements for individual eligible professionals associated with EHR-
Based reporting: (1) Selection of a Physician Quality Reporting System 
qualified EHR product and (2) submission of Medicare clinical quality 
data extracted from the EHR directly to CMS, in the CMS-specified 
manner.
    We propose that, in addition to meeting the appropriate criteria 
for satisfactory reporting of individual measures for the 2012 
Physician Quality Reporting System EHR reporting option, eligible 
professionals who choose the EHR-Based reporting mechanism for the 2012 
Physician Quality Reporting System would be required to have a 
Physician Quality Reporting System qualified EHR product. We understand 
that eligible professionals may have purchased Certified EHR Technology 
for purposes of reporting under the Medicare and Medicaid EHR Incentive 
Programs. Such Certified EHR Technology may or may not be qualified for 
purposes of the 2012 Physician Quality Reporting System. Eligible 
professionals would need to ensure that their Certified EHR Technology 
is also qualified for purposes of the 2012 Physician Quality Reporting 
System to participate in the Physician Quality Reporting System via the 
EHR-Based reporting mechanism for 2012. The certification process for 
EHR technology does not test the EHR product's ability to output a file 
that meets the Physician Quality Reporting System measures file 
specifications. We are currently exploring ways to further align these 
two programs' reporting requirements for future years so that Certified 
EHR Technology may be used to satisfy both the Medicare EHR Incentive 
Program and the Physician Quality Reporting System without any 
additional testing. For 2012, we propose to modify the current list of 
EHR vendors qualified under the Physician Quality Reporting System to 
indicate which of the qualified vendors' products have also received a 
certification for the purposes of the EHR Incentive Programs. We invite 
public comment on the 2012 proposed qualifications for direct EHRs.
(ii) 2012 Proposed Qualification Requirements for Direct EHR Products
    For direct EHR products who wish to report 2012 Physician Quality 
Reporting System quality measures data on behalf of eligible 
professionals, we propose that a test of quality data submission from 
eligible professionals who wish to report 2012 quality measure data 
directly from their qualified EHR product would be required and we 
anticipate that this testing would occur in late 2012, immediately 
followed by the submission of the eligible professional's actual 2012 
Physician Quality Reporting System data in early 2013. This entire 
final test/production data submission timeframe for 2012 is expected to 
be December 2012 through February 2013. We are currently vetting newly 
self-nominated EHR vendor products for possible qualification for the 
2012 Physician Quality Reporting System program year. Similar to prior 
years, we expect to list the 2012 Physician Quality Reporting System 
qualified EHR products by January 2012. We will also be vetting those 
self-nominated EHR data submission vendors for possible qualification 
to submit 2012 Physician Quality Reporting System measures on eligible 
professionals' behalf under the EHR-Based reporting mechanism. We 
expect to list the entities that are EHR data submission vendors 
qualified to submit 2012 Physician Quality Reporting System EHR 
measures on eligible professionals' behalf by mid-2012.
    For direct EHR vendors wishing to qualify for participation in the 
2012 Physician Quality Reporting System-Medicare Incentive Pilot for 
the Medicare EHR Incentive Program (discussed in section IV.H. of this 
proposed rule), we propose a separate, accelerated vetting process for 
EHR vendors and their products. This vetting process will be the same 
process as the vetting process for EHR vendor products for the 2012 
Physician Quality Reporting System that is currently underway. We will 
begin the vetting process for these additional EHR data submission 
vendors in the beginning of 2012 and anticipate that the vetting 
process be completed by Summer/Fall 2012.
    We further propose that any EHR direct vendor interested in being 
``qualified'' to submit quality data extracted from an EHR to CMS on 
eligible professionals' behalf for the 2012 Physician Quality Reporting 
System would be required to self-nominate. We anticipate that the self-
nomination deadline will occur no later than December 31, 2011. We 
expect to post instructions for self-nomination by the 4th quarter of 
CY 2011 on the Physician Quality Reporting System section of CMS Web 
site.
(B) EHR Data Submission Vendors
(i) Proposed Requirements for the EHR Data Submission Vendor-based 
Reporting Mechanism--Individual Eligible Professionals
    For 2012 and beyond, we propose to retain the EHR-Based reporting 
mechanism via a qualified EHR (as defined in 42 CFR 414.90(b)) for the 
purpose of satisfactorily reporting Physician Quality Reporting System 
quality measures. We propose the following requirements for individual 
eligible professionals associated with indirect EHR-Based reporting: 
(1) Selection of a Physician Quality Reporting System qualified EHR 
product and (2) submission of Medicare clinical quality data extracted 
from the EHR to a qualified ``EHR data submission vendor'' (which may 
include some current registries, EHR vendors, and other entities that 
are able to receive and transmit clinical quality data extracted from 
an EHR) to CMS, in the CMS-specified manner. For eligible professionals 
who choose to electronically submit Medicare clinical quality data 
extracted from their EHR to a qualified EHR data submission vendor, the 
EHR data submission vendor would then submit the Physician Quality 
Reporting System measures data to CMS in a CMS-specified manner on the 
eligible professional's behalf for the respective program year.
    For 2012, we propose that in order for an eligible professional to 
submit Medicare clinical quality data extracted from his or her EHR to 
CMS via an EHR data submission vender, the eligible professional must 
enter into and maintain an appropriate legal arrangement with a 
qualified 2012 EHR data submission vendor that is capable of receiving 
and transmitting Medicare

[[Page 42847]]

clinical quality data extracted from an EHR. Such arrangements would 
provide for the EHR data submission vendor's receipt of beneficiary-
specific data from the eligible professional and the EHR data 
submission vendor's disclosure of the beneficiary-specific data on 
behalf of the eligible professional to CMS. Thus, the EHR data 
submission vendor would act as a Health Insurance Portability and 
Accountability Act of 1996 (Pub. L. 104-191) (HIPAA) Business Associate 
and agent of the eligible professional. Such agents are referred to as 
``EHR data submission vendors.'' The ``EHR data submission vendors'' 
would have the requisite legal authority to provide beneficiary-
specific data on the 2012 Physician Quality Reporting System EHR 
measures on behalf of the eligible professional to CMS for the 
Physician Quality Reporting System.
    We also propose that eligible professionals choosing to participate 
in the 2012 Physician Quality Reporting System through the EHR-Based 
reporting mechanism via an EHR data submission vendor for 2012 must 
select a qualified Physician Quality Reporting System EHR data 
submission vendor and submit information on Physician Quality Reporting 
System EHR measures to the selected EHR data submission vendor in the 
form and manner, and by the deadline specified by the EHR data 
submission vendor. We invite public comment on the proposed 
qualification requirements on the 2012 proposed qualification 
requirements for individual eligible professionals using EHR data 
submission vendors to submit Physician Quality Reporting System quality 
measures data.
(i) 2012 Proposed Qualification Requirements for EHR Data Submission 
Vendors
    Similar to our 2012 qualification requirements for direct EHR 
vendors, we propose that qualified EHR data submission vendors that 
wish to submit 2012 quality measures data obtained from an eligible 
professional's qualified EHR product to CMS on the eligible 
professional's behalf would be required to submit test data in late 
2012 followed by the submission of the eligible professional's actual 
2012 Physician Quality Reporting System data in early 2013. For data 
submission vendors wishing to qualify for participation in the 2012 
Physician Quality Reporting System-Medicare Incentive Pilot for the 
Medicare EHR Incentive Program (discussed in section IV.H. of this 
proposed rule), we propose a separate, accelerated vetting process for 
EHR vendors and their products. This vetting process will be the same 
process as the vetting process for EHR vendor products for the 2012 
Physician Quality Reporting System that is currently underway. We will 
begin the vetting process for these additional EHR data submission 
vendors in the beginning of 2012 and anticipate that the vetting 
process be completed by Summer/Fall 2012.
    We further propose that any EHR data submission vendor interested 
in being ``qualified'' to submit quality data extracted from an EHR to 
CMS on eligible professionals' behalf for the 2012 Physician Quality 
Reporting System would be required to self-nominate. We anticipate that 
the self-nomination deadline will occur no later than December 31, 
2011. We expect to post instructions for self-nomination by the 4th 
quarter of CY 2011 on the Physician Quality Reporting System section of 
CMS Web site.
    We propose the following qualification requirements for EHR data 
submission vendors who wish to submit 2012 Physician Quality Reporting 
System quality measure data:
     Not be in a beta test form.
     Be in existence as of January 1, 2012.
     Have at least 25 active users.
     Participate in ongoing Physician Quality Reporting 
mandatory support conference calls hosted by CMS (approximately one 
call per month). Failure to attend more than one call per year would 
result in the removal of the EHR data submission vendor from the 2012 
EHR qualification process.
     Have access to the identity management system specified by 
CMS (such as, but not limited to, the Individuals Authorized Access to 
CMS Computer Systems, or IACS) to submit clinical quality data 
extracted to a CMS clinical data warehouse.
     Submit a test file containing dummy Medicare clinical 
quality data to a CMS clinical data warehouse via an identity 
management system specified by CMS during a timeframe specified by CMS. 
In 2011, the requirement to submit a test file could have contained 
real or dummy data. However, for privacy reasons, we have decided to 
only provide for the submission of test files containing dummy data. We 
have proposed revisions to 42 CFR 414.90 to reflect this change.
     Submit a file containing the eligible professional's 2012 
Physician Quality Reporting System Medicare clinical quality data 
extracted from the EHR for the entire 12-month reporting period via the 
CMS-specified identify management system during the timeframe specified 
by us in early 2013.
     Provide at least 1 feedback report, based on the data 
submitted to them for the 2012 Physician Quality Reporting System 
incentive reporting period, and if technically feasible, provide at 
least 2 feedback reports throughout the year to participating eligible 
professionals.
     Be able to collect all needed data elements and transmit 
to CMS the data at the beneficiary level.
     Be able to separate out and report on Medicare Part B FFS 
patients.
     Provide the measure numbers for the quality measures on 
which the data submission vendor is reporting.
     Be able to transmit this data in a CMS-approved XML format 
utilizing a Clinical Document Architecture (CDA) standard such as 
Quality Reporting Data Architecture (QRDA).
     Comply with a CMS-specified secure method for data 
submission, such as submitting the EHR data submission vendor's data in 
an XML file through an identity management system specified by CMS or 
another approved method, such as use of appropriate NwHIN (Nationwide 
Health Information Network) specifications, if technically feasible.
     Enter into and maintain with its participating 
professionals an appropriate Business Associate agreement that provides 
for the data submission vendor's receipt of patient-specific data from 
the eligible professionals, as well as the data submission vendor's 
disclosure of patient-specific data on Medicare beneficiaries on behalf 
of eligible professionals who wish to participate in the Physician 
Quality Reporting System.
     Obtain and keep on file signed documentation that each 
holder of an NPI whose data are submitted to the data submission vendor 
has authorized the data submission vendor to submit patient-specific 
data on Medicare beneficiaries to CMS for the purpose of Physician 
Quality Reporting System participation. This documentation must be 
obtained at the time the eligible professional signs up with the data 
submission vendor to submit Physician Quality Reporting System quality 
measures data to the data submission vendor and must meet any 
applicable laws, regulations, and contractual business associate 
agreements.
     Provide CMS access (upon request for health oversight 
purposes like validation) to review the Medicare beneficiary data on 
which 2012 Physician Quality Reporting System EHR-Based submissions are 
founded or provide to CMS a copy of the actual data (upon request).
     Provide CMS a signed, written attestation statement via 
mail or e-mail

[[Page 42848]]

which states that the quality measure results and any and all data 
including numerator and denominator data provided to CMS are accurate 
and complete.
     Use Physician Quality Reporting System measure 
specifications and the CMS provided measure calculation algorithm, or 
logic, to calculate reporting rates or performance rates unless 
otherwise stated. CMS would provide EHR data submission vendors a 
standard set of logic to calculate each measure and/or measures group 
they intend to report in 2012.
     Provide a calculated result using the CMS supplied measure 
calculation logic and XML file for each measure that the EHR data 
submission vendor intends to calculate. The data submission vendors 
would be required to show that they can calculate the proper measure 
results (that is, reporting and performance rates) using the CMS-
supplied logic and send the calculated data back to CMS in the 
specified format.
    For EHR data submission vendors participating in the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot for 2012 
(discussed in section IV.H. of this proposed rule) and wish to also 
submit Medicare clinical quality data extracted from an EHR for the 
purposes of the 2012 Physician Quality Reporting System incentive, we 
propose that these EHR data submission vendors meet the following below 
requirements in addition to the requirements stated above:
     Be able to collect all needed data elements and transmit 
to CMS the data at the TIN/NPI level.
     Be able to calculate and submit measure-level reporting 
rates or, upon request, the data elements needed to calculate the 
reporting rates by TIN/NPI.
     Be able to calculate and submit, by TIN/NPI, a performance 
rate (that is, the percentage of a defined population who receive a 
particular process of care or achieve a particular outcome based on a 
calculation of the measure's numerator and denominator specifications) 
for each measure on which the TIN/NPI reports or, upon request the 
Medicare beneficiary data elements needed to calculate the reporting 
rates.
     Report the number of eligible instances (reporting 
denominator).
     Report the number of instances a quality service is 
performed (reporting numerator).
     Report the number of performance exclusions, meaning the 
quality action was not performed for a valid reason as defined by the 
measure specification.
     Report the number of reported instances, performance not 
met (eligible professional receives credit for reporting, not for 
performance), meaning the quality action was not performed for no valid 
reason as defined by the measure specification.
     Be able to transmit this data in a CMS-approved XML 
format.
     Submit an acceptable ``validation strategy'' to CMS by 
March 31, 2012. A validation strategy ascertains whether eligible 
professionals have submitted accurately and on at least the minimum 
number (80 percent) of their eligible patients, visits, procedures, or 
episodes for a given measure, which, as described in section (e)(2) of 
this section, is the minimum percentage of patients on which an 
eligible professional must report on any given measure. Acceptable 
validation strategies often include such provisions as the EHR data 
submission vendor being able to conduct random sampling of their 
participant's data, but may also be based on other credible means of 
verifying the accuracy of data content and completeness of reporting or 
adherence to a required sampling method.
     Perform the validation outlined in the strategy and send 
the results to CMS by June 30, 2013 for the 2012 reporting year's data.
     Enter into and maintain with its participating 
professionals an appropriate Business Associate agreement that provides 
for the data submission vendor's receipt of patient-specific data from 
the eligible professionals, as well as the data submission vendor's 
disclosure of quality measure results and numerator and denominator 
data on Medicare beneficiaries on behalf of eligible professionals who 
wish to participate in the Physician Quality Reporting System.
     Obtain and keep on file signed documentation that each 
holder of an NPI whose data are submitted to the data submission vendor 
has authorized the data submission vendor to submit quality measure 
results and numerator and denominator data on Medicare beneficiaries to 
CMS for the purpose of Physician Quality Reporting System 
participation. This documentation must be obtained at the time the 
eligible professional signs up with the data submission vendor to 
submit Physician Quality Reporting System quality measures data to the 
data submission vendor and must meet any applicable laws, regulations, 
and contractual business associate agreements.
     Use Physician Quality Reporting System measure 
specifications and the CMS provided measure calculation algorithm, or 
logic, to calculate reporting rates or performance rates unless 
otherwise stated.
     Provide a calculated result using the CMS supplied measure 
calculation logic and XML file for each measure that the EHR data 
submission vendor intends to calculate. The data submission vendors 
would be required to show that they can calculate the proper measure 
results (that is, reporting and performance rates) using the CMS-
supplied logic and send the calculated data back to CMS in the 
specified format.
    We cannot, however, assume responsibility for the successful 
submission of data from eligible professionals' EHRs. In addition, 
eligible professionals who decide to submit the Physician Quality 
Reporting System measures directly from his or her EHR should begin 
attempting submission soon after the opening of the clinical data 
warehouse in order to assure the eligible professional has a reasonable 
period of time to work with his or her EHR and/or its vendors to 
correct any problems that may complicate or preclude successful quality 
measures data submission through that EHR.
    We propose that for 2012, the EHR data submission vendor would 
submit clinical quality data on Medicare beneficiaries extracted from 
eligible professionals' EHRs to our designated database for the 
Physician Quality Reporting System using a CMS-specified record layout, 
which would be provided to the EHR data submission vendor by CMS. In 
addition, for purposes of also reporting 2012 Physician Quality 
Reporting System quality measures, the EHR data submission vendor would 
be required to submit patient level Medicare clinical quality data 
extracted from the eligible professional's EHR using the same CMS-
specified record layout that qualified EHR products must be able to 
produce for purposes of an eligible professional directly submitting 
the 2012 Physician Quality Reporting System EHR measures to CMS.
    We invite public comment on the proposed qualification requirements 
for EHR data submission vendors.
(C) Proposed Qualification Requirements for EHR Direct and Data 
Submission Vendors and Their Products for the 2013 Physician Quality 
Reporting System
    As in prior years, unlike the qualification process for registries, 
EHR vendors, which include direct EHR vendors and EHR data submission 
vendors, are tested for qualification a year ahead of the program year 
in which the EHR vendor intends to submit Physician Quality Reporting 
System quality measures on behalf of individual

[[Page 42849]]

eligible professionals or where its product(s) are available for use by 
eligible professionals to submit Physician Quality Reporting System 
measures directly to CMS.
    We propose EHR vendor testing for the 2013 Physician Quality 
Reporting System program year to qualify new EHR vendors and EHR data 
submission vendors and their EHR products for submission of Medicare 
beneficiary quality data extracted from EHR products to the CMS 
Medicare clinical quality data warehouse for the 2013 Physician Quality 
Reporting System. Specifically, we propose that in order for EHR 
vendors to be qualified to report 2013 Physician Quality Reporting 
System data to CMS, EHR vendors must meet the following requirements:
     Not be in a beta test form.
     Be in existence as of January 1, 2012.
     Have at least 25 active users.
     Participate in ongoing Physician Quality Reporting 
mandatory support conference calls hosted by CMS (approximately one 
call per month). Failure to attend more than one call per year would 
result in the removal of the EHR data submission vendor from the 2012 
EHR qualification process.
     Indicate the reporting option the vendor seeks to qualify 
for its users to submit in addition to individual measures.
     Have access to the identity management system specified by 
CMS (such as, but not limited to, the Individuals Authorized Access to 
CMS Computer Systems, or IACS) to submit Medicare clinical quality data 
extracted to a CMS clinical data warehouse.
     Submit a test file containing dummy Medicare clinical 
quality data to a CMS clinical data warehouse via an identity 
management system specified by CMS during a timeframe specified by CMS. 
In 2011, the requirement to submit a test file could have contained 
real or dummy data. However, for privacy reasons, we have decided to 
only provide for the submission of test files containing dummy data. We 
have proposed revisions to 42 CFR 414.90 to reflect this change.
     Submit a file containing the eligible professional's 2012 
Physician Quality Reporting System Medicare clinical quality data 
extracted from the EHR for the entire 12-month reporting period via the 
CMS-specified identify management system during the timeframe specified 
by us in early 2013.
     Provide at least 1 feedback report, based on the data 
submitted to them for the 2012 Physician Quality Reporting System 
incentive reporting period, and if technically feasible, provide at 
least two feedback reports throughout the year to participating 
eligible professionals.
     Be able to collect all needed data elements and transmit 
to CMS the data at the beneficiary level.
     Be able to separate out and report on Medicare Part B FFS 
patients.
     Provide the measure numbers for the quality measures on 
which the data submission vendor is reporting.
     Be able to transmit this data in a CMS-approved XML format 
utilizing a Clinical Document Architecture (CDA) standard such as 
Quality Reporting Data Architecture (QRDA).
     Comply with a CMS-specified secure method for data 
submission, such as submitting the EHR vendor's data in an XML file 
through an identity management system specified by CMS or another 
approved method, such as use of appropriate NwHIN (Nationwide Health 
Information Network) specifications, if technically feasible.
     Enter into and maintain with its participating 
professionals an appropriate Business Associate agreement that provides 
for the data submission vendor's receipt of patient-specific data from 
the eligible professionals, as well as the data submission vendor's 
disclosure of patient-specific data on Medicare beneficiaries on behalf 
of eligible professionals who wish to participate in the Physician 
Quality Reporting System.
     Obtain and keep on file signed documentation that each 
holder of an NPI whose data are submitted to the data submission vendor 
has authorized the data submission vendor to submit patient-specific 
data on Medicare beneficiaries to CMS for the purpose of Physician 
Quality Reporting System participation. This documentation must be 
obtained at the time the eligible professional signs up with the data 
submission vendor to submit Physician Quality Reporting System quality 
measures data to the data submission vendor and must meet any 
applicable laws, regulations, and contractual business associate 
agreements.
     Provide CMS access (upon request for health oversight 
purposes like validation) to review the Medicare beneficiary data on 
which 2012 Physician Quality Reporting System EHR-Based submissions are 
founded or provide to CMS a copy of the actual data (upon request).
     Provide CMS a signed, written attestation statement via 
mail or e-mail which states that the quality measure results and any 
and all data including numerator and denominator data provided to CMS 
are accurate and complete.
     Use Physician Quality Reporting System measure 
specifications and the CMS provided measure calculation algorithm, or 
logic, to calculate reporting rates or performance rates unless 
otherwise stated. CMS would provide EHR vendors a standard set of logic 
to calculate each measure and/or measures group they intend to report 
in 2012.
     Provide a calculated result using the CMS supplied measure 
calculation logic and XML file for each measure that the EHR vendor 
intends to calculate. The data submission vendors would be required to 
show that they can calculate the proper measure results (that is, 
reporting and performance rates) using the CMS-supplied logic and send 
the calculated data back to CMS in the specified format.
    This is the same self-nomination process described in the 
``Requirements for Electronic Health Record (EHR) Vendors to 
Participate in the 2012 Physician Quality Reporting System EHR 
Program,'' posted on the Physician Quality Reporting System section of 
the CMS Web site at http://www.cms.gov/PQRS/20_AlternativeReportingMechanisms.asp#TopOfPage. For 2013, we propose that 
these requirements would apply not only for the purpose of a vendor's 
EHR product being qualified so that the product's users may submit 2013 
Medicare beneficiary data extracted from the EHR for the 2013 Physician 
Quality Reporting System in 2014, but also for the purpose of a 
vendor's EHR product being qualified to electronically submit Medicare 
beneficiary data extracted from the EHR for reporting the electronic 
prescribing measure for the eRx Incentive Program 2013 incentive and 
2014 payment adjustment. Similarly, we propose that requirements would 
apply not only for the purposes of an EHR data submission vendor being 
qualified to submit 2013 Medicare beneficiary data from eligible 
professionals' EHRs for the 2013 Physician Quality Reporting System in 
2014 but also for the purpose of an EHR data submission vendor being 
qualified to electronically submit Medicare beneficiary data extracted 
from the EHR for reporting the electronic prescribing measure for the 
eRx Incentive Program 2013 incentive and 2014 payment adjustment.
    We propose that if an EHR vendor misses more than one mandatory 
support call or meeting, the vendor and their product and/or EHR data 
submission vendor would be disqualified for the Physician Quality 
Reporting System reporting year, which is covered by the call.

[[Page 42850]]

    For the 2013 Physician Quality Reporting System, we propose that 
previously qualified and new vendors and/or EHR data submission vendors 
would need to incorporate any new EHR measures (that is, 
electronically-specified measures), as well as update their electronic 
measure specifications and data transmission schema should either or 
both change, finalized for to the Physician Quality Reporting System 
for 2013 if they wish to maintain their Physician Quality Reporting 
System qualification.
    We further propose that any EHR vendor interested in having one or 
more of their EHR products ``qualified'' to submit quality data 
extracted from their EHR products to the CMS Medicare clinical quality 
data warehouse for the 2013 Physician Quality Reporting System would be 
required to submit their self-nomination statement by January 31, 2012. 
Whereas, in prior program years, EHR vendors have submitted self-
nomination statements via mail, we propose to have EHR vendors submit 
self-nomination statements via a Web-based tool, if technically 
feasible for us to develop such a tool. We believe use of a Web-based 
tool to self-nominate is a more efficient method of collecting self-
nomination statements. However, if use of a Web-based tool is not 
technically feasible, as in prior years, EHR vendors will submit self-
nomination statements via e-mail. We expect to post instructions for 
submitting the self-nomination statement and the 2013 EHR vendor 
requirements in the 4th quarter of CY 2011. Specifically, for the 2013 
Physician Quality Reporting System, in order to ensure EHR vendors' 
interest in participating in the 2013 Physician Quality Reporting 
System, we propose that only EHR vendors that self-nominate to 
participate in the EHR Program testing during calendar year 2012 would 
be considered qualified EHR vendors for the 2013 Physician Quality 
Reporting System.
    We invite public comment on the proposed qualification requirements 
for EHR vendors and their products for the 2013 Physician Quality 
Reporting System.
e. Incentive Payments for the 2012 Physician Quality Reporting System
    In accordance with 42 CFR 414.90(c)(3), eligible professionals that 
satisfactorily report 2012 Physician Quality Reporting System measures 
can qualify for an incentive equal to 0.5 percent of the total 
estimated part B allowed charges for all covered professional services 
furnished by the eligible professional (or, in the case of a group 
practice participating in the GPRO, the group practice) during the 
applicable reporting period. We are proposing to modify the incentive 
payment language in 42 CFR 414.90 to provide language more consistent 
with section 1848(k) of the Act.
(1) Proposed Criteria for Satisfactory Reporting of Individual Quality 
Measures for Individual Eligible Professionals via Claims
    Section 1848(m)(3)(A) of the Act established the criteria for 
satisfactorily submitting data on individual quality measures as at 
least three measures in at least 80 percent of the cases in which the 
measure is applicable. For claims-based reporting, if fewer than three 
measures are applicable to the services of the professional, the 
professional may meet the criteria by submitting data on one or two 
measures for at least 80 percent of applicable cases where the measures 
are reportable. For years after 2009, section 1848(m)(3)(D) of the Act 
authorizes the Secretary, in consultation with stakeholders and 
experts, to revise the criteria for satisfactorily reporting data on 
quality measures. Accordingly, we propose the following criteria for 
satisfactory reporting via the claims-based reporting mechanism for 
individual eligible professionals specializing in internal medicine, 
family practice, general practice, or cardiology:
     Report on at least one Physician Quality Reporting System 
core measure as identified in Table 29.
     Report on at least two additional measures that apply to 
the services furnished by the professional.
     Report each measure for at least 50 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    For all other eligible professionals, we propose the following 
criteria for satisfactory reporting via the claims-based reporting 
mechanism:
     Report on at least three measures that apply to the 
services furnished by the professional.
     Report each measure for at least 50 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    We believe it would be easier for eligible professionals to find 
applicable measures on which to report if measures were grouped 
according its applicability to medical specialties. We then seek to 
move towards having specialties report on certain measures that are 
relevant to the respective specialty. We have recognized the promotion 
of the prevention of cardiovascular conditions as a top priority and 
therefore propose to start to group individual measures with measures 
that promote cardiovascular care. As such, the Physician Quality 
Reporting System core measures that we propose in Table 29 are aimed at 
promoting the prevention of cardiovascular conditions. In an effort to 
promote the prevention of cardiovascular conditions, we are proposing 
that eligible professionals specializing in internal medicine, family 
practice, general practice, or cardiology be required to report on at 
least one proposed Physician Quality Reporting System core measure. We 
chose the aforementioned specialties because we believe the Physician 
Quality Reporting System core measures are most relevant to those 
specialties. Since we believe that eligible professionals in those 
specialties would likely report on the proposed Physician Quality 
Reporting System core measures regardless of the proposed requirement 
to report on at least one Physician Quality Reporting System core 
measure, we believe that the this requirement would not result in an 
increased burden to these specialties. In future years, we hope to 
develop a similar reporting requirement and core set of measures for 
other specialties.
    We also considered including geriatricians in the proposed 
Physician Quality Reporting System core measure reporting requirement 
for 2012. However, we would like to ensure that the proposed 2012 
Physician Quality Reporting System core measures would be sufficiently 
applicable to geriatric physicians before making such a proposal. We 
seek public comment as to whether geriatricians should be included as a 
specialty required to report at least one proposed 2012 Physician 
Quality Reporting System core measure. In addition, we invite public 
comment on whether other specialties should be included in the 2012 
Physician Quality Reporting System proposed core measure reporting 
requirement.
    As stated previously, we have proposed the requirement of the 
reporting of Physician Quality Reporting System core measures for 
certain specialties to introduce measures reporting according to 
specialty for eligible professionals specializing in internal medicine, 
family practice, general practice, or cardiology. However, we are not 
proposing this core measure requirement for all other specialties. 
Therefore, for all other specialties, we are proposing to retain 
similar reporting criteria as finalized for the in the 2011 MPFS final 
rule.

[[Page 42851]]

Specifically, under our authority under section 1848(m)(3)(D) of the 
Act to revise the reporting criteria for satisfactory reporting, for 
all other eligible professionals, we propose the following criteria for 
satisfactory reporting via the claims-based reporting mechanism:
     Report on at least three measures that apply to the 
services furnished by the professional. Report each measure for at 
least 50 percent of the eligible professional's Medicare Part B FFS 
patients for whom services were furnished during the reporting period 
to which the measure applies.
    To the extent that an eligible professional has fewer than three 
Physician Quality Reporting System measures that apply to the eligible 
professional's services and the eligible professional is reporting via 
the claims-based reporting mechanism, we propose that the eligible 
professional would be able to meet the criteria for satisfactorily 
reporting data on individual quality measures by meeting the following 
two criteria--
     Report on all measures that apply to the services 
furnished by the professional (that is one to two measures); and
     Report each measure for at least 50 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    As in prior years, we also propose that, for 2012, an eligible 
professional may also report on fewer than three measures, if less than 
three apply. However, an eligible professional who reports on fewer 
than three measures through the claims-based reporting mechanism may be 
subject to the Measure Applicability Validation (MAV) process, which 
would allow us to determine whether an eligible professional should 
have reported quality data codes for additional measures. This process 
was applied in prior years, including the 2011 Physician Quality 
Reporting System. Under the proposed MAV process, when an eligible 
professional reports on fewer than 3 measures, we propose to review 
whether there are other closely related measures (such as those that 
share a common diagnosis or those that are representative of services 
typically provided by a particular type of eligible professional). We 
further propose that if an eligible professional who reports on fewer 
than 3 measures in 2012 reports on a measure that is part of an 
identified cluster of closely related measures and did not report on 
any other measure that is part of that identified cluster of closely 
related measures, then the eligible professional would not qualify as a 
satisfactory reporter in the 2012 Physician Quality Reporting System or 
earn an incentive payment. We propose that these criteria for 
satisfactorily reporting data on fewer than three individual quality 
measures would apply for the claims-based reporting mechanism only 
because, unlike registry and EHR-Based reporting, the reporting of 
Physician Quality Reporting System quality measures via claims is not 
handled by an intermediary but rather directly by the eligible 
professional.
    For 2012, in order to encourage reporting on measures that are 
applicable to the eligible professional's practice as well as encourage 
eligible professionals to perform the clinical quality actions 
specified in the measures, we propose not to count measures that are 
reported through claims that have a 0 percent performance rate. That 
is, if the recommended clinical quality action, as indicated in the 
numerator of the quality measure, is not performed on at least one 
patient for a particular measure or measures group reported by the 
eligible professional via claims, we will not count the measure (or 
measures group) as a measure (or measures group) reported by an 
eligible professional. This requirement is also consistent with the 
proposed registry and EHR-Based reporting (see the following section 
(e)(3)) criteria for satisfactory reporting that are proposed in this 
section.
    The proposed 2012 criteria for satisfactory reporting of data on 
individual Physician Quality Reporting System quality measures for 
individual eligible professionals are summarized in the following 
Tables 18 and 2, and are arranged by reporting mechanism and reporting 
period.

  Table 18--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
  System Quality Measures Via Claims for the Following Specialties: Internal Medicine Family Practice, General
                                            Practice, and Cardiology
----------------------------------------------------------------------------------------------------------------
        Reporting mechanism                         Reporting criteria                     Reporting period
----------------------------------------------------------------------------------------------------------------
Claims[dash]based reporting........   Report at least three Physician         January 1, 2012-December
                                      Quality Reporting System measures, which         31, 2012.
                                      consist of one Physician Quality Reporting
                                      System core measure + 2 additional measures of
                                      the eligible professional's choosing; OR.
                                      If less than three measures apply to
                                      the eligible professional, 1-2 measures, of
                                      which at least 1 measure must consist of a
                                      Physician Quality Reporting System core
                                      measure; AND
                                      Report each measure for at least 50%
                                      of the eligible professional's Medicare Part B
                                      FFS patients seen during the reporting period
                                      to which the measure applies.
                                      Measures with a 0% performance rate
                                      will not be counted.
----------------------------------------------------------------------------------------------------------------


[[Page 42852]]


  Table 19--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
       System Quality Measures Via Claims for All Other Eligible Professionals Not Identified in Table 18
----------------------------------------------------------------------------------------------------------------
        Reporting mechanism                         Reporting criteria                     Reporting period
----------------------------------------------------------------------------------------------------------------
Claims-based reporting.............   Report at least three Physician         January 1, 2012-December
                                      Quality Reporting System measures; OR            31, 2012.
                                      If less than three measures apply to
                                      the eligible professional, 1-2 measures; AND.
                                      Report each measure for at least 50%
                                      of the eligible professional's Medicare Part B
                                      FFS patients seen during the reporting period
                                      to which the measure applies..
                                      Measures with a 0% performance rate
                                      will not be counted..
----------------------------------------------------------------------------------------------------------------

    We invite public comment on the proposed criteria for satisfactory 
reporting of individual measures by individual eligible professionals 
via claims for the 2012 Physician Quality Reporting System.
    (2) Proposed 2012 Criteria for Satisfactory Reporting of Individual 
Quality Measures for Individual Eligible Professionals via Registry
    Under our authority of section 1848(m)(3)(D) of the Act to revise 
the reporting criteria for the satisfactory reporting of measures, we 
propose the following criteria for satisfactory reporting via the 
registry-based reporting mechanism: (1) Criteria for individual 
eligible professionals practicing in internal medicine, family 
practice, general practice, or cardiology and (2) criteria for all 
other eligible professionals. For the reasons stated previously, we are 
distinguishing eligible professionals in internal medicine, family 
practice, general practice, or cardiology from all other eligible 
professionals for the purposes of establishing criteria for 
satisfactory reporting. Therefore, for eligible professionals 
specializing in internal medicine, family practice, general practice, 
or cardiology, we propose the following criteria for satisfactory 
reporting:
     Report on at least one Physician Quality Reporting System 
core measure as identified in Table 29.
     Report on at least two additional measures that apply to 
the services furnished by the professional.
     Report each measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    For the same reasons stated for establishing different reporting 
criteria for all other eligible professionals under the claims-based 
reporting mechanism, we propose the following criteria for satisfactory 
reporting via the registry-based reporting mechanism:
     Report on at least three measures that apply to the 
services furnished by the professional.
     Report each measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    We also considered including geriatricians in the proposed 
Physician Quality Reporting System core measure reporting requirement 
via the registry-based reporting mechanism for 2012. However, as stated 
previously, we would like to ensure that the proposed 2012 Physician 
Quality Reporting System core measures would be sufficiently applicable 
to geriatric physicians before making such a proposal. We seek public 
comment as to whether geriatricians should be included as a specialty 
required to report at least one proposed 2012 Physician Quality 
Reporting System core measure. In addition, we seek public comment on 
whether other specialties should be included in the 2012 Physician 
Quality Reporting System proposed core measure reporting requirement.
    In addition, as in prior years, for 2012, we propose not to count 
measures that are reported through registries that have a 0 percent 
performance rate, calculated by dividing the measure's numerator by the 
measure's denominator. That is, if the recommended clinical quality 
action, that is the action denoted in the quality measure's numerator, 
is not performed on at least one patient for a particular measure or 
measures group reported by the eligible professional via registry, we 
will not count the measure (or measures group) as a measure (or 
measures group) reported by an eligible professional. We propose to 
disregard measures (or measures groups) that are reported through a 
registry that have a 0 percent performance rate in the 2012 Physician 
Quality Reporting System, because we are assuming that the measure was 
not applicable to the eligible professional and was likely reported 
from EHR-derived data (or from data mining) and was unintentionally 
submitted from the registry to us. We also seek to avoid the 
possibility of intentional submission of spurious data solely for the 
purpose of receiving an incentive payment for reporting.
    The proposed 2012 criteria for satisfactory reporting of data on 
individual Physician Quality Reporting System quality measures for 
individual eligible professionals are summarized in the following 
Tables 20 and 21, and are arranged by reporting mechanism and reporting 
period.

[[Page 42853]]



  Table 20--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
 System Quality Measures Via Registry for the Following Specialties: Internal Medicine Family Practice, General
                                            Practice, and Cardiology
----------------------------------------------------------------------------------------------------------------
        Reporting mechanism                         Reporting criteria                     Reporting period
----------------------------------------------------------------------------------------------------------------
Registry[dash]based reporting......   Report at least three Physician         January 1, 2012--December
                                      Quality Reporting System measures, which         31, 2012.
                                      consist of 1 Physician Quality Reporting
                                      System core measure + 2 additional measures of
                                      the eligible professional's choosing AND
                                      Report each measure for at least 80%
                                      of the eligible professional's Medicare Part B
                                      FFS patients seen during the reporting period
                                      to which the measure applies.
                                      Measures with a 0% performance rate
                                      will not be counted..
----------------------------------------------------------------------------------------------------------------


  Table 21--Proposed 2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting
      System Quality Measures Via Registry for All Other Eligible Professionals Not Identified in Table 20
----------------------------------------------------------------------------------------------------------------
        Reporting mechanism                         Reporting criteria                     Reporting period
----------------------------------------------------------------------------------------------------------------
Registry[dash]based reporting......   Report at least three Physician         January 1, 2012--December
                                      Quality Reporting System measures AND            31, 2012.
                                      Report each measure for at least 80%
                                      of the eligible professional's Medicare Part B
                                      FFS patients seen during the reporting period
                                      to which the measure applies.
                                      Measures with a 0% performance rate
                                      will not be counted.
----------------------------------------------------------------------------------------------------------------

    We invite public comment on the proposed criteria for satisfactory 
reporting of individual quality measures for individual eligible 
professionals via registry.(3) Proposed Criteria for Satisfactory 
Reporting of Individual Quality Measures for Individual Eligible 
Professionals via EHR
    Section 1848(m)(3)(A) of the Act established the criteria for 
satisfactorily submitting data on individual quality measures as at 
least three measures in at least 80 percent of the cases in which the 
measure is applicable. For years after 2009, section 1848(m)(3)(D) of 
the Act authorizes the Secretary, in consultation with stakeholders and 
experts, to revise the criteria for satisfactorily reporting data on 
quality measures. Accordingly, we propose the following options for 
satisfactory reporting of individual quality measures by individual 
eligible professionals participating in the 2012 Physician Quality 
Reporting System via the EHR-Based reporting mechanism:
    First, we propose that an eligible professional would meet the 
criteria for satisfactory reporting under the Physician Quality 
Reporting System if the eligible professional, using a Physician 
Quality Reporting System ``qualified'' EHR product (if the eligible 
professional is also participating in the EHR Incentive Program via the 
proposed Physician Quality Reporting System-EHR Incentive Pilot 
discussed in section IV.H. of this proposed rule, the eligible 
professional's EHR product must also be Certified EHR Technology), 
reports on three proposed core measures for 80 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which each measure applies as identified in Table 31 in this 
section of this proposed rule, which are identical to the Medicare EHR 
Incentive Program core measures included in Table 7 of the Medicare and 
Medicaid EHR Incentive Program final rule (75 FR 44410). Insofar as the 
denominator for one or more of the core measures is 0, implying that 
the eligible professional's patient population is not addressed by 
these measures, we propose that eligible professionals would be 
required to report up to three proposed alternate core measures as 
identified in Table 31 in this section of this proposed rule and which 
are identical to the Medicare EHR Incentive Program alternate core 
measures included in Table 7 of the Medicare and Medicaid EHR Incentive 
Program final rule (75 FR 44410). In addition, we propose that the 
eligible professional would be required to report on three additional 
measures of their choosing that are available for the Medicare EHR 
Incentive Program in Table 6 of the Medicare and Medicaid EHR Incentive 
Program final rule (75 FR 44398 through 44408) (as identified in Table 
31 in this section of this proposed rule).
    With respect to reporting on the proposed measure titled 
``Preventive Care and Screening: Body Mass Index (BMI) Screening and 
Follow-up'', listed in Table 31 of this proposed rule, there are two 
parameters in the measure denominator description: Age 65 and older BMI 
and Age 18-64 BMI. For the purpose of reporting this measure under the 
Physician Quality Reporting System, we propose to count the reporting 
of this measure if at least one of the two parameters does not contain 
a 0 percent performance rate. In addition, with respect to reporting on 
the proposed measure titled ``Preventive Care and Screening: Tobacco 
Use: Screening and Cessation Intervention'', also listed in Table 31 of 
this proposed rule, the measure is divided into two pairs: a. Tobacco 
Use Assessment and b. Tobacco Cessation Intervention. For the purpose 
of reporting this measure under the Physician Quality Reporting System, 
we propose to count the reporting of this measure if at least one of 
the two pairs does not contain a 0 percent performance rate.
    Section 1848(m)(7) of the Act (``Integration of Physician Quality 
Reporting and EHR Reporting''), as added by section 3002(d) of the 
Affordable Care Act, requires us to move towards the integration of EHR 
measures with respect to the Physician Quality Reporting System. 
Section 1848(m)(7) of the Act specifies that by no later than January 
1, 2012, the Secretary shall develop a plan to integrate reporting on 
quality measures under the Physician Quality Reporting System with 
reporting requirements under subsection (o) of section 1848 of the Act 
relating to the meaningful use of EHRs. Such integration shall consist 
of the following:
    (A) The selection of measures, the reporting of which would both 
demonstrate--

[[Page 42854]]

    (i) Meaningful use of an EHR for purposes of the Medicare EHR 
Incentive Program; and
    (ii) Quality of care furnished to an individual; and
    (B) Such other activities as specified by the Secretary.
    We propose the aforementioned criteria for satisfactory reporting 
via an EHR, which is identical to the criteria for achieving meaningful 
use for reporting clinical quality measures under the EHR Incentive 
Program as finalized in the Medicare and Medicaid Electronic Health 
Record Incentive Program final rule (75 FR 44409 through 44411), in an 
effort to align the Physician Quality Reporting System with the 
Medicare EHR Incentive Program.
    In addition to the reporting criteria proposed previously, we 
propose alternative reporting criteria for satisfactory reporting using 
the EHR-Based reporting mechanism that is similar to the criteria 
finalized in the CY 2011 MPFS Final Rule with comment period (75 FR 
73497 through 73500). For the reasons set forth for establishing 
different criteria for satisfactory reporting via claims and registry, 
we are adopting two different criteria for satisfactory reporting, 
depending on an eligible professional's specialty. For eligible 
professionals specializing in internal medicine, family practice, 
general practice, and cardiology, we propose the following criteria:
     Report on ALL proposed Physician Quality Reporting System 
core measure as identified in Table 29.
     Report each measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    We understand that by proposing to require eligible professionals 
specializing in internal medicine, family practice, general practice, 
and cardiology to report all Physician Quality Reporting System core 
measures, we would be requiring such professionals to report more 
measures than eligible professionals who do not practice within those 
specialties. We believe, however, that proposing to require these 
specialists to report of all Physician Quality Reporting System core 
measures would not add an additional burden to these eligible 
professionals because the reporting of measures is done entirely 
through the EHR. Furthermore, because we are proposing to require these 
specialties to report on all Physician Quality Reporting System core 
measures and recognize that some of the proposed Physician Quality 
Reporting System core measures may not be applicable to all of these 
eligible professionals' specialties, we propose to allow the reporting 
of these proposed Physician Quality Reporting System core measures with 
a 0 percent performance rate. That is, the reporting of a Physician 
Quality Reporting System core measure that is not applicable to the 
eligible professional's practice in this instance will not preclude an 
eligible professional from meeting the criteria for satisfactory 
reporting.
    We also considered including geriatricians in the proposed 
Physician Quality Reporting System core measure reporting requirement 
for 2012. However, we would like to ensure that the proposed 2012 
Physician Quality Reporting System core measures would be sufficiently 
applicable to geriatric physicians before making such a proposal. We 
seek public comment as to whether geriatricians should be included as a 
specialty required to report at least one proposed 2012 Physician 
Quality Reporting System core measure via EHR-Based reporting. In 
addition, we invite public comment on whether other specialties should 
be included in the 2012 Physician Quality Reporting System proposed 
core measure reporting requirement.
    For the reasons we stated previously for creating separate 
reporting criteria all other eligible professionals for claims and 
registry reporting, we propose the following criteria for satisfactory 
reporting using the EHR-Based reporting mechanism:
     Report on at least three Physician Quality Reporting 
System EHR measures of the eligible professional's choosing; and
     Report each measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients for whom services 
were furnished during the reporting period to which the measure 
applies.
    The proposed methods for satisfactory reporting via EHR for the 
2012 Physician Quality Reporting System are described in the following 
Tables 22 and 23.

   Table 22--2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting System
  Quality Measures via EHR for the Following Specialties: Internal Medicine, Family Practice, General Practice,
                                                 and Cardiology
----------------------------------------------------------------------------------------------------------------
        Reporting mechanism                         Reporting criteria                     Reporting period
----------------------------------------------------------------------------------------------------------------
EHR--Aligning with the Medicare EHR   Reports on ALL three Medicare EHR       January 1, 2012-December
 Incentive Program.                   Incentive Program core measures (as identified   31, 2012.
                                      in Table 31 of this proposed rule).
                                      If the denominator for one or more of
                                      the Medicare EHR Incentive Program core
                                      measures is 0, report on up to three Medicare
                                      EHR Incentive Program alternate core measures
                                      (as identified in Table 31 of this proposed
                                      rule); AND.
                                      Report on three (of the 38 additional
                                      measures available for the Medicare EHR
                                      Incentive Program.
EHR................................   Report on ALL Physician Quality         January 1, 2012-December
                                      Reporting System core measures AND               31, 2012.
                                      Report each measure for at least 80%
                                      of the eligible professional's Medicare Part B
                                      FFS patients seen during the reporting period
                                      to which the measure applies.
                                      Measures with a 0% performance rate
                                      will not be counted, unless the measure is a
                                      Physician Quality Reporting System core
                                      measure.
----------------------------------------------------------------------------------------------------------------


[[Page 42855]]


   Table 23--2012 Criteria for Satisfactory Reporting of Data on Individual Physician Quality Reporting System Quality Measures via EHR for All Other
                                                    Eligible Professionals Not Identified in Table 22
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Reporting mechanism                             Reporting criteria                                       Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
EHR--Aligning with the Medicare EHR        Reports on ALL three Medicare EHR           January 1, 2012-December 31, 2012.
 Incentive Program.                        Incentive Program core measures (as identified in
                                           Table 31 of this proposed rule).
                                           If the denominator for one or more of the
                                           Medicare EHR Incentive Program core measures is 0,
                                           report on up to three Medicare EHR Incentive
                                           Program alternate core measures (as identified in
                                           Table 31 of this proposed rule); AND
                                           Report on three (of the 38) additional
                                           measures available for the Medicare EHR Incentive
                                           Program.
EHR.....................................   Report at least three Physician Quality     January 1, 2012-December 31, 2012.
                                           Reporting System measures AND
                                           Report each measure for at least 80% of
                                           the eligible professional's Medicare Part B FFS
                                           patients seen during the reporting period to which
                                           the measure applies.
                                           Measures with a 0% performance rate will
                                           not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We invite public comment on the proposed criteria for satisfactory 
reporting of individual quality measures by individual eligible 
professionals via an EHR-Based reporting mechanism in the 2012 
Physician Quality Reporting System. (4) Proposed Criteria for 
Satisfactory Reporting of Measures Groups via Claims--Individual 
Eligible Professionals
    At Sec.  414.90(b) ``measures group'' is defined as ``a subset of 
four or more Physician Quality Reporting System measures that have a 
particular clinical condition or focus in common.'' For 2012 and 
beyond, we propose that individual eligible professionals have the 
option to report measures groups in addition to individual quality 
measures to qualify for the Physician Quality Reporting System 
incentive, using claims or registries.
    For the reasons we are proposing different criteria for 
satisfactorily reporting individual quality measures depending on 
specialty, specifically our desire to introduce core measures 
applicable to certain specialties and promote cardiovascular care, we 
are proposing two different criteria for satisfactorily reporting 
measures groups. We propose the following criteria for satisfactory 
reporting of 2012 Physician Quality Reporting System measures groups:
    We propose that eligible professionals specializing in internal 
medicine, family practice, general practice, and cardiology may meet 
the criteria for satisfactory reporting of Physician Quality Reporting 
System measures groups via claims by reporting in the following manner:
     Report at least one Physician Quality Reporting System 
measures group; and
     If the measures group does not contain at least one 
Physician Quality core measure, then one Physician Quality core 
measure; and
     For each measures group and, if applicable, Physician 
Quality Reporting System core measure reported, report on at least 30 
Medicare Part B FFS patients for each measures group that is reported.
     Measures groups containing a measure with a 0 percent 
performance rate will not be counted.
    We also propose that eligible professionals specializing in 
internal medicine, family practice, general practice, and cardiology 
may meet the criteria for satisfactorily reporting Physician Quality 
Reporting System measures groups via claims by reporting in the 
following manner:
     Report at least one Physician Quality Reporting System 
measures group; but
     If the measures group does not contain at least one 
Physician Quality Reporting System core measure, then one Physician 
Quality core measure.
     For each measures group and, if applicable, Physician 
Quality Reporting System core measure reported, report on at least 50 
percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to whom the measures group applies; 
but report no less than 15 Medicare Part B PFS patients for each 
measures group reported.
     Measures groups containing a measure with a 0 percent 
performance rate will not be counted.
    For all other eligible professionals, in order to meet the criteria 
for satisfactory reporting of Physician Quality Reporting measures 
groups via claims, we propose that the eligible professional must:
     Report at least one Physician Quality Reporting System 
measures group.
     Report on at least 30 Medicare Part B FFS patients for 
each measures group that is reported.
     Measures groups containing a measure with a 0 percent 
performance rate will not be counted.
    Alternatively, eligible professionals not specializing in internal 
medicine, family practice, general practice, and cardiology may meet 
the criteria for satisfactorily reporting Physician Quality Reporting 
System measures groups via claims by reporting in the following manner:
     Report at least one Physician Quality Reporting System 
measures group.
     For each measures group reported, report each on at least 
50 percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to whom the measures group applies; 
but
     Report no less than 15 Medicare Part B PFS patients for 
each measures group reported.
     Measures groups containing a measure with a 0 percent 
performance rate will not be counted.
    Aside from the Physician Quality Reporting System core measure 
reporting requirement for eligible professionals specializing in 
internal medicine, family practice, general practice, or cardiology, we 
are proposing to retain the same criteria for satisfactory reporting of 
measures groups via claims as the 2011 criteria for satisfactory 
reporting of measures groups via claims for the 12-month reporting 
period that was finalized in the 2011 MPFS Final Rule with comment 
period. Therefore, as in 2011, an eligible professional must 
satisfactorily report on all individual measures within the measures 
group in order to meet the criteria for satisfactory reporting via 
measures groups. We are retaining the same criteria because

[[Page 42856]]

eligible professionals are already familiar with these reporting 
criteria, which we believe will in turn lead to a greater chance that 
eligible professionals meet the criteria for satisfactory reporting.
    As with the reporting of Physician Quality Reporting System 
individual measures, we also considered including geriatricians as one 
of specialties we proposed previously with regard to the proposed 
Physician Quality Reporting System core measure reporting requirement 
for measures groups. However, we would like to ensure that the proposed 
2012 Physician Quality Reporting System core measures are sufficiently 
applicable to geriatric physicians before proposing to include them 
under the proposed requirement. We seek public comment as to whether 
geriatricians should be included as a specialty required to report at 
least 1 proposed 2012 Physician Quality Reporting System core measure 
for measures group reporting. In addition, we seek public comment on 
whether other specialties should be included in the 2012 Physician 
Quality Reporting System core measure reporting requirement for 
measures groups.
    For 2012, in order to ensure that the Physician Quality Reporting 
System measures on which eligible professionals report are applicable 
to their respective practices, we propose not to count measures within 
measures groups that are reported through claims or registry that have 
a 0 percent performance rate. That is, if the recommended clinical 
quality action is not performed on at least one patient for a 
particular measure reported by the eligible professional via claims or 
registry, we will not count the measures groups as a measures group 
reported by an eligible professional. Furthermore, this proposed 
requirement is consistent with the proposed reporting options for 
individual quality measures, which are discussed previously. Since we 
are proposing to retain the requirement that an eligible professional 
must satisfactorily report on all individual measures contained within 
a measures group in order to meet the criteria for satisfactory 
reporting via measures groups, if an eligible professional reports a 
measure contained within a measures group with a 0 percent performance 
rate, the eligible professional will fail to meet the criteria for the 
satisfactory reporting of measures groups.
    The 2012 proposed criteria for satisfactory reporting of measures 
groups via claims for individual eligible professionals are described 
in the following Tables 24 and 25.

   Table 24--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Claims for the Following Specialties: Internal Medicine, Family
                                                       Practice, General Practice, and Cardiology
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Reporting  mechanism                             Reporting criteria                                       Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Claims..................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           If the measures group does not contain at
                                           least 1 Physician Quality core measure, then
                                           report 1 Physician Quality core measure; AND.
                                           Report each measures group and, if
                                           applicable, Physician Quality Reporting System
                                           core measure for at least 30 Medicare Part B FFS
                                           patients.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Claims..................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           If the measures group does not contain at
                                           least 1 Physician Quality core measure, then
                                           report 1 Physician Quality core measure; AND.
                                           Report each measures group and, if
                                           applicable, Physician Quality Reporting System
                                           core measure for at least 50% of the eligible
                                           professional's Medicare Part B FFS patients seen
                                           during the reporting period to whom the measures
                                           group applies; BUT
                                           Report each measures group on no less than
                                           15 Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 25--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Claims for All Other Eligible Professionals Not Identified in Table
                                                                           24
--------------------------------------------------------------------------------------------------------------------------------------------------------
          Reporting  mechanism                             Reporting criteria                                       Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Claims..................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           Report each measures group for at least 30
                                           Medicare Part B FFS patients.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Claims..................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group;
                                           Report each measures group for at least
                                           50% of the eligible professional's Medicare Part B
                                           FFS patients seen during the reporting period to
                                           whom the measures group applies; BUT.

[[Page 42857]]

 
                                           Report each measures group on no less than
                                           15 Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    An eligible professional could also potentially qualify for the 
Physician Quality Reporting System incentive payment by satisfactorily 
reporting both individual measures and measures groups. However, only 
one incentive payment will be made to the eligible professional. We 
invite public comment on the proposed 2012 criteria for satisfactory 
reporting of measures groups via claims for individual eligible 
professionals.
(5) Proposed 2012 Criteria for Satisfactory Reporting of Measures 
Groups via Registry--Individual Eligible Professionals
    As with the reporting of measures groups via claims, we are 
proposing different criteria for the satisfactory reporting of 
Physician Quality Reporting System measures groups via registry 
depending on the eligible professional's specialty. For eligible 
professionals specializing in internal medicine, family practice, 
general practice, or cardiology, in order to meet the criteria for the 
satisfactory reporting of Physician Quality Reporting measures groups 
via registry, during the proposed 12-month reporting period, we propose 
that the eligible professional must--
     Report at least 1 Physician Quality Reporting System 
measures group; AND
     If the measures group does not contain at least 1 
Physician Quality core measure, then 1 Physician Quality core measure; 
AND
     Report on at least 30 Medicare Part B FFS patients for 
each measures group and, if applicable, Physician Quality Reporting 
System core measure reported.
     Measures groups containing a measure with a 0% performance 
rate will not be counted.
    Alternatively, we propose that the eligible professional 
specializing in internal medicine, family practice, general practice, 
or cardiology may meet the criteria for the satisfactory reporting of 
Physician Quality measures groups via registry by doing the following 
during the proposed 12-month reporting period:
     Report at least one Physician Quality Reporting System 
measures group; AND
     If the measures group does not contain at least 1 
Physician Quality core measure, then 1 Physician Quality core measure; 
AND
     Report each measures group and, if applicable, Physician 
Quality Reporting System core measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients seen during the 
reporting period to whom the measures group applies; BUT
     Report each measures group on no less than 15 Medicare 
Part B FFS patients seen during the reporting period to which the 
measures group applies.
     Measures groups containing a measure with a 0% performance 
rate will not be counted.
    In order to meet the criteria for the satisfactory reporting of 
Physician Quality Reporting measures groups via registry, during the 
proposed 6-month reporting period, we propose that theeligible 
professional must--
     Report at least one Physician Quality Reporting System 
measures group; AND
     If the measures group does not contain at least 1 
Physician Quality core measure, then 1 Physician Quality core measure; 
AND
     Report each measures group and, if applicable, Physician 
Quality Reporting System core measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients seen during the 
reporting period to whom the measures group applies; BUT
     Report each measures group on no less than 8 Medicare Part 
B FFS patients seen during the reporting period to which the measures 
group applies.
     Measures groups containing a measure with a 0% performance 
rate will not be counted.
    For all other eligible professionals, in order to meet the criteria 
for the satisfactory reporting of Physician Quality Reporting System 
measures groups via registry, we propose that, during the proposed 12-
month reporting period, the eligible professional must--
     Report at least 1 Physician Quality Reporting System 
measures group; AND
     Report each measures group for at least 30 Medicare Part B 
FFS patients.
     Measures groups containing a measure with a 0% performance 
rate will not be counted.
    Alternatively, we propose that an eligible professional not 
specializing in internal medicine, family practice, general practice, 
or cardiology may meet the criteria for the satisfactory reporting of 
Physician Quality Reporting System measures groups via registry by 
doing the following during the proposed 12-month reporting period:
     Report at least one Physician Quality Reporting System 
measures group; AND
     For each measures group reported, report on at least 80 
percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to whom the measures group applies; 
BUT
     Report no less than 15 patients for each measures group 
reported.
    For all other eligible professionals, in order to meet the criteria 
for the satisfactory reporting of Physician Quality Reporting System 
measures groups via registry during the proposed 6-month reporting 
period, we propose that, during the proposed 6-month reporting period, 
the eligible professional must--
     Report at least 1 Physician Quality Reporting System 
measures group; AND
     For each measures group reported, report on at least 80 
percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to whom the measures group applies; 
BUT
     Report each measures group on no less than least 8 
Medicare Part B FFS patients for each measures group reported.
     Measures groups containing a measure with a 0% performance 
rate will not be counted.
    Aside from the Physician Quality Reporting System core measure 
reporting requirement for eligible professionals specializing in 
internal medicine, family practice, general

[[Page 42858]]

practice, or cardiology, we are proposing to retain the same criteria 
for satisfactory reporting of measures groups via registry as the 2011 
criteria for satisfactory reporting of measures groups via registry 
finalized in the 2011 MPFS Final Rule with comment period. Therefore, 
as in 2011, an eligible professional must satisfactorily report on all 
individual measures within the measures group in order to meet the 
criteria for satisfactory reporting via measures groups. We are 
retaining the same criteria because we eligible professionals are 
already familiar with this reporting criteria, which we believe will in 
turn lead to a greater chance that eligible professionals meet the 
criteria for satisfactory reporting.
    As with the reporting of Physician Quality Reporting System 
individual measures, we also considered including geriatricians as one 
of specialties we proposed previously with regard to the proposed 
Physician Quality Reporting System core measure reporting requirement 
for measures groups. However, we would like to ensure that the proposed 
2012 Physician Quality Reporting System core measures are sufficiently 
applicable to geriatric physicians before proposing to include them 
under the proposed requirement. We seek public comment as to whether 
geriatricians should be included as a specialty required to report at 
least 1 proposed 2012 Physician Quality Reporting System core measure 
for measures group reporting. In addition, we seek public comment on 
whether other specialties should be included in the 2012 Physician 
Quality Reporting System core measure reporting requirement for 
measures groups.
    For 2012, in order to ensure that the Physician Quality Reporting 
System measures on which eligible professionals report are applicable 
to their respective practices, we propose not to count measures within 
measures groups that are reported through claims or registry that have 
a 0 percent performance rate. That is, if the recommended clinical 
quality action is not performed on at least one patient for a 
particular measure reported by the eligible professional via claims or 
registry, we will not count the measures groups as a measures group 
reported by an eligible professional. Furthermore, this proposed 
requirement is consistent with the proposed reporting options for 
individual quality measures, which are discussed previously. Since we 
are proposing to retain the requirement that an eligible professional 
must satisfactorily report on all individual measures contained within 
a measures group in order to meet the criteria for satisfactory 
reporting via measures groups, if an eligible professional reports a 
measure contained within a measures group with a 0 percent performance 
rate, the eligible professional will fail to meet the criteria for the 
satisfactory reporting of measures groups.
    The proposed 2012 criteria for satisfactory reporting of data on 
measures groups are summarized in the following Tables 26 through 27 
and are arranged by reporting mechanism and reporting period.

  Table 26--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Registry for the Following Specialties: Internal Medicine, Family
                                                        Practice, General Practice and Cardiology
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Reporting mechanism                             Reporting criteria                                       Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Registry................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           If the measures group does not contain at
                                           least 1 Physician Quality core measure, then 1
                                           Physician Quality core measure; AND
                                           Report each measures group and, if
                                           applicable, Physician Quality Reporting System
                                           core measure for at least 30 Medicare Part B FFS
                                           patients.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Registry................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group;
                                           If the measures group does not contain at
                                           least 1 Physician Quality core measure, then 1
                                           Physician Quality core measure; AND
                                           Report each measures group and, if
                                           applicable, Physician Quality Reporting System
                                           core measure for at least 80% of the eligible
                                           professional's Medicare Part B FFS patients seen
                                           during the reporting period to whom the measures
                                           group applies; BUT
                                           Report each measures group on no less than
                                           15 Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Registry................................   Report at least 1 Physician Quality         July 1, 2012-December 31, 2012.
                                           Reporting System measures group;
                                           If the measures group does not contain at
                                           least 1 Physician Quality core measure, then 1
                                           Physician Quality core measure; AND
                                           Report each measures group and, if
                                           applicable, Physician Quality Reporting System
                                           core measure for at least 80% of the eligible
                                           professional's Medicare Part B FFS patients seen
                                           during the reporting period to whom the measures
                                           group applies; BUT
                                           Report each measures group on at least 8
                                           Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 42859]]


Table 27--Proposed 2012 Criteria for Satisfactory Reporting on Measures Groups via Registry for All Other Eligible Professionals Not Identified in Table
                                                                           26
--------------------------------------------------------------------------------------------------------------------------------------------------------
           Reporting mechanism                             Reporting criteria                                       Reporting period
--------------------------------------------------------------------------------------------------------------------------------------------------------
Registry................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           Report each measures group for at least 30
                                           Medicare Part B FFS patients.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Registry................................   Report at least 1 Physician Quality         January 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           Report each measures group for at least
                                           80% of the eligible professional's Medicare Part B
                                           FFS patients seen during the reporting period to
                                           whom the measures group applies; BUT
                                           Report each measures group on at least 15
                                           Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
Registry................................   Report at least 1 Physician Quality         July 1, 2012-December 31, 2012.
                                           Reporting System measures group; AND
                                           Report each measures group for at least
                                           80% of the eligible professional's Medicare Part B
                                           FFS patients seen during the reporting period to
                                           whom the measures group applies; BUT
                                           Report each measures group on no less than
                                           8 Medicare Part B FFS patients seen during the
                                           reporting period to which the measures group
                                           applies.
                                           Measures groups containing a measure with
                                           a 0% performance rate will not be counted.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    An eligible professional could also potentially qualify for the 
Physician Quality Reporting System incentive payment by satisfactorily 
reporting both individual measures and measures groups. However, only 
one incentive payment will be made to the eligible professional. We 
invite public comment on the proposed criteria for satisfactory 
reporting of measures groups for individual eligible professionals.
(6) Proposed 2012 Criteria for Satisfactory Reporting on Physician 
Quality Reporting System Measures by Group Practices Under the GPRO
    As stated previously, instead of participating as an individual 
eligible professional, an eligible professional in a group practice may 
participate in the Physician Quality Reporting System under the 
Physician Quality Reporting System GPRO. However, an individual 
eligible professional who is affiliated with a group practice 
participating in the Physician Quality Reporting System GPRO that 
satisfactorily submits Physician Quality Reporting System quality 
measures will only be able to earn an incentive as part of the group 
practice and not as an individual eligible professional.
    As stated previously, we propose that group practices interested in 
participating in GPRO must self-nominate. As stated in the ``Proposed 
Reporting Period'' in section IV.F.2.c. of this proposed rule, for 
group practices selected to participate in the Physician Quality 
Reporting System GPRO for 2012, we propose a 12-month reporting period 
beginning January 1, 2012. For 2012, we propose to use the same GPRO 
reporting methods that we have used in prior years. Specifically, we 
propose that group practices participating in GPRO submit information 
on measures within a proposed common set of 40 NQF-endorsed quality 
measures using a web interface based on the GPRO Tool used in the 2011 
Physician Quality Reporting System GPRO. As part of the data submission 
process for 2012 GPRO, we propose that during 2012, each group practice 
would be required to report quality measures with respect to services 
furnished during the 2012 reporting period (that is, January 1, 2012, 
through December 31, 2012) on an assigned sample of Medicare 
beneficiaries. Once the beneficiary assignment has been made for each 
group practice, which we anticipate will be done during the fourth 
quarter of 2012, we propose to provide each group practice selected to 
participate in the Physician Quality Reporting System GPRO with access 
to a web interface that would include the group's assigned beneficiary 
samples and the final GPRO quality measures. We propose to pre-populate 
the web interface with the assigned beneficiaries' demographic and 
utilization information based on all of their Medicare claims data. The 
group practice would be required to populate the remaining data fields 
necessary for capturing quality measure information on each of the 
assigned beneficiaries.
    As specified in section IV.F.(b).(2).(B). of this proposed rule, we 
propose to change the definition of the group practices to those 
practices consisting of 25 or more eligible professionals. In 2011, to 
distinguish the criteria in GPRO I and II for satisfactory reporting 
between small vs. large groups, we established different reporting 
criteria dependent on the group's size. Although we are consolidating 
the GPRO for 2012, we still recognize the need to equalize the 
reporting burden by establishing different reporting criteria for small 
vs. large groups. Therefore, we propose to establish the following two 
criteria for the satisfactory reporting of Physician Quality Reporting 
System quality measures under the 2012 GPRO, based on the size of the 
group practice:
     For group practices comprised of 25-99 eligible 
professionals participating in the GPRO, we propose that the group 
practice must report on all GPRO measures included in the web interface 
(listed in Table 56 of this proposed rule). During the submission 
period, the group practice will need to access the web interface and 
populate the data fields necessary for capturing quality measure 
information on each of the assigned beneficiaries up to 218 
beneficiaries (with an over-sample of 327 beneficiaries) for each 
disease

[[Page 42860]]

module and preventive care measure. We further propose that if the pool 
of eligible assigned beneficiaries for any disease module or preventive 
care measure is less than 218, then the group practice would need to 
populate the remaining data files for 100 percent of eligible assigned 
beneficiaries for that disease module or preventive care measure. For 
each disease module or preventive care measure, we propose that the 
group practice must report information on the assigned patients in the 
order in which they appear in the group's sample (that is, 
consecutively). We propose these criteria because they mirror the 
criteria for CMS' Medicare Care Management Performance (MCMP) 
demonstration. In determining the appropriate reporting criteria for 
group practices comprised of 25-99 eligible professionals, we sought to 
align the criteria for satisfactory reporting under the Physician 
Quality Reporting System with CMS' MCMP demonstration, which uses small 
to medium-sized group practices to analyze data aimed at improving the 
quality of care for beneficiaries with chronic conditions. We have an 
interest in aligning the reporting criteria for these two programs 
particularly as the MCMP demonstration also required its participants 
to report on measures similar to the PGP demonstration and using the 
same data collection vehicle. However, the statistical sampling 
methodology used in the MCMP demonstration also took into account that 
the group practices that participated in this demonstration were 
significantly smaller than those that participate in the PGP 
demonstration.
     For group practices comprised of 100 or more eligible 
professionals, we propose that the group practices must report on all 
Physician Quality Reporting System GPRO quality measures. During the 
submission period, the group practice would need to populate the 
remaining data fields in the web interface necessary for capturing 
quality measure information on each of the assigned beneficiaries up to 
411 beneficiaries (with an over-sample of 616 beneficiaries) for each 
disease module and preventive care measure. We further propose that if 
the pool of eligible assigned beneficiaries for any disease module or 
preventive care measure is less than 411, then the group practice must 
populate the remaining data fields for 100 percent of eligible assigned 
beneficiaries for that disease module or preventive care measure. For 
each disease module or preventive care measure, we propose that the 
group practice must report information on the assigned patients in the 
order in which they appear in the group's sample (that is, 
consecutively).
    Furthermore, although we are requiring that the group practices 
participating as GPROs report on a certain number of consecutive 
patients, such as either 218 or 411 beneficiaries depending on the 
group's size, we propose to allow the ``skipping'' of patients for 
valid reasons, such as a beneficiary's medical records not being found 
or not being able to confirm a diagnosis. However, excessive skipping 
of patients may cause us to question the accuracy or validity of the 
data being reported to us by the group practices. Due to the variance 
in group patterns, measures, and disease modules, however, it is 
difficult to establish a ``skip threshold'' for the satisfactory 
reporting of GPRO measures. Therefore, it is our intent to examine each 
group practice's skip patterns. We may request the group to provide 
additional information to help explain or support the skips to help 
better inform us on what levels of skipping could potentially be 
considered excessive skipping in a future year.
    In determining the appropriate reporting criteria for group 
practices comprised of 100 or more eligible professionals, we sought to 
use the same criteria as we finalized in the 2011 MPFS Final Rule with 
comment period for GPRO I (75 FR 73506) because group practices are 
already familiar with this reporting process. We hope that establishing 
the same process for reporting under the GPRO as proposed in prior 
years will provide a likelier chance for meeting the criteria for 
satisfactory reporting under the GPRO. In addition, we sought to align 
the criteria for satisfactory reporting under the Physician Quality 
Reporting System with CMS' Physician Group Practice (PGP) 
demonstration, which collects data from large group practices in an 
effort to coordinate the overall care delivered to Medicare patients.
    As we discussed previously with our proposed definition of group 
practice, we allow for fluctuation of the group practice's size 
throughout the reporting period, provided that the group size contains 
at least 25 eligible professionals, which is the proposed minimum group 
practice size for participation in the Physician Quality Reporting 
System GPRO. However, as we established in 2011, for purposes of 
determining which reporting criteria the group must satisfy, a group 
practice's size will be the size of the group at the time the group's 
participation is approved by CMS (75 FR 73504). For example, if a group 
practice is comprised of 100 eligible professionals at the time it 
self-nominates for participation as a GPRO in 2012, and the group 
practice's size then drops to 99 eligible professionals at the time the 
group practice's participation is approved by CMS, the group practice 
would need to meet the proposed reporting criteria for a group size of 
99.
    Table 28 summarizes the proposed criteria for the satisfactory 
reporting of data on quality measures by group practice under the 
proposed 2012 Physician Quality Reporting GPRO. We propose that group 
practices participating in the 2012 Physician Quality Reporting System 
GPRO, regardless of size, would be required to report on all of the 
proposed measures listed in Table 56 of this proposed rule. These 
quality measures are grouped into preventive care measures and five 
disease modules: heart failure, diabetes, coronary artery disease, 
hypertension, and chronic obstructive pulmonary disease (COPD).

 TABLE 28--Proposed 2012 Criteria for Satisfactory Reporting for Group Practices Participating in the Physician
                         Quality Reporting System Group Practice Reporting Option (GPRO)
----------------------------------------------------------------------------------------------------------------
                                    Reporting
      Group practice size           mechanism             Reporting criteria               Reporting period
----------------------------------------------------------------------------------------------------------------
25-99 Eligible Professionals..  A submission web    Report on all measures   January 1, 2012-December
                                 interface          included in the web interface;    31, 2012.
                                 provided by CMS.   and
                                                    Populate data fields
                                                    for the first 218 consecutively
                                                    ranked and assigned
                                                    beneficiaries in the order in
                                                    which they appear in the
                                                    group's sample (with an
                                                    over[dash]sample of 327) for
                                                    each disease module or
                                                    preventive care measure. If the
                                                    pool of eligible assigned
                                                    beneficiaries is less than 218,
                                                    then report on 100% of assigned
                                                    beneficiaries.

[[Page 42861]]

 
100+ Eligible Professionals...  A submission web    Report on all measures   January 1, 2012-December
                                 interface          included in the web interface;    31, 2012.
                                 provided by CMS.   and
                                                    Populate data fields
                                                    for the first 411 consecutively
                                                    ranked and assigned
                                                    beneficiaries in the order in
                                                    which they appear in the
                                                    group's sample (with an
                                                    over[dash]sample of 616) for
                                                    each disease module or
                                                    preventive care measure. If the
                                                    pool of eligible assigned
                                                    beneficiaries is less than 411,
                                                    then report on 100% of assigned
                                                    beneficiaries.
----------------------------------------------------------------------------------------------------------------

    We intend to post the final 2012 Physician Quality Reporting System 
GPRO participation requirements for group practices, including 
instructions for submitting the self-nomination statement and other 
requested information, on the Physician Quality Reporting System 
section of the CMS Web site at http://www.cms.gov/PQRS by November 15, 
2011 or shortly thereafter.
    The Physician Quality Reporting System GPRO web interface will be 
updated as needed to include the 2012 Physician Quality Reporting 
System GPRO measures (i.e. to eliminate measures that have been retired 
as well as add additional measures that will be finalized for 2012). We 
believe that use of the GPRO web interface allows group practices the 
opportunity to calculate their own performance rates on the quality 
measures.
    We intend to provide the selected physician groups with access to 
this pre-populated database by no later than the first quarter of 2013. 
For purposes of pre-populating this GPRO web interface, we propose to 
assign beneficiaries to each group practice using a patient assignment 
methodology modeled after the patient assignment methodology used in 
the PGP & MCMP demonstrations. Based on our desire to model the 
Physician Quality Reporting System GPRO after the PGP & MCMP 
demonstrations, we will also consider incorporating any methodologies 
used in the PGP demonstration prior to January 1, 2012 to the 2012 
Physician Quality Reporting System. We propose using Medicare Part B 
claims data for dates of service on or after January 1, 2011 and 
submitted and processed by approximately October 31, 2011 to assign 
Medicare beneficiaries to each group practice. Assigned beneficiaries 
would be limited to those Medicare Part B FFS beneficiaries with 
Medicare Parts A and B claims for whom Medicare is the primary payer. 
Assigned beneficiaries would not include Medicare Advantage enrollees. 
A beneficiary would be assigned to the group practice that provides the 
plurality of a beneficiary's office or other outpatient office 
evaluation and management allowed charges. Beneficiaries with only one 
office visit to the group practice would be eliminated from the group 
practice's assigned patient sample for purposes of the 2012 Physician 
Quality Reporting System GPRO. We would pre-populate the GPRO web 
interface with the assigned beneficiaries' demographic and utilization 
information based on their Medicare claims data.
    We invite public comment on the proposed requirements for 
satisfactory reporting via the Physician Quality Reporting System GPRO 
reporting option.
f. 2012 Physician Quality Reporting System Measures
(1) Statutory Requirements for the Selection of Proposed 2012 Physician 
Quality Reporting System Measures
    Under section 1848(k)(2)(C)(i) of the Act, the Physician Quality 
Reporting System quality measures shall be such measures selected by 
the Secretary from measures that have been endorsed by the entity with 
a contract with the Secretary under subsection 1890(a) of the Act 
(currently, that is the National Quality Forum, or NQF). However, in 
the case of a specified area or medical topic determined appropriate by 
the Secretary for which a feasible and practical measure has not been 
endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act authorizes 
the Secretary to specify a measure that is not so endorsed as long as 
due consideration is given to measures that have been endorsed or 
adopted by a consensus organization identified by the Secretary, such 
as the AQA alliance. In light of these statutory requirements, we 
believe that, except in the circumstances specified in the statute, 
each proposed 2012 Physician Quality Reporting System quality measure 
would need to be endorsed by the NQF. Additionally, section 
1848(k)(2)(D) of the Act requires that for each 2012 Physician Quality 
Reporting System quality measure, ``the Secretary shall ensure that 
eligible professionals have the opportunity to provide input during the 
development, endorsement, or selection of measures applicable to 
services they furnish.''
    The statutory requirements under section 1848(k)(2)(C) of the Act, 
subject to the exception noted previously, require only that the 
measures be selected from measures that have been endorsed by the 
entity with a contract with the Secretary under section 1890(a) (that 
is, the NQF) and are silent with respect to how the measures that are 
submitted to the NQF for endorsement were developed. The basic steps 
for developing measures applicable to physicians and other eligible 
professionals prior to submission of the measures for endorsement may 
be carried out by a variety of different organizations. We do not 
believe there needs to be any special restrictions on the type or make-
up of the organizations carrying out this basic process of development 
of physician measures, such as restricting the initial development to 
physician-controlled organizations. Any such restriction would unduly 
limit the basic development of quality measures and the scope and 
utility of measures that may be considered for endorsement as voluntary 
consensus standards for purposes of the Physician Quality Reporting 
System.
(2) Other Considerations for the Selection of Proposed 2012 Physician 
Quality Reporting System Measures
    In addition to reviewing the 2011 Physician Quality Reporting 
System measures for purposes of developing the proposed 2012 Physician 
Quality Reporting System measures, we reviewed and considered measure 
suggestions for the 2012 Physician Quality Reporting System.
    With respect to the selection of new measures, we applied the 
following

[[Page 42862]]

considerations, which include many of the same considerations applied 
to the selection of 2009, 2010 and 2011 Physician Quality Reporting 
System quality measures proposed for inclusion in the 2012 Physician 
Quality Reporting System quality measure set previously described:
     High Impact on Healthcare.
    ++ Measures that are high impact and support CMS and HHS priorities 
for improved quality and efficiency of care for Medicare beneficiaries. 
These current and long term priority topics include the following: 
Prevention; chronic conditions; high cost and high volume conditions; 
elimination of health disparities; healthcare-associated infections and 
other conditions; improved care coordination; improved outcomes; 
improved efficiency; improved patient and family experience of care; 
effective management of acute and chronic episodes of care; reduced 
unwarranted geographic variation in quality and efficiency; and 
adoption and use of interoperable HIT.
    ++ Measures that are included in, or facilitate alignment with, 
other Medicare, Medicaid, and CHIP programs in furtherance of 
overarching healthcare goals.
    ++ NQF Endorsement.
    ++ Measures must be NQF-endorsed by August 15, 2011, in order to be 
considered for inclusion in the 2012 Physician Quality Reporting System 
quality measure set except as provided under section 1848(k)(2)(C)(ii) 
of the Act.
    ++ Section 1848(k)(2)(C)(ii) of the Act provides an exception to 
the requirement that the Secretary select measures that have been 
endorsed by the entity with a contract under section 1890(a) of the Act 
(that is, the NQF).
     Address Gaps in the Physician Quality Reporting System 
Measure Set.
    ++ Measures that increase the scope of applicability of the 
Physician Quality Reporting System measures to services furnished to 
Medicare beneficiaries and expand opportunities for eligible 
professionals to participate in the Physician Quality Reporting System.
     Measures of various aspects of clinical quality including 
outcome measures, where appropriate and feasible, process measures, 
structural measures, efficiency measures, and measures of patient 
experience of care.
    Other considerations that we applied to the selection of proposed 
measures for 2012, regardless of whether the measure was a 2011 
Physician Quality Reporting System measure or not, were--
     Measures that are functional, which is to say measures 
that can be technically implemented within the capacity of the CMS 
infrastructure for data collection, analysis, and calculation of 
reporting and performance rates.
     Measures that address gaps in the quality of care 
delivered to Medicare beneficiaries;
     Measures impacting chronic conditions (chronic kidney 
disease, diabetes mellitus, heart failure, hypertension and 
musculoskeletal);
     Measures involving care coordination;
     Measures applicable across care settings (such as, 
outpatient, nursing facilities, domiciliary, etc.)
     Measures conducive to leveraging capabilities of an 
electronic health record (EHR)
     Measures whose detailed specifications will be completed 
and ready for implementation in the 2012 Physician Quality Reporting 
System
     Broadly applicable measures that could be used to create a 
core measure set required of all participating eligible professionals
     Measures groups that reflect the services furnished to 
beneficiaries by a particular specialty.
    In the 2012 Physician Quality Reporting System, as in the 2011 
Physician Quality Reporting System, for some measures that are useful, 
but where data submission is not feasible through all otherwise 
available Physician Quality Reporting System reporting mechanisms, we 
are proposing that a measure may be included for reporting solely 
through specific reporting mechanism(s) in which its submission is 
feasible.
    As discussed previously, section 1848(k)(2)(D) of the Act requires 
that the public have the opportunity to provide input during the 
selection of measures. We also are required by other applicable 
statutes to provide opportunity for public comment on provisions of 
policy or regulation that are established via notice and comment 
rulemaking. Measures that are not included in the proposed rule for 
inclusion in the 2012 Physician Quality Reporting System that are 
recommended to us via comments on the proposed rule have not been 
placed before the public to comment on the selection of those measures 
within the rulemaking process. Even when measures have been published 
in the Federal Register, but in other contexts and not specifically 
proposed as Physician Quality Reporting System measures, such 
publication does not provide true opportunity for public comment on 
those measures' potential inclusion in the Physician Quality Reporting 
System. Thus, such additional measures recommended for selection for 
the 2012 Physician Quality Reporting System via comments on the CY 2012 
PFS proposed rule cannot be included in the 2012 measure set. As such, 
while we welcome all constructive comments and suggestions, and may 
consider such recommended measures for inclusion in future measure sets 
for the Physician Quality Reporting System and other programs to which 
such measures may be relevant, we are not able to consider such 
additional measures for inclusion in the final 2012 Physician Quality 
Reporting System measure set.
    In addition, as in prior years, we again note that we do not use 
notice and comment rulemaking as a means to update or modify measure 
specifications. Quality measures that have completed the consensus 
process have a designated party (usually, the measure developer/owner) 
who has accepted responsibility for maintaining the measure. In 
general, it is the role of the measure owner, developer, or maintainer 
to make changes to a measure. Therefore, comments requesting changes to 
a specific proposed Physician Quality Reporting System measure's title, 
definition, and detailed specifications or coding should be directed to 
the measure developer identified in Tables 29 through 55. Contact 
information for the 2011 Physician Quality Reporting System measure 
developers is listed in the ``2011 Physician Quality Reporting System 
Quality Measures List,'' which is available on the CMS Web site at 
http://www.cms.gov/PQRS/15_MeasuresCodes.asp#TopOfPage.
    However, we stress that inclusion of measures that are not NQF 
endorsed or AQA adopted is an exception to the requirement under 
section 1848(k)(2)(C)(i) of the Act that measures be endorsed by the 
NQF. We may exercise this exception authority in a specified area or 
medical topic for which a feasible and practical measure has not been 
endorsed by NQF, so long as due consideration is given to measures that 
have been endorsed by the NQF.
    Based on the criteria previously discussed, we propose to include 
the individual measures listed in Tables 29 through 31 in the 2012 
Physician Quality Reporting System individual quality measure set. We 
believe that each measure we are proposing for reporting under the 2012 
Physician Quality Reporting System meets at least one criterion for the 
selection of Physician Quality Reporting System measures described 
previously. We are also proposing to include 24 measures

[[Page 42863]]

groups in the 2012 Physician Quality Reporting System quality measure 
set, which are listed in Tables 29 through 31. The individual measures 
selected for the 2012 Physician Quality Reporting System can be 
categorized as follows--
     Proposed 2012 Physician Quality Reporting System Core 
Measures Available for Either Claims, Registry, and/or EHR-Based 
Reporting;
     Proposed 2012 Physician Quality Reporting System 
Individual Quality Measures Available for Either Claims-based Reporting 
and/or Registry-based Reporting; AND
     Proposed 2012 Physician Quality Reporting System Measures 
Available for EHR-Based Reporting.
    Please note that some individual measures we are proposing in 
Tables 29 through 31 for reporting for the 2012 Physician Quality 
Reporting System may be available for reporting in other CMS programs, 
such as the Medicare and Medicaid EHR Incentive Program as well as the 
Medicare Shared Savings Program. We note that measure titles, in some 
instances, may vary from program to program. If an eligible 
professional intends to report the same measures for multiple CMS 
programs, it is important to check the full measure specifications, NQF 
measure number (if applicable), as well as any other identifying 
measure features to determine whether the measures are the same. We 
invite comments on our proposed approach in selecting measures.
(3) Proposed 2012 Physician Quality Reporting System Individual 
Measures
    This section focuses on the proposed 2012 Physician Quality 
Reporting System Individual Measures available for reporting via claims 
and/or registry. For the proposed 2012 Physician Quality Reporting 
System measures that were selected for reporting in 2011, please note 
that detailed measure specifications, including the measure's title, 
for the proposed 2012 individual Physician Quality Reporting System 
quality measures may have been updated or modified during the NQF 
endorsement process or for other reasons prior to 2012. The 2012 
Physician Quality Reporting System quality measure specifications for 
any given individual quality measure may, therefore, be different from 
specifications for the same quality measure used in prior years. 
Specifications for all 2012 individual Physician Quality Reporting 
System quality measures, whether or not included in the 2011 Physician 
Quality Reporting System program, must be obtained from the 
specifications document for 2012 individual Physician Quality Reporting 
System quality measures, which will be available on the Physician 
Quality Reporting System section of the CMS Web site on or before 
December 31, 2011.
(A) Proposed 2012 Physician Quality Reporting System Core Measures 
Available for Claims, Registry, and/or EHR-Based Reporting
    The prevention of cardiovascular conditions is a top priority for 
CMS. Therefore, in an effort to encourage eligible professionals to 
monitor their performance with respect to the prevention of 
cardiovascular conditions, we propose to adopt a Physician Quality 
Reporting System set of core measures for CY 2012, which are specified 
later in this section in Table 29, which focuses on the prevention of 
cardiovascular conditions.
    While we encourage reporting of these measures by all eligible 
professionals, as previously discussed in section IV.F.1.f. of this 
proposed rule, we are proposing that only certain specialties be 
required to report on the proposed 2012 Physician Quality Reporting 
System core measures.

 Table 29--Proposed 2012 Physician Quality Reporting System Core Measures Available for Either Claims, Registry,
                                         and/or EHR[dash]Based Reporting
----------------------------------------------------------------------------------------------------------------
  Physician quality
  reporting  system        Measure title       NQF measure  No.  Measure  developer      Reporting  mechanism
     measure No.
----------------------------------------------------------------------------------------------------------------
204.................  Ischemic Vascular                    0068  NCQA..............  Claims, Registry, EHR.
                       Disease (IVD): Use of
                       Aspirin or another
                       Antithrombotic.
236.................  Controlling High Blood               0018  NCQA..............  Claims, Registry, EHR.
                       Pressure.
2...................  Diabetes Mellitus: Low               0064  NCQA..............  Claims, Registry, EHR.
                       Density Lipoprotein
                       (LDL[dash]C) Control
                       in Diabetes Mellitus.
226.................  Measure pair: a.                     0028  AMA[dash]PCPI.....  Claims, Registry, EHR.
                       Tobacco Use
                       Assessment, b. Tobacco
                       Cessation Intervention.
TBD.................  Ischemic Vascular                    0075  NCQA..............  Claims, Registry, EHR.
                       Disease (IVD):
                       Complete Lipid Profile
                       and LDL Control < 100.
TBD.................  Proportion of adults 18               N/A  CMS...............  Claims, Registry, EHR.
                       years and older who
                       have had their BP
                       measured within the
                       preceding 2 years.
TBD.................  Preventative Care:                    N/A  CMS...............  EHR.
                       Cholesterol[dash]LDL
                       test performed.
----------------------------------------------------------------------------------------------------------------

    We invite public comment on the proposed 2012 Physician Quality 
Reporting System core measures.
(B) Proposed 2012 Physician Quality Reporting System Individual 
Measures for Claims and Registry Reporting
    For 2012, we propose to retain all measures currently used in the 
2011 Physician Quality Reporting System. We believe these 2011 
Physician Quality Reporting System measures meet the statutory 
considerations as well as other factors we used in determining which 
measures to include for reporting under the 2012 Physician Quality 
Reporting System. The retention of these measures also promotes program 
consistency. These proposed measures include 55 registry-only measures 
currently used in the 2011 Physician Quality Reporting System, and 144 
individual quality measures for either claims-based reporting or 
registry-based reporting (75 FR 40186 through 40190 and 52489 through 
52490). These proposed measures do not include any measures that are 
proposed to be included as part of the Back Pain measures group. For 
2012, we propose that any 2012 Physician Quality Reporting System 
measures that are included in the Back Pain measures group would not be 
reportable as individual measures through claims-based reporting or 
registry-based reporting.

[[Page 42864]]

    In 2011, Physician Quality Reporting System measure  197 
was titled ``Coronary Artery Disease (CAD): Drug Therapy for Lowering 
LDL-Cholesterol''. For 2012, we are changing the title of measure 
 197 to ``Coronary Artery Disease: Lipid Control'', because 
the measure owner, AMA-PCPI, has changed the title of the measure. 
Aside from the title change, measure  197's NQF number as well 
as its NQF-endorsement status has not changed. However, as noted 
previously, please check the measure specifications for measure 
 197, as the specifications on how to report on measure 
 197 for the 2012 Physician Quality Reporting System may 
change from 2011.
    In addition, we propose the 26 new individual measures below for 
inclusion in the 2012 Physician Quality Reporting System in order to 
provide eligible professionals with more Physician Quality Reporting 
System quality measures on which they can select from to report. The 
following 2 proposed measures are NQF-endorsed:
     Anticoagulation for Acute Pulmonary Embolus Patients.
     Pregnancy Test for Female Abdominal Pain Patients.
    The remaining 24 measures are either pending NQF endorsement or 
would have to be adopted under the exception to NQF endorsement 
provided under section 1848(k)(2)(C)(ii) of the Act. In selecting these 
measures, we took into account other considerations listed in section 
IV.F.1.(f).(2). of this proposed rule. Specifically, we are proposing 
the following measures because the measures impact chronic conditions:
     Chronic Wound Care: Use of Wound Surface Culture Technique 
in Patients with Chronic Skin Ulcers.
     Chronic Wound Care: Use of Wet to Dry Dressings in 
Patients with Chronic Skin Ulcers.
     Hypertension: Blood Pressure Control.
    We are proposing the following measures because these measures 
involve care coordination:
     Coronary Artery Disease (CAD): Symptom Management.
    We are proposing the following measures because these measures are 
applicable across care settings:
     Substance Use Disorders: Counseling Regarding Psychosocial 
and Pharmacologic Treatment Options for Alcohol Dependence.
     Substance Use Disorders: Screening for Depression Among 
Patients with Substance Abuse or Dependence.
     Cardiac Rehabilitation Patient Referral From an Outpatient 
Setting.
    We are proposing the following measures because we believe the 
measures address gaps in the Physician Quality Reporting System measure 
set:
     Barrett's Esophagus.
     Ultrasound Determination of Pregnancy Location for 
Pregnant Patients with Abdominal Pain.
     Rh Immunoglobulin (Rhogam) for Rh Negative Pregnant Women 
at Risk of Fetal Blood Exposure.
     Surveillance after Endovascular Abdominal Aortic Aneurysm 
Repair (EVAR).
     Referral for Otology Evaluation for Patients with Acute or 
Chronic Dizziness.
     Image Confirmation of Successful Excision of Image--
Localized Breast Lesion.
     Improvement in Patient's Visual Function within 90-Days 
Following Cataract Surgery.
     Patient Satisfaction within 90-Days Following Cataract 
Surgery.
    We are proposing the following measures because we believe the 
measures increase the scope of applicability of the Physician Quality 
Reporting System measures to services furnished to Medicare 
beneficiaries and expand opportunities for eligible professionals to 
participate in the Physician Quality Reporting System:
     Radical Prostatectomy Pathology Reporting.
     Immunohistochemical (IHC) Evaluation of HER2 for Breast 
Cancer Patients.
    We are proposing the following measures because the measures are 
high impact and support CMS and HHS priorities for improved quality and 
efficiency of care for Medicare beneficiaries.
     Statin Therapy at Discharge after Lower Extremity Bypass 
(LEB).
     Rate of Open AAA Repair without Major Complications 
(discharged to home no later than post-operative day 7).
     Rate of EVAR without Major Complications (discharged to 
home no later than POD 2).
     Rate of Carotid Endarterectomy for Asymptomatic Patients, 
without Major Complications (discharged to home no later than post-
operative day 2).
    We are proposing the following measures because the measures have a 
high impact on health care:
     Preoperative Diagnosis of Breast Cancer.
     Sentinel Lymph Node Biopsy for Invasive Breast Cancer.
     Biopsy Follow-up.
    We believe that the addition of Physician Quality Reporting System 
quality measures will encourage eligible professionals to participate 
in the Physician Quality Reporting System, as there are more measures 
that may be applicable to eligible professionals.
    Of these measures, 13 would be reportable via registry-only. The 
remaining 13 measures would be available for claims and registry 
reporting. Although we are proposing to designate certain measures as 
registry-only measures, we cannot guarantee that there will be a 
registry qualified to submit each registry-only measure for 2012. We 
rely on registries to self-nominate and identify the measures for which 
they would like to be qualified to submit quality measures results and 
numerator and denominator data on quality measures. If no registry 
self-nominates to submit measure results and numerator and denominator 
data on a particular measure for 2012, then an eligible professional 
would not be able to report that particular measure.
    Table 30 identifies the list of measures we propose to include for 
claims and/or registry-based reporting in the 2012 Physician Quality 
Reporting System. The proposed 2012 Physician Quality Reporting System 
individual measures for either claims-based reporting or registry-based 
reporting are listed by their Physician Quality Reporting System 
Measure Number (to the extent the measure is part of the 2011 Physician 
Quality Reporting System measure set) and Title in Table 30, along with 
the name of the measure's developer/owner and NQF measure number, if 
applicable. The Physician Quality Reporting System Measure Number is a 
unique identifier assigned by CMS to all measures in the Physician 
Quality Reporting System measure set. Once a Physician Quality 
Reporting System Measure Number is assigned to a measure, it will not 
be used again to identify a different measure, even if the original 
measure to which the number was assigned is subsequently retired from 
the Physician Quality Reporting System measure set. A description of 
the measures listed in Table 30 can be found in the ``2011 Physician 
Quality Reporting System Quality Measures List,'' which is available on 
the Measures and Codes page of the Physician Quality Reporting System 
section of the CMS Web site at http://www.cms.hhs.gov/PQRS to the 
extent the measure is part of the 2011 Physician Quality Reporting 
System measure set. New measures that we are proposing to add to the 
Physician Quality Reporting System measure set for 2012 are designated 
with a Physician Quality Reporting System Measure Number of ``TBD.''

[[Page 42865]]



   Table 30--Proposed 2012 Physician Quality Reporting System Individual Quality Measures Available for Either
                             Claims-Based Reporting and/or Registry-Based Reporting
----------------------------------------------------------------------------------------------------------------
  Physician quality
  reporting system         Measure title        NQF measure No.   Measure developer      Reporting  mechanism
     measure No.
----------------------------------------------------------------------------------------------------------------
1...................  Diabetes Mellitus:                   0059  NCQA..............  Claims, Registry.
                       Hemoglobin A1c Poor
                       Control in Diabetes
                       Mellitus.
2...................  Diabetes Mellitus: Low               0064  NCQA..............  Claims, Registry.
                       Density Lipoprotein
                       (LDL-C) Control in
                       Diabetes Mellitus.
3...................  Diabetes Mellitus: High              0061  NCQA..............  Claims, Registry.
                       Blood Pressure Control
                       in Diabetes Mellitus.
5...................  Heart Failure:                       0081  AMA-PCPI..........  Registry.
                       Angiotensin-Converting
                       Enzyme (ACE) Inhibitor
                       or Angiotensin
                       Receptor Blocker (ARB)
                       Therapy for Left
                       Ventricular Systolic
                       Dysfunction (LVSD).
6...................  Coronary Artery Disease              0067  AMA-PCPI..........  Claims, Registry.
                       (CAD): Oral
                       Antiplatelet Therapy
                       Prescribed for
                       Patients with CAD.
7...................  Coronary Artery Disease              0070  AMA-PCPI..........  Registry.
                       (CAD): Beta-Blocker
                       Therapy for CAD
                       Patients with Prior
                       Myocardial Infarction
                       (MI).
8...................  Heart Failure: Beta-                 0083  AMA-PCPI..........  Registry.
                       Blocker Therapy for
                       Left Ventricular
                       Systolic Dysfunction
                       (LVSD).
9...................  Major Depressive                     0105  NCQA..............  Claims, Registry.
                       Disorder (MDD):
                       Antidepressant
                       Medication During
                       Acute Phase for
                       Patients with MDD.
10..................  Stroke and Stroke                   00246  AMA-PCPI/NCQA.....  Claims, Registry.
                       Rehabilitation:
                       Computed Tomography
                       (CT) or Magnetic
                       Resonance Imaging
                       (MRI) Reports.
12..................  Primary Open Angle                   0086  AMA-PCPI..........  Claims, Registry.
                       Glaucoma (POAG): Optic
                       Nerve Evaluation.
14..................  Age-Related Macular                  0087  AMA-PCPI/NCQA.....  Claims, Registry.
                       Degeneration (AMD):
                       Dilated Macular
                       Examination.
18..................  Diabetic Retinopathy...              0088  AMA-PCPI..........  Claims, Registry.
19..................  Diabetic Retinopathy:                0089  AMA-PCPI..........  Claims, Registry.
                       Communication with the
                       Physician Managing On-
                       going Diabetes Care.
20..................  Perioperative Care:                  0270  AMA-PCPI/NCQA.....  Claims, Registry.
                       Timing of Antibiotic
                       Prophylaxis--Ordering
                       Physician.
21..................  Perioperative Care:                  0268  AMA-PCPI/NCQA.....  Claims, Registry.
                       Selection of
                       Prophylactic
                       Antibiotic.
22..................  Perioperative Care:                  0271  AMA-PCPI/NCQA.....  Claims, Registry.
                       Discontinuation of
                       Prophylactic
                       Antibiotics (Non-
                       Cardiac Procedures).
23..................  Perioperative Care:                  0239  AMA-PCPI/NCQA.....  Claims, Registry.
                       Venous Thromboembolism
                       (VTE) Prophylaxis
                       (When Indicated in ALL
                       Patients).
24..................  Osteoporosis:                        0045  AMA-PCPI/NCQA.....  Claims, Registry.
                       Communication with the
                       Physician Managing On-
                       going Care Post-
                       Fracture of Hip, Spine
                       or Distal Radius for
                       Men and Women Aged 50
                       Years and Older.
28..................  Aspirin at Arrival for               0092  AMA-PCPI/NCQA.....  Claims, Registry.
                       Acute Myocardial
                       Infarction (AMI).
30..................  Perioperative Care:                  0270  AMA-PCPI/NCQA.....  Claims, Registry.
                       Timely Administration
                       of Prophylactic
                       Parenteral Antibiotics.
31..................  Stroke and Stroke                    0240  AMA-PCPI/NCQA.....  Claims, Registry.
                       Rehabilitation: Deep
                       Vein Thrombosis
                       Prophylaxis (DVT) for
                       Ischemic Stroke or
                       Intracranial
                       Hemorrhage.
32..................  Stroke and Stroke                    0325  AMA-PCPI/NCQA.....  Claims, Registry.
                       Rehabilitation:
                       Discharged on
                       Antiplatelet Therapy.
33..................  Stroke and Stroke                    0241  AMA-PCPI/NCQA.....  Registry.
                       Rehabilitation:
                       Anticoagulant Therapy
                       Prescribed for Atrial
                       Fibrillation at
                       Discharge.
35..................  Stroke and Stroke                    0243  AMA-PCPI/NCQA.....  Claims, Registry.
                       Rehabilitation:
                       Screening for
                       Dysphagia.
36..................  Stroke and Stroke                    0244  AMA-PCPI/NCQA.....  Claims, Registry.
                       Rehabilitation:
                       Consideration of
                       Rehabilitation
                       Services.
39..................  Screening or Therapy                 0046  AMA-PCPI/NCQA.....  Claims, Registry.
                       for Osteoporosis for
                       Women Aged 65 Years
                       and Older.
40..................  Osteoporosis:                        0045  AMA-PCPI/NCQA.....  Claims, Registry.
                       Management Following
                       Fracture of Hip, Spine
                       or Distal Radius for
                       Men and Women Aged 50
                       Years and Older.
41..................  Osteoporosis:                        0049  AMA-PCPI/NCQA.....  Claims, Registry.
                       Pharmacologic Therapy
                       for Men and Women Aged
                       50 Years and Older.
43..................  Coronary Artery Bypass               0516  STS...............  Claims, Registry.
                       Graft (CABG): Use of
                       Internal Mammary
                       Artery (IMA) in
                       Patients with Isolated
                       CABG Surgery.
44..................  Coronary Artery Bypass               0235  STS...............  Claims, Registry.
                       Graft (CABG):
                       Preoperative Beta-
                       Blocker in Patients
                       with Isolated CABG
                       Surgery.
45..................  Perioperative Care:                  0637  AMA-PCPI/NCQA.....  Claims, Registry.
                       Discontinuation of
                       Prophylactic
                       Antibiotics (Cardiac
                       Procedures).

[[Page 42866]]

 
46..................  Medication                           0097  AMA-PCPI/NCQA.....  Claims, Registry.
                       Reconciliation:
                       Reconciliation After
                       Discharge from an
                       Inpatient Facility.
47..................  Advance Care Plan......              0326  AMA-PCPI/NCQA.....  Claims, Registry.
48..................  Urinary Incontinence:                0098  AMA-PCPI/NCQA.....  Claims, Registry.
                       Assessment of Presence
                       or Absence of Urinary
                       Incontinence in Women
                       Aged 65 Years and
                       Older.
49..................  Urinary Incontinence:                0099  AMA-PCPI/NCQA.....  Claims, Registry.
                       Characterization of
                       Urinary Incontinence
                       in Women Aged 65 Years
                       and Older.
50..................  Urinary Incontinence:                0100  AMA-PCPI/NCQA.....  Claims, Registry.
                       Plan of Care for
                       Urinary Incontinence
                       in Women Aged 65 Years
                       and Older.
51..................  Chronic Obstructive                  0091  AMA-PCPI..........  Claims, Registry.
                       Pulmonary Disease
                       (COPD): Spirometry
                       Evaluation.
52..................  Chronic Obstructive                  0102  AMA-PCPI..........  Claims, Registry.
                       Pulmonary Disease
                       (COPD): Bronchodilator
                       Therapy.
53..................  Asthma: Pharmacologic                0047  AMA-PCPI..........  Claims, Registry.
                       Therapy.
54..................  12-Lead                              0090  AMA-PCPI/NCQA.....  Claims, Registry.
                       Electrocardiogram
                       (ECG) Performed for
                       Non-Traumatic Chest
                       Pain.
55..................  12-Lead                              0093  AMA-PCPI/NCQA.....  Claims, Registry.
                       Electrocardiogram
                       (ECG) Performed for
                       Syncope.
56..................  Community-Acquired                   0232  AMA-PCPI/NCQA.....  Claims, Registry.
                       Pneumonia (CAP): Vital
                       Signs.
57..................  Community-Acquired                   0094  AMA-PCPI/NCQA.....  Claims, Registry.
                       Pneumonia (CAP):
                       Assessment of Oxygen
                       Saturation.
58..................  Community-Acquired                   0234  AMA-PCPI/NCQA.....  Claims, Registry.
                       Pneumonia (CAP):
                       Assessment of Mental
                       Status.
59..................  Community-Acquired                   0096  AMA-PCPI/NCQA.....  Claims, Registry.
                       Pneumonia (CAP):
                       Empiric Antibiotic.
64..................  Asthma: Asthma                       0001  AMA-PCPI..........  Claims, Registry.
                       Assessment.
65..................  Treatment for Children               0069  NCQA..............  Claims, Registry.
                       with Upper Respiratory
                       Infection (URI):
                       Avoidance of
                       Inappropriate Use.
66..................  Appropriate Testing for              0002  NCQA..............  Claims, Registry.
                       Children with
                       Pharyngitis.
67..................  Myelodysplastic                      0377  AMA-PCPI/ASH......  Claims, Registry.
                       Syndrome (MDS) and
                       Acute Leukemias:
                       Baseline Cytogenetic
                       Testing Performed on
                       Bone Marrow.
68..................  Myelodysplastic                      0378  AMA-PCPI/ASH......  Claims, Registry.
                       Syndrome (MDS):
                       Documentation of Iron
                       Stores in Patients
                       Receiving
                       Erythropoietin Therapy.
69..................  Multiple Myeloma:                    0380  AMA-PCPI/ASH......  Claims, Registry.
                       Treatment with
                       Bisphosphonates.
70..................  Chronic Lymphocytic                  0379  AMA-PCPI/ASH......  Claims, Registry.
                       Leukemia (CLL):
                       Baseline Flow
                       Cytometry.
71..................  Breast Cancer: Hormonal              0387  AMA-PCPI/ASCO/NCCN  Claims, Registry.
                       Therapy for Stage IC-
                       IIIC Estrogen Receptor/
                       Progesterone Receptor
                       (ER/PR) Positive
                       Breast Cancer.
72..................  Colon Cancer:                        0385  AMA-PCPI/ASCO/NCCN  Claims, Registry.
                       Chemotherapy for Stage
                       III Colon Cancer
                       Patients.
76..................  Prevention of Catheter-              0464  AMA-PCPI..........  Claims, Registry.
                       Related Bloodstream
                       Infections (CRBSI):
                       Central Venous
                       Catheter (CVC)
                       Insertion Protocol.
79..................  End Stage Renal Disease              0227  AMA-PCPI..........  Claims, Registry.
                       (ESRD): Influenza
                       Immunization in
                       Patients with ESRD.
81..................  End Stage Renal Disease              0323  AMA-PCPI..........  Registry.
                       (ESRD): Plan of Care
                       for Inadequate
                       Hemodialysis in ESRD
                       Patients.
82..................  End Stage Renal Disease              0321  AMA-PCPI..........  Registry.
                       (ESRD): Plan of Care
                       for Inadequate
                       Peritoneal Dialysis.
83..................  Hepatitis C: Testing                 0393  AMA-PCPI..........  Registry.
                       for Chronic Hepatitis
                       C--Confirmation of
                       Hepatitis C Viremia.
84..................  Hepatitis C:                         0395  AMA-PCPI..........  Claims, Registry.
                       Ribonucleic Acid (RNA)
                       Testing Before
                       Initiating Treatment.
85..................  Hepatitis C: HCV                     0396  AMA-PCPI..........  Claims, Registry.
                       Genotype Testing Prior
                       to Treatment.
86..................  Hepatitis C: Antiviral               0397  AMA-PCPI..........  Claims, Registry.
                       Treatment Prescribed.
87..................  Hepatitis C: HCV                     0398  AMA-PCPI..........  Claims, Registry.
                       Ribonucleic Acid (RNA)
                       Testing at Week 12 of
                       Treatment.
89..................  Hepatitis C: Counseling              0401  AMA-PCPI..........  Claims, Registry.
                       Regarding Risk of
                       Alcohol Consumption.
90..................  Hepatitis C: Counseling              0394  AMA-PCPI..........  Claims, Registry.
                       Regarding Use of
                       Contraception Prior to
                       Antiviral Therapy.
91..................  Acute Otitis Externa                 0653  AMA-PCPI..........  Claims, Registry.
                       (AOE): Topical Therapy.
92..................  Acute Otitis Externa                  N/A  AMA-PCPI..........  Claims, Registry.
                       (AOE): Pain Assessment.

[[Page 42867]]

 
93..................  Acute Otitis Externa                 0654  AMA-PCPI..........  Claims, Registry.
                       (AOE): Systemic
                       Antimicrobial Therapy--
                       Avoidance of
                       Inappropriate Use.
94..................  Otitis Media with                     N/A  AMA-PCPI..........  Claims, Registry.
                       Effusion (OME):
                       Diagnostic Evaluation--
                       Assessment of Tympanic
                       Membrane Mobility.
99..................  Breast Cancer Resection              0391  AMA-PCPI/CAP......  Claims, Registry.
                       Pathology Reporting:
                       pT Category (Primary
                       Tumor) and pN Category
                       (Regional Lymph Nodes)
                       with Histologic Grade.
100.................  Colorectal Cancer                    0392  AMA-PCPI/CAP......  Claims, Registry.
                       Resection Pathology
                       Reporting: pT Category
                       (Primary Tumor) and pN
                       Category (Regional
                       Lymph Nodes) with
                       Histologic Grade.
102.................  Prostate Cancer:                     0389  AMA-PCPI..........  Claims, Registry.
                       Avoidance of Overuse
                       of Bone Scan for
                       Staging Low-Risk
                       Prostate Cancer
                       Patients.
104.................  Prostate Cancer:                     0390  AMA-PCPI..........  Claims, Registry.
                       Adjuvant Hormonal
                       Therapy for High-Risk
                       Prostate Cancer
                       Patients.
105.................  Prostate Cancer: Three-              0388  AMA-PCPI..........  Claims, Registry.
                       Dimensional (3D)
                       Radiotherapy.
106.................  Major Depressive                     0103  AMA-PCPI..........  Claims, Registry.
                       Disorder (MDD):
                       Diagnostic Evaluation.
107.................  Major Depressive                     0104  AMA-PCPI..........  Claims, Registry.
                       Disorder (MDD):
                       Suicide Risk
                       Assessment.
108.................  Rheumatoid Arthritis                 0054  NCQA..............  Claims, Registry.
                       (RA): Disease
                       Modifying Anti-
                       Rheumatic Drug (DMARD)
                       Therapy.
109.................  Osteoarthritis (OA):                 0050  AMA-PCPI..........  Claims, Registry.
                       Function and Pain
                       Assessment.
110.................  Preventive Care and                  0041  AMA-PCPI..........  Claims, Registry.
                       Screening: Influenza
                       Immunization for
                       Patients >= 50 Years
                       Old.
111.................  Preventive Care and                  0043  NCQA..............  Claims, Registry.
                       Screening: Pneumonia
                       Vaccination for
                       Patients 65 Years and
                       Older.
112.................  Preventive Care and                  0031  NCQA..............  Claims, Registry.
                       Screening: Screening
                       Mammography.
113.................  Preventive Care and                  0034  NCQA..............  Claims, Registry.
                       Screening: Colorectal
                       Cancer Screening.
116.................  Antibiotic Treatment                 0058  NCQA..............  Claims, Registry.
                       for Adults with Acute
                       Bronchitis: Avoidance
                       of Inappropriate Use.
117.................  Diabetes Mellitus:                   0055  NCQA..............  Claims, Registry.
                       Dilated Eye Exam in
                       Diabetic Patient.
118.................  Coronary Artery Disease              0066  AMA-PCPI..........  Registry.
                       (CAD): Angiotensin-
                       Converting Enzyme
                       (ACE) Inhibitor or
                       Angiotensin Receptor
                       Blocker (ARB) Therapy
                       for Patients with CAD
                       and Diabetes and/or
                       Left Ventricular
                       Systolic Dysfunction
                       (LVSD).
119.................  Diabetes Mellitus:                   0062  NCQA..............  Claims, Registry.
                       Urine Screening for
                       Microalbumin or
                       Medical Attention for
                       Nephropathy in
                       Diabetic Patients.
121.................  Chronic Kidney Disease                N/A  AMA-PCPI..........  Claims, Registry.
                       (CKD): Laboratory
                       Testing (Calcium,
                       Phosphorus, Intact
                       Parathyroid Hormone
                       (iPTH) and Lipid
                       Profile).
122.................  Chronic Kidney Disease        AQA adopted  AMA-PCPI..........  Claims, Registry.
                       (CKD): Blood Pressure
                       Management.
123.................  Chronic Kidney Disease        AQA adopted  AMA-PCPI..........  Claims, Registry.
                       (CKD): Plan of Care--
                       Elevated Hemoglobin
                       for Patients Receiving
                       Erythropoiesis-
                       Stimulating Agents
                       (ESA).
124.................  Health Information                   0488  CMS/QIP...........  Claims, Registry.
                       Technology (HIT):
                       Adoption/Use of
                       Electronic Health
                       Records (EHR).
126.................  Diabetes Mellitus:                   0417  APMA..............  Claims, Registry.
                       Diabetic Foot and
                       Ankle Care, Peripheral
                       Neuropathy--Neurologic
                       al Evaluation.
127.................  Diabetes Mellitus:                   0416  APMA..............  Claims, Registry.
                       Diabetic Foot and
                       Ankle Care, Ulcer
                       Prevention--Evaluation
                       of Footwear.
128.................  Preventive Care and                  0421  CMS/QIP...........  Claims, Registry.
                       Screening: Body Mass
                       Index (BMI) Screening
                       and Follow-Up.
130.................  Documentation of                     0419  CMS/QIP...........  Claims, Registry.
                       Current Medications in
                       the Medical Record.
131.................  Pain Assessment Prior                0420  CMS/QIP...........  Claims, Registry.
                       to Initiation of
                       Patient Therapy and
                       Follow-Up.
134.................  Screening for Clinical               0418  CMS/QIP...........  Claims, Registry.
                       Depression and Follow-
                       Up Plan.
135.................  Chronic Kidney Disease        AQA adopted  AMA-PCPI..........  Claims, Registry.
                       (CKD): Influenza
                       Immunization.
137.................  Melanoma: Continuity of              0650  AMA-PCPI/NCQA.....  Registry.
                       Care--Recall System.
138.................  Melanoma: Coordination               0561  AMA-PCPI/NCQA.....  Registry.
                       of Care.
140.................  Age-Related Macular                  0566  AMA-PCPI/NCQA.....  Claims, Registry.
                       Degeneration (AMD):
                       Counseling on
                       Antioxidant Supplement.

[[Page 42868]]

 
141.................  Primary Open-Angle                   0563  AMA-PCPI/NCQA.....  Claims, Registry.
                       Glaucoma (POAG):
                       Reduction of
                       Intraocular Pressure
                       (IOP) by 15% OR
                       Documentation of a
                       Plan of Care.
142.................  Osteoarthritis (OA):                 0051  AMA-PCPI..........  Claims, Registry.
                       Assessment for Use of
                       Anti-Inflammatory or
                       Analgesic Over-the-
                       Counter (OTC)
                       Medications.
143.................  Oncology: Medical and                0384  AMA-PCPI..........  Registry.
                       Radiation--Pain
                       Intensity Quantified.
144.................  Oncology: Medical and                0383  AMA-PCPI..........  Registry.
                       Radiation--Plan of
                       Care for Pain.
145.................  Radiology: Exposure                  0510  AMA-PCPI/NCQA.....  Claims, Registry.
                       Time Reported for
                       Procedures Using
                       Fluoroscopy.
146.................  Radiology:                           0508  AMA-PCPI/NCQA.....  Claims, Registry.
                       Inappropriate Use of
                       ``Probably Benign''
                       Assessment Category in
                       Mammography Screening.
147.................  Nuclear Medicine:                    0511  AMA-PCPI..........  Claims, Registry.
                       Correlation with
                       Existing Imaging
                       Studies for All
                       Patients Undergoing
                       Bone Scintigraphy.
153.................  Chronic Kidney Disease        AQA adopted  AMA-PCPI..........  Claims, Registry.
                       (CKD): Referral for
                       Arteriovenous (AV)
                       Fistula.
154.................  Falls: Risk Assessment.       AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
155.................  Falls: Plan of Care....       AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
156.................  Oncology: Radiation                  0382  AMA-PCPI..........  Claims, Registry.
                       Dose Limits to Normal
                       Tissues.
157.................  Thoracic Surgery:                    0455  STS...............  Claims, Registry.
                       Recording of Clinical
                       Stage for Lung Cancer
                       and Esophageal Cancer
                       Resection.
158.................  Carotid Endarterectomy:              0466  SVS...............  Claims, Registry.
                       Use of Patch During
                       Conventional Carotid
                       Endarterectomy.
159.................  HIV/AIDS: CD4+ Cell                  0404  AMA-PCPI/NCQA.....  Registry.
                       Count or CD4+
                       Percentage.
160.................  HIV/AIDS: Pneumocystis               0405  AMA-PCPI/NCQA.....  Registry.
                       Jiroveci Pneumonia
                       (PCP) Prophylaxis.
161.................  HIV/AIDS: Adolescent                 0406  AMA-PCPI/NCQA.....  Registry.
                       and Adult Patients
                       with HIV/AIDS Who Are
                       Prescribed Potent
                       Antiretroviral Therapy.
162.................  HIV/AIDS: HIV RNA                    0407  AMA-PCPI/NCQA.....  Registry.
                       Control After Six
                       Months of Potent
                       Antiretroviral Therapy.
163.................  Diabetes Mellitus: Foot              0056  NCQA..............  Claims, Registry.
                       Exam.
164.................  Coronary Artery Bypass               0129  STS...............  Registry.
                       Graft (CABG):
                       Prolonged Intubation
                       (Ventilation).
165.................  Coronary Artery Bypass               0130  STS...............  Registry.
                       Graft (CABG): Deep
                       Sternal Wound
                       Infection Rate.
166.................  Coronary Artery Bypass               0131  STS...............  Registry.
                       Graft (CABG): Stroke/
                       Cerebrovascular
                       Accident (CVA).
167.................  Coronary Artery Bypass               0114  STS...............  Registry.
                       Graft (CABG):
                       Postoperative Renal
                       Insufficiency.
168.................  Coronary Artery Bypass               0115  STS...............  Registry.
                       Graft (CABG): Surgical
                       Re-exploration.
169.................  Coronary Artery Bypass               0237  STS...............  Registry.
                       Graft (CABG):
                       Antiplatelet
                       Medications at
                       Discharge.
170.................  Coronary Artery Bypass               0238  STS...............  Registry.
                       Graft (CABG): Beta-
                       Blockers Administered
                       at Discharge.
171.................  Coronary Artery Bypass               0118  STS...............  Registry.
                       Graft (CABG): Lipid
                       Management and
                       Counseling.
172.................  Hemodialysis Vascular                0259  SVS...............  Claims, Registry.
                       Access Decision-Making
                       by Surgeon to Maximize
                       Placement of
                       Autogenous Arterial
                       Venous (AV) Fistula.
173.................  Preventive Care and           AQA adopted  AMA-PCPI..........  Claims, Registry.
                       Screening: Unhealthy
                       Alcohol Use--Screening.
175.................  Pediatric End Stage           AQA adopted  AMA-PCPI..........  Claims, Registry.
                       Renal Disease (ESRD):
                       Influenza Immunization.
176.................  Rheumatoid Arthritis          AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       (RA): Tuberculosis
                       Screening.
177.................  Rheumatoid Arthritis          AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       (RA): Periodic
                       Assessment of Disease
                       Activity.
178.................  Rheumatoid Arthritis          AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       (RA): Functional
                       Status Assessment.
179.................  Rheumatoid Arthritis          AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       (RA): Assessment and
                       Classification of
                       Disease Prognosis.
180.................  Rheumatoid Arthritis          AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       (RA): Glucocorticoid
                       Management.
181.................  Elder Maltreatment            AQA adopted  CMS/QIP...........  Claims, Registry.
                       Screen and Follow-Up
                       Plan.
182.................  Functional Outcome            AQA adopted  CMS/QIP...........  Claims, Registry.
                       Assessment in
                       Chiropractic Care.

[[Page 42869]]

 
183.................  Hepatitis C: Hepatitis               0399  AMA-PCPI..........  Claims, Registry.
                       A Vaccination in
                       Patients with HCV.
184.................  Hepatitis C: Hepatitis               0400  AMA-PCPI..........  Claims, Registry.
                       B Vaccination in
                       Patients with HCV.
185.................  Endoscopy & Polyp                    0659  AMA-PCPI/NCQA.....  Claims, Registry.
                       Surveillance:
                       Colonoscopy Interval
                       for Patients with a
                       History of Adenomatous
                       Polyps--Avoidance of
                       Inappropriate Use.
186.................  Wound Care: Use of            AQA adopted  AMA-PCPI/NCQA.....  Claims, Registry.
                       Compression System in
                       Patients with Venous
                       Ulcers.
187.................  Stroke and Stroke                    0437  AHA/ASA/TJC.......  Registry.
                       Rehabilitation:
                       Thrombolytic Therapy.
188.................  Referral for Otologic                 N/A  AQC...............  Claims, Registry.
                       Evaluation for
                       Patients with
                       Congenital or
                       Traumatic Deformity of
                       the Ear.
189.................  Referral for Otologic                 N/A  AQC...............  Claims, Registry.
                       Evaluation for
                       Patients with History
                       of Active Drainage
                       From the Ear Within
                       the Previous 90 Days.
190.................  Referral for Otologic                 N/A  AQC...............  Claims, Registry.
                       Evaluation for
                       Patients with a
                       History of Sudden or
                       Rapidly Progressive
                       Hearing Loss.
191.................  Cataracts: 20/40 or                  0565  AMA-PCPI/NCQA.....  Registry.
                       Better Visual Acuity
                       Within 90 Days
                       Following Cataract
                       Surgery.
192.................  Cataracts:                           0564  AMA-PCPI/NCQA.....  Registry.
                       Complications within
                       30 Days Following
                       Cataract Surgery
                       Requiring Additional
                       Surgical Procedures.
193.................  Perioperative                        0454  AMA-PCPI..........  Claims, Registry.
                       Temperature Management.
194.................  Oncology: Cancer Stage               0386  AMA-PCPI/ASCO.....  Claims, Registry.
                       Documented.
195.................  Radiology: Stenosis                  0507  AMA-PCPI/NCQA.....  Claims, Registry.
                       Measurement in Carotid
                       Imaging Studies.
196.................  Coronary Artery Disease              0065  AMA-PCPI..........  Registry.
                       (CAD): Symptom and
                       Activity Assessment.
197.................  Coronary Artery Disease              0074  AMA-PCPI..........  Registry.
                       (CAD): Lipid Control.
198.................  Heart Failure: Left                  0079  AMA-PCPI..........  Registry.
                       Ventricular Function
                       (LVF) Assessment.
199.................  Heart Failure: Patient               0082  AMA-PCPI..........  Registry.
                       Education.
200.................  Heart Failure: Warfarin              0084  AMA-PCPI..........  Registry.
                       Therapy for Patients
                       with Atrial
                       Fibrillation.
201.................  Ischemic Vascular                    0073  NCQA..............  Claims, Registry.
                       Disease (IVD): Blood
                       Pressure Management
                       Control.
202.................  Ischemic Vascular                    0075  NCQA..............  Claims, Registry.
                       Disease (IVD):
                       Complete Lipid Profile.
203.................  Ischemic Vascular                    0075  NCQA..............  Claims, Registry.
                       Disease (IVD): Low
                       Density Lipoprotein
                       (LDL-C) Control.
204.................  Ischemic Vascular                    0068  NCQA..............  Claims, Registry.
                       Disease (IVD): Use of
                       Aspirin or Another
                       Antithrombotic.
205.................  HIV/AIDS: Sexually                   0409  AMA-PCPI/NCQA.....  Registry.
                       Transmitted Disease
                       Screening for
                       Chlamydia and
                       Gonorrhea.
206.................  HIV/AIDS: Screening for              0413  AMA-PCPI/NCQA.....  Registry.
                       High Risk Sexual
                       Behaviors.
207.................  HIV/AIDS: Screening for              0415  AMA-PCPI/NCQA.....  Registry.
                       Injection Drug Use.
208.................  HIV/AIDS: Sexually                   0410  AMA-PCPI/NCQA.....  Registry.
                       Transmitted Disease
                       Screening for Syphilis.
209.................  Functional                           0445  ASHA..............  Registry.
                       Communication Measure-
                       Spoken Language
                       Comprehension.
210.................  Functional                           0449  ASHA..............  Registry.
                       Communication Measure-
                       Attention.
211.................  Functional                           0448  ASHA..............  Registry.
                       Communication Measure-
                       Memory.
212.................  Functional                           0447  ASHA..............  Registry.
                       Communication Measure-
                       Motor Speech.
213.................  Functional                           0446  ASHA..............  Registry.
                       Communication Measure-
                       Reading.
214.................  Functional                           0444  ASHA..............  Registry.
                       Communication Measure-
                       Spoken Language
                       Expression.
215.................  Functional                           0442  ASHA..............  Registry.
                       Communication Measure-
                       Writing.
216.................  Functional                           0443  ASHA..............  Registry.
                       Communication Measure-
                       Swallowing.
217.................  Functional Deficit:                  0422  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Knee Impairments.
218.................  Functional Deficit:                  0423  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Hip Impairments.
219.................  Functional Deficit:                  0424  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Lower Leg, Foot
                       or Ankle Impairments.
220.................  Functional Deficit:                  0425  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Lumbar Spine
                       Impairments.

[[Page 42870]]

 
221.................  Functional Deficit:                  0426  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Shoulder
                       Impairments.
222.................  Functional Deficit:                  0427  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Elbow, Wrist or
                       Hand Impairments.
223.................  Functional Deficit:                  0428  FOTO..............  Registry.
                       Change in Risk-
                       Adjusted Functional
                       Status for Patients
                       with Neck, Cranium,
                       Mandible, Thoracic
                       Spine, Ribs, or Other
                       General Orthopedic
                       Impairments.
224.................  Melanoma:                            0562  AMA-PCPI..........  Registry.
                       Overutilization of
                       Imaging Studies in
                       Stage 0-IA Melanoma.
225.................  Radiology: Reminder                  0509  AMA-PCPI..........  Claims, Registry.
                       System for Mammograms.
226.................  Preventive Care and                  0028  AMA-PCPI..........  Claims, Registry.
                       Screening: Tobacco
                       Use: Screening and
                       Cessation Intervention.
228.................  Heart Failure (HF):                  0079  CMS...............  Registry.
                       Left Ventricular
                       Function (LVF) Testing.
231.................  Asthma: Tobacco Use:                  N/A  AMA-PCPI..........  Claims, Registry.
                       Screening-Ambulatory
                       Care Setting.
232.................  Asthma: Tobacco Use:                  N/A  AMA-PCPI..........  Claims, Registry.
                       Intervention-
                       Ambulatory Care
                       Setting.
233.................  Thoracic Surgery:                    0457  STS...............  Registry.
                       Recording of
                       Performance Status
                       Prior to Lung or
                       Esophageal Cancer
                       Resection.
234.................  Thoracic Surgery:                    0458  STS...............  Registry.
                       Pulmonary Function
                       Tests Before Major
                       Anatomic Lung
                       Resection
                       (Pneumonectomy,
                       Lobectomy, or Formal
                       Segmentectomy).
235.................  Hypertension (HTN):                  0017  AMA-PCPI..........  Claims, Registry.
                       Plan of Care.
TBD.................  Chronic Wound Care: Use               N/A  ASPS-PCPI-NCQA....  Claims, Registry.
                       of Wound Surface
                       Culture Technique in
                       Patients with Chronic
                       Skin Ulcers.
TBD.................  Chronic Wound Care: Use               N/A  ASPS-PCPI-NCQA....  Claims, Registry.
                       of Wet to Dry
                       Dressings in Patients
                       with Chronic Skin
                       Ulcers.
TBD.................  Substance Use                 AQA adopted  ASPS-PCPI-NCQA....  Claims, Registry.
                       Disorders: Counseling
                       Regarding Psychosocial
                       and Pharmacologic
                       Treatment Options for
                       Alcohol Dependence.
TBD.................  Substance Use                 AQA adopted  ASPS-PCPI-NCQA....  Claims, Registry.
                       Disorders: Screening
                       for Depression Among
                       Patients with
                       Substance Abuse or
                       Dependence.
TBD.................  Coronary Artery Disease               N/A  ASPS-PCPI-NCQA....  Registry.
                       (CAD): Symptom
                       Management.
TBD.................  Cardiac Rehabilitation                N/A  ACCF-AHA..........  Registry.
                       Patient Referral From
                       an Outpatient Setting.
TBD.................  Hypertension: Blood                   N/A  ACC-AHA-PCPI......  Registry.
                       Pressure Control.
TBD.................  Barrett's Esophagus....               N/A  CAP...............  Claims, Registry.
TBD.................  Radical Prostatectomy                 N/A  CAP...............  Claims, Registry.
                       Pathology Reporting.
TBD.................  Immunohistochemical                   N/A  College of          Claims, Registry.
                       (IHC) Evaluation of                        American
                       HER2 for Breast Cancer                     Pathologists.
                       Patients.
TBD.................  Anticoagulation for                  0503  ACEP..............  Claims, Registry.
                       Acute Pulmonary
                       Embolus Patients.
TBD.................  Pregnancy Test for                   0502  ACEP..............  Claims, Registry.
                       Female Abdominal Pain
                       Patients.
TBD.................  Ultrasound                            N/A  ACEP..............  Claims, Registry.
                       Determination of
                       Pregnancy Location for
                       Pregnant Patients with
                       Abdominal Pain.
TBD.................  Rh Immunoglobulin                     N/A  ACEP..............  Registry.
                       (Rhogam) for Rh
                       Negative Pregnant
                       Women at Risk of Fetal
                       Blood Exposure.
TBD.................  Surveillance after                    N/A  SVS...............  Registry.
                       Endovascular Abdominal
                       Aortic Aneurysm Repair
                       (EVAR).
TBD.................  Statin Therapy at                     N/A  SVS...............  Registry.
                       Discharge after Lower
                       Extremity Bypass (LEB).
TBD.................  Rate of Open AAA Repair               N/A  SVS...............  Registry.
                       without Major
                       Complications
                       (discharged to home no
                       later than post-
                       operative day 7).
TBD.................  Rate of EVAR without                  N/A  SVS...............  Registry.
                       Major Complications
                       (discharged to home no
                       later than POD 2).
TBD.................  Rate of Carotid                       N/A  SVS...............  Registry.
                       Endarterectomy for
                       Asymptomatic Patients,
                       without Major
                       Complications
                       (discharged to home no
                       later than post-
                       operative day 2).
TBD.................  Referral for Otology                  N/A  AQC...............  Claims, Registry.
                       Evaluation for
                       Patients with Acute or
                       Chronic Dizziness.
TBD.................  Image Confirmation of                 N/A  ASBS..............  Claims, Registry.
                       Successful Excision of
                       Image-Localized Breast
                       Lesion.
TBD.................  Preoperative Diagnosis                N/A  ASBS..............  Claims, Registry.
                       of Breast Cancer.

[[Page 42871]]

 
TBD.................  Sentinel Lymph Node                   N/A  ASBS..............  Registry.
                       Biopsy for Invasive
                       Breast Cancer.
TBD.................  Biopsy Follow-up.......               N/A  AAD...............  Registry.
TBD.................  Improvement in                        N/A  AAO...............  Registry.
                       Patient's Visual
                       Function within 90
                       Days Following
                       Cataract Surgery.
TBD.................  Patient Satisfaction                  N/A  AAO...............  Registry.
                       within 90 Days
                       Following Cataract
                       Surgery.
----------------------------------------------------------------------------------------------------------------

(C) Proposed 2012 Measures Available for EHR-Based Reporting
    For 2012, we propose to again accept Physician Quality Reporting 
System data from EHRs for a limited subset of 2012 Physician Quality 
Reporting System quality measures.
    Section 1848(m)(7) of the Act (``Integration of Physician Quality 
Reporting and EHR Reporting''), as added by section 3002(d) of the 
Affordable Care Act, requires that by no later than January 1, 2012, 
the Secretary shall develop a plan to integrate reporting on quality 
measures under the Physician Quality Reporting System with reporting 
requirements under the EHR Incentive Program under section 1848(o) of 
the Act relating to the meaningful use of EHRs. Such integration shall 
consist of the following:
    (A) The selection of measures, the reporting of which would both 
demonstrate--
    (i) Meaningful use of an EHR for purposes of the Medicare EHR 
Incentive Program; and
    (ii) Quality of care furnished to an individual; and
    (B) Such other activities as specified by the Secretary.
    To align the Physician Quality Reporting System with the Medicare 
EHR Incentive Program, we propose to include all clinical quality 
measures available for reporting under the Medicare EHR Incentive 
Program (75 FR 44398 through 44408) in the EHR-Based reporting option 
in the 2012 Physician Quality Reporting System for purposes of 
reporting data on quality measures under the EHR-reporting option. In 
2011, we included 14 of the 44 EHR Incentive Program measures under the 
2011 Physician Quality Reporting System EHR reporting mechanism. In 
order to better align Physician Quality Reporting System measures with 
those under the EHR Incentive Program, for 2012, we propose to have the 
rest of the 44 clinical quality measures in the Medicare EHR Incentive 
Program available for EHR-Based reporting under the 2012 Physician 
Quality Reporting System.
    Furthermore, for 2012, we propose to retain the following 6 
additional measures that were available for reporting under the EHR-
Based reporting mechanism under the 2011 Physician Quality Reporting 
System:
     Measure  39: Screening or Therapy for 
Osteoporosis for Women Aged 65 Years and Older.
     Measure  47: Advance Care Plan.
     Measure  48: Urinary Incontinence: Assessment of 
Presence or Absence of Urinary Incontinence in Women Aged 65 Years and 
Older.
     Measure  124: Health Information Technology 
(HIT): Adoption/Use of Electronic Health Records (EHR).
     Measure  173: Preventive Care and Screening: 
Unhealthy Alcohol Use--Screening.
     Measure  238: Drugs to be Avoided in the Elderly.
    We believe these measures meet the criteria listed previously for 
inclusion for reporting under the Physician Quality Reporting System.
    Table 31 identifies the list of measures we propose to include for 
EHR-Based reporting under the 2012 Physician Quality Reporting System.

      Table 31--Proposed 2012 Physician Quality Reporting System Measures Available for EHR-Based Reporting
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
                           MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM CORE MEASURES
----------------------------------------------------------------------------------------------------------------
128.......................  Preventive Care and Screening:              0421  CMS/QIP
                             Body Mass Index (BMI)
                             Screening and Follow-up *.
237.......................  Hypertension (HTN): Blood                   0013  AMA-PCPI
                             Pressure Measurement.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention **.
----------------------------------------------------------------------------------------------------------------
                      MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM ALTERNATE CORE MEASURES
----------------------------------------------------------------------------------------------------------------
110.......................  Preventative Care and                       0041  AMA-PCPI
                             Screening: Influenza
                             Immunization for Patients >=
                             50 Years Old.
239.......................  Weight Assessment and                       0024  NCQA
                             Counseling for Children and
                             Adolescents.
TBD.......................  Childhood Immunization Status.              0038  NCQA
----------------------------------------------------------------------------------------------------------------
                              MEASURES THAT ARE ALSO EHR INCENTIVE PROGRAM MEASURES
----------------------------------------------------------------------------------------------------------------
1.........................  Diabetes Mellitus: Hemoglobin               0059  NCQA
                             A1c Poor Control in Diabetes
                             Mellitus.
2.........................  Diabetes Mellitus: Low Density              0064  NCQA
                             Lipoprotein (LDL-C) Control
                             in Diabetes Mellitus.
3.........................  Diabetes Mellitus: High Blood               0061  NCQA
                             Pressure Control in Diabetes
                             Mellitus.

[[Page 42872]]

 
5.........................  Heart Failure: Angiotensin                  0081  AMA-PCPI
                             Receptor Blocker (ARB)
                             Therapy for Left Ventricular
                             Systolic Dysfunction (LVSD).
6.........................  Coronary Artery Disease (CAD):              0067  AMA-PCPI
                             Oral Antiplatelet Therapy
                             Prescribed for Patients with
                             CAD.
7.........................  Coronary Artery Disease (CAD):              0070  AMA-PCPI
                             Beta-Blocker Therapy for CAD
                             Patients with Prior
                             Myocardial Infarction (MI).
8.........................  Heart Failure (HF): Beta-                   0083  AMA-PCPI
                             Blocker Therapy for Left
                             Ventricular Systolic
                             Dysfunction (LVSD).
9.........................  Anti-depressant medication                  0105  NCQA
                             management: (a) Effective
                             Acute Phase Treatment, (b)
                             Effective Continuation Phase
                             Treatment.
12........................  Primary Open Angle Glaucoma                 0086  AMA-PCPI
                             (POAG): Optic Nerve
                             Evaluation.
18........................  Diabetic Retinopathy:                       0088  AMA-PCPI
                             Documentation of Presence or
                             Absence of Macular Edema and
                             Level of Severity of
                             Retinopathy.
19........................  Diabetic Retinopathy:                       0089  AMA-PCPI
                             Communication with the
                             Physician Managing Ongoing
                             Diabetes Care.
53........................  Asthma Pharmacologic..........              0047  AMA-PCPI
64........................  Asthma Assessment.............              0001  AMA-PCPI
66........................  Appropriate Testing for                     0002  NCQA
                             Children with Pharyngitis.
71........................  Oncology Breast Cancer:                     0387  AMA-PCPI
                             Hormonal Therapy for Stage IC-
                             IIIC Estrogen Receptor/
                             Progesterone Receptor (ER/PR)
                             Positive Breast Cancer.
72........................  Oncology Colon Cancer:                      0385  AMA-PCPI
                             Chemotherapy for Stage III
                             Colon Cancer Patients.
102.......................  Prostate Cancer: Avoidance of               0389  AMA-PCPI
                             Overuse of Bone Scan for
                             Staging Low Risk Prostate
                             Cancer Patients.
111.......................  Preventive Care and Screening:              0043  NCQA
                             Screening Mammography.
112.......................  Preventive Care and Screening:              0031  NCQA
                             Colorectal Cancer Screening.
113.......................  Colorectal Cancer Screening...              0034  NCQA
114 & 115.................  Smoking and Tobacco Use                     0027  NCQA
                             Cessation, Medical
                             Assistance: a. Advising
                             Smokers to Quit, b.
                             Discussing Smoking and
                             Tobacco Use Cessation
                             Medications, c. Discussing
                             Smoking and Tobacco Use
                             Cessation Strategies.
117.......................  Diabetes: Eye Exam............              0055  AMA-PCPI
119.......................  Diabetes: Urine Screening.....              0062  NCQA
163.......................  Diabetes: Foot Exam...........              0056  NCQA
197.......................  Coronary Artery Disease (CAD):              0074  AMA-PCPI
                             Lipid Control.
200.......................  Heart Failure: Warfarin                     0084  AMA-PCPI
                             Therapy Patients with Atrial
                             Fibrillation.
201.......................  Ischemic Vascular Disease                   0073  NCQA
                             (IVD): Blood Pressure
                             Management.
204.......................  Ischemic Vascular Disease                   0068  NCQA
                             (IVD): Use of Aspirin or
                             Another Antithrombotic.
TBD.......................  Initiation and Engagement of                0004  NCQA
                             Alcohol and Other Drug
                             Dependence Treatment: (a)
                             Initiation, (b) Engagement.
TBD.......................  Prenatal Care: Screening for                0012  AMA-PCPI
                             Human Immunodeficiency Virus
                             (HIV).
TBD.......................  Prenatal Care: Anti-D Immune                0014  AMA-PCPI
                             Globulin.
236.......................  Controlling High Blood                      0018  NCQA
                             Pressure.
TBD.......................  Cervical Cancer Screening.....              0032  NCQA
TBD.......................  Chlamydia Screening for Women.              0033  NCQA
240.......................  Use of Appropriate Medications              0036  NCQA
                             for Asthma.
TBD.......................  Low Back Pain: Use of Imaging               0052  NCQA
                             Studies.
202 & 203.................  Ischemic Vascular Disease                   0075  NCQA
                             (IVD): Complete Lipid Panel
                             and LDL Control.
TBD.......................  Diabetes: Hemoglobin A1c                    0575  NCQA
                             Control (< 8.0%).
----------------------------------------------------------------------------------------------------------------
                              OTHER PHYSICIAN QUALITY REPORTING SYSTEM EHR MEASURES
----------------------------------------------------------------------------------------------------------------
39........................  Screening or Therapy for                    0046  AMA-PCPI/NCQA
                             Osteoporosis for Women Aged
                             65 Years and Older.
47........................  Advance Care Plan.............              0326  AMA-PCPI/NCQA
48........................  Urinary Incontinence:                       0098  AMA-PCPI/NCQA
                             Assessment of Presence or
                             Absence of Urinary
                             Incontinence in Women Aged 65
                             Years and Older.
124.......................  Health Information Technology               0488  CMS/QIP
                             (HIT): Adoption/Use of
                             Electronic Health Records
                             (EHR).
173.......................  Preventive Care and Screening:       AQA Adopted  AMA-PCPI
                             Unhealthy Alcohol Use--
                             Screening.
238.......................  Drugs to be Avoided in the                  0022  NCQA
                             Elderly.
----------------------------------------------------------------------------------------------------------------
* For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this
  measure will count if at least one of the two parameters does not contain a 0 percent performance rate.
** For the purpose of reporting this measure under the Physician Quality Reporting System, the reporting of this
  measure will count if at least one of the two pairs does not contain a 0 percent performance rate.


[[Page 42873]]

(4) 2012 Physician Quality Reporting System Measures Groups
    We propose to retain the following 14 2011 Physician Quality 
Reporting System measures groups for the 2012 Physician Quality 
Reporting System: (1) Diabetes Mellitus; (2) CKD; (3) Preventive Care; 
(4) CABG; (5) Rheumatoid Arthritis; (6) Perioperative Care; (7) Back 
Pain; (8) CAD; (9) Heart Failure; (10) IVD; (11) Hepatitis C; (12) HIV/
AIDS; (13) CAP, and (14) Asthma. For 2012, we propose that the CABG, 
CAD, Heart Failure, and HIV/AIDS measures groups would continue to be 
reportable through the registry-based reporting mechanism only, while 
the remaining Diabetes Mellitus, CKD, Preventive Care, Rheumatoid 
Arthritis, Perioperative Care, Back Pain, IVD, Hepatitis C, CAP, and 
Asthma measures groups would continue to be reportable through either 
claims-based reporting or registry-based reporting for the 2012 
Physician Quality Reporting System. We are retaining these measures 
groups for the 2012 Physician Quality Reporting System particularly 
because we believe the measures groups reflect the services furnished 
to beneficiaries by a particular specialty. We also believe that 
retaining these measures groups will provide consistency from program 
year to program year.
    In addition to the 14 measures groups previously, we propose the 
following 10 new measures groups for 2012 to provide eligible 
professionals with more measures groups on which to report:
     Chronic Obstructive Pulmonary Disease (COPD).
     Inflammatory Bowel Disease.
     Sleep Apnea.
     Epilepsy.
     Dementia.
     Parkinson's.
     Elevated Blood Pressure.
     Radiology.
     Cardiovascular Prevention, which contains individual 
measures from the proposed Physician Quality Reporting System core 
measure set previously discussed.
     Cataracts.
    These are the measures groups that were presented to us for 
inclusion for reporting under the 2012 Physician Quality Reporting 
System. Section 1848(k)(2)(C)(ii) of the Act provides an exception to 
the requirement that measures be endorsed by the NQF. We may exercise 
this exception authority in a specified area or medical topic for which 
a feasible and practical measure has not been endorsed by NQF, so long 
as due consideration is given to measures that have been endorsed by 
the NQF. For the measures contained within these measures groups that 
are not currently NQF-endorsed, we are proposing to exercise this 
authority due to our interest in all of the proposed 10 measures 
group's topics. We believe that each of the proposed additional 
measures groups address gaps in the Physician Quality Reporting System 
measures groups and will also allow for greater reporting options for 
individual eligible professionals, thereby increasing participation in 
the Physician Quality Reporting System.
    Finally, as in previous program years, for 2012, we propose that 
the measures included in any proposed 2012 measures group be reportable 
either as individual measures or as part of a measures group, except 
for the Back Pain measures group, which would continue to be reportable 
only as part of a measures group and not as individual measures in 
2012.
    As with measures group reporting in prior program years, we propose 
that each eligible professional electing to report a group of measures 
for 2012 must report all measures in the group that are applicable to 
each patient or encounter to which the measures group applies at least 
up to the minimum number of patients required by the applicable 
reporting criteria.
    The measures proposed for inclusion in each of the 2012 measures 
groups are identified in Tables 32 through 55 of this proposed rule. 
Some measures proposed for inclusion in the 2012 measures groups are 
also 2011 individual Physician Quality Reporting System measures. The 
title of each such measure is preceded with its Physician Quality 
Reporting System Measure Number in Tables 32 through 55. As stated 
previously, the Physician Quality Reporting System Measure Number is a 
unique identifier assigned by us to all measures in the Physician 
Quality Reporting System measure set. Once a Physician Quality 
Reporting System Measure Number is assigned to a measure, it will not 
be used again, even if the measure is subsequently retired from the 
Physician Quality Reporting System measure set. Measures that are not 
preceded by a number (in other words, those preceded by ``TBD'') in 
Tables 32 through 55 were never part of a Physician Quality Reporting 
System measure set prior to 2012. A number will be assigned to such 
measures for 2012.

           Table 32--Proposed Measures Included in the Proposed 2012 Diabetes Mellitus Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
1.........................  Diabetes Mellitus: Hemoglobin               0059  NCQA
                             A1c Poor Control in Diabetes
                             Mellitus.
2.........................  Diabetes Mellitus: Low Density              0064  NCQA
                             Lipoprotein (LDL-C) Control
                             in Diabetes Mellitus.
3.........................  Diabetes Mellitus: High Blood               0061  NCQA
                             Pressure Control in Diabetes
                             Mellitus.
117.......................  Diabetes Mellitus: Dilated Eye              0055  NCQA
                             Exam in Diabetic Patient.
119.......................  Diabetes Mellitus: Urine                    0062  NCQA
                             Screening for Microalbumin or
                             Medical Attention for
                             Nephropathy in Diabetic
                             Patients.
163.......................  Diabetes Mellitus: Foot Exam..              0056  NCQA
----------------------------------------------------------------------------------------------------------------


                  Table 33--Proposed Measures Included in the Proposed 2012 CKD Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
121.......................  Chronic Kidney Disease (CKD):     Not applicable  AMA-PCPI
                             Laboratory Testing (Calcium,
                             Phosphorus, Intact
                             Parathyroid Hormone (iPTH)
                             and Lipid Profile).
122.......................  Chronic Kidney Disease (CKD):        AQA adopted  AMA-PCPI
                             Blood Pressure Management.

[[Page 42874]]

 
123.......................  Chronic Kidney Disease (CKD):        AQA adopted  AMA-PCPI
                             Plan of Care--Elevated
                             Hemoglobin for Patients
                             Receiving Erythropoiesis-
                             Stimulating Agents (ESA).
153.......................  Chronic Kidney Disease (CKD):        AQA adopted  AMA-PCPI
                             Referral for Arteriovenous
                             (AV) Fistula.
----------------------------------------------------------------------------------------------------------------


           Table 34--Proposed Measures Included in the Proposed 2012 Preventative Care Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
39........................  Screening or Therapy for                    0046  AMA-PCPI/NCQA
                             Osteoporosis for Women Aged
                             65 Years and Older.
48........................  Urinary Incontinence:                       0098  AMA-PCPI/NCQA
                             Assessment of Presence or
                             Absence of Urinary
                             Incontinence in Women Aged 65
                             Years and Older.
110.......................  Preventive Care and Screening:              0041  AMA-PCPI
                             Influenza Immunization for
                             Patients >= 50 Years Old.
111.......................  Preventive Care and Screening:              0043  NCQA
                             Pneumonia Vaccination for
                             Patients 65 Years and Older.
112.......................  Preventive Care and Screening:              0031  NCQA
                             Screening Mammography.
113.......................  Preventive Care and Screening:              0034  NCQA
                             Colorectal Cancer Screening.
128.......................  Preventive Care and Screening:              0421  CMS/QIP
                             Body Mass Index (BMI)
                             Screening and Follow-Up.
173.......................  Preventive Care and Screening:       AQA adopted  AMA-PCPI
                             Unhealthy Alcohol Use--
                             Screening.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention.
----------------------------------------------------------------------------------------------------------------


                 Table 35--Proposed Measures Included in the Proposed 2012 CABG Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
43........................  Coronary Artery Bypass Graft                0516  STS
                             (CABG): Use of Internal
                             Mammary Artery (IMA) in
                             Patients with Isolated CABG
                             Surgery.
44........................  Coronary Artery Bypass Graft                0235  STS
                             (CABG): Preoperative Beta-
                             Blocker in Patients with
                             Isolated CABG Surgery.
164.......................  Coronary Artery Bypass Graft                0129  STS
                             (CABG): Prolonged Intubation
                             (Ventilation).
165.......................  Coronary Artery Bypass Graft                0130  STS
                             (CABG): Deep Sternal Wound
                             Infection Rate.
166.......................  Coronary Artery Bypass Graft                0131  STS
                             (CABG): Stroke/
                             Cerebrovascular Accident
                             (CVA).
167.......................  Coronary Artery Bypass Graft                0114  STS
                             (CABG): Postoperative Renal
                             Insufficiency.
168.......................  Coronary Artery Bypass Graft                0115  STS
                             (CABG): Surgical Re-
                             exploration.
169.......................  Coronary Artery Bypass Graft                0237  STS
                             (CABG): Antiplatelet
                             Medications at Discharge.
170.......................  Coronary Artery Bypass Graft                0238  STS
                             (CABG): Beta-Blockers
                             Administered at Discharge.
171.......................  Coronary Artery Bypass Graft                0118  STS
                             (CABG): Lipid Management and
                             Counseling.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.


          Table 36--Proposed Measures Included in the Proposed 2012 Rheumatoid Arthritis Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
108.......................  Rheumatoid Arthritis (RA):                  0054  NCQA
                             Disease Modifying Anti-
                             Rheumatic Drug (DMARD)
                             Therapy.
176.......................  Rheumatoid Arthritis (RA):           AQA adopted  AMA-PCPI/NCQA
                             Tuberculosis Screening.
177.......................  Rheumatoid Arthritis (RA):           AQA adopted  AMA-PCPI/NCQA
                             Periodic Assessment of
                             Disease Activity.
178.......................  Rheumatoid Arthritis (RA):           AQA adopted  AMA-PCPI/NCQA
                             Functional Status Assessment.
179.......................  Rheumatoid Arthritis (RA):           AQA adopted  AMA-PCPI/NCQA
                             Assessment and Classification
                             of Disease Prognosis.
180.......................  Rheumatoid Arthritis (RA):           AQA adopted  AMA-PCPI/NCQA
                             Glucocorticoid Management.
----------------------------------------------------------------------------------------------------------------


           Table 37--Proposed Measures Included in the Proposed 2012 Perioperative Care Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF Measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
20........................  Perioperative Care: Timing of               0270  AMA-PCPI/NCQA
                             Antibiotic Prophylaxis--
                             Ordering Physician.

[[Page 42875]]

 
21........................  Perioperative Care: Selection               0268  AMA-PCPI/NCQA
                             of Prophylactic Antibiotic--
                             First OR Second Generation
                             Cephalosporin.
22........................  Perioperative Care:                         0271  AMA-PCPI/NCQA
                             Discontinuation of
                             Prophylactic Antibiotics (Non-
                             Cardiac Procedures).
23........................  Perioperative Care: Venous                  0239  AMA-PCPI/NCQA
                             Thromboembolism (VTE)
                             Prophylaxis (When Indicated
                             in ALL Patients).
----------------------------------------------------------------------------------------------------------------


               Table 38--Proposed Measures Included in the 2012 Proposed Back Pain Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
148.......................  Back Pain: Initial Visit......              0322  NCQA
149.......................  Back Pain: Physical Exam......              0319  NCQA
150.......................  Back Pain: Advice for Normal                0315  NCQA
                             Activities.
151.......................  Back Pain: Advice Against Bed               0313  NCQA
                             Rest.
----------------------------------------------------------------------------------------------------------------


                 Table 39--Proposed Measures Included in the Proposed 2012 CAD Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
6.........................  Coronary Artery Disease (CAD):              0067  AMA-PCPI
                             Oral Antiplatelet Therapy
                             Prescribed for Patients with
                             CAD.
196.......................  Coronary Artery Disease (CAD):              0065  AMA-PCPI
                             Symptom and Activity
                             Assessment.
197.......................  Coronary Artery Disease (CAD):              0074  AMA-PCPI
                             Lipid Control.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.


            Table 40--Proposed Measures Included in the Proposed 2012 Heart Failure Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
5.........................  Heart Failure:                              0081  AMA-PCPI
                             Angiotensin[dash]Converting
                             Enzyme (ACE) Inhibitor or
                             Angiotensin Receptor Blocker
                             (ARB) Therapy for Left
                             Ventricular Systolic
                             Dysfunction (LVSD).
8.........................  Heart Failure: Beta-Blocker                 0083  AMA-PCPI
                             Therapy for Left Ventricular
                             Systolic Dysfunction (LVSD).
198.......................  Heart Failure: Left                         0079  AMA-PCPI
                             Ventricular Function (LVF)
                             Assessment.
199.......................  Heart Failure: Patient                      0082  AMA-PCPI
                             Education.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable through registry-based reporting only.


                  Table 41--Proposed Measures Included in the Proposed 2012 IVD Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
201.......................  Ischemic Vascular Disease                   0073  NCQA
                             (IVD): Blood Pressure
                             Management Control.
202.......................  Ischemic Vascular Disease                   0075  NCQA
                             (IVD): Complete Lipid Profile.
203.......................  Ischemic Vascular Disease                   0075  NCQA
                             (IVD): Low Density
                             Lipoprotein (LDL-C) Control.
204.......................  Ischemic Vascular Disease                   0068  NCQA
                             (IVD): Use of Aspirin or
                             Another Antithrombotic.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention.
----------------------------------------------------------------------------------------------------------------


[[Page 42876]]


              Table 42--Proposed Measures Included in the Proposed 2012 Hepatitis C Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
84........................  Hepatitis C: Ribonucleic Acid               0395  AMA-PCPI
                             (RNA) Testing Before
                             Initiating Treatment.
85........................  Hepatitis C: HCV Genotype                   0396  AMA-PCPI
                             Testing Prior to Treatment.
86........................  Hepatitis C: Antiviral                      0397  AMA-PCPI
                             Treatment Prescribed.
87........................  Hepatitis C: HCV Ribonucleic                0398  AMA-PCPI
                             Acid (RNA) Testing at Week 12
                             of Treatment.
89........................  Hepatitis C: Counseling                     0401  AMA-PCPI
                             Regarding Risk of Alcohol
                             Consumption.
90........................  Hepatitis C: Counseling                     0394  AMA-PCPI
                             Regarding Use of
                             Contraception Prior to
                             Antiviral Therapy.
183.......................  Hepatitis C: Hepatitis A                    0399  AMA-PCPI
                             Vaccination in Patients with
                             HCV.
184.......................  Hepatitis C: Hepatitis B                    0400  AMA-PCPI
                             Vaccination in Patients with
                             HCV.
----------------------------------------------------------------------------------------------------------------


               Table 43--Proposed Measures Included in the Proposed 2012 HIV/AIDS Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
159.......................  HIV/AIDS: CD4+ Cell Count or                0404  AMA-PCPI/NCQA
                             CD4+ Percentage.
160.......................  HIV/AIDS: Pneumocystis                      0405  AMA-PCPI/NCQA
                             Jiroveci Pneumonia (PCP)
                             Prophylaxis.
161.......................  HIV/AIDS: Adolescent and Adult              0406  AMA-PCPI/NCQA
                             Patients with HIV/AIDS Who
                             Are Prescribed Potent
                             Antiretroviral Therapy.
162.......................  HIV/AIDS: HIV RNA Control                   0407  AMA-PCPI/NCQA
                             After Six Months of Potent
                             Antiretroviral Therapy.
205.......................  HIV/AIDS: Sexually Transmitted              0409  AMA-PCPI/NCQA
                             Disease Screening for
                             Chlamydia and Gonorrhea.
206.......................  HIV/AIDS: Screening for High                0413  AMA-PCPI/NCQA
                             Risk Sexual Behaviors.
207.......................  HIV/AIDS: Screening for                     0415  AMA-PCPI/NCQA
                             Injection Drug Use.
208.......................  HIV/AIDS: Sexually Transmitted              0410  AMA-PCPI/NCQA
                             Disease Screening for
                             Syphilis.
----------------------------------------------------------------------------------------------------------------
* This measures group is selected to be reportable through registry-based reporting only.


                  Table 44--Proposed Measures Included in the Proposed 2012 Cap Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
56........................  Community-Acquired Pneumonia                0232  AMA-PCPI/NCQA
                             (CAP): Vital Signs.
57........................  Community-Acquired Pneumonia                0094  AMA-PCPI/NCQA
                             (CAP): Assessment of Oxygen
                             Saturation.
58........................  Community-Acquired Pneumonia                0234  AMA-PCPI/NCQA
                             (CAP): Assessment of Mental
                             Status.
59........................  Community-Acquired Pneumonia                0096  AMA-PCPI/NCQA
                             (CAP): Empiric Antibiotic.
----------------------------------------------------------------------------------------------------------------


                 Table 45--Proposed Measures Included in the Proposed 2012 Asthma Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
53........................  Asthma: Pharmacologic Therapy.              0047  AMA-PCPI
64........................  Asthma: Asthma Assessment.....              0001  AMA-PCPI
231.......................  Asthma: Tobacco Use:                         N/A  AMA-PCPI
                             Screening--Ambulatory Setting.
232.......................  Asthma: Tobacco Use:                         N/A  AMA-PCPI
                             Intervention--Ambulatory
                             Screening.
----------------------------------------------------------------------------------------------------------------


                  Table 46--Proposed Measures Included in the Proposed 2012 COPD Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
110.......................  Preventive Care and Screening:              0041  AMA-PCPI
                             Influenza Immunization for
                             Patients >= 50 Years Old.
111.......................  Preventive Care and Screening:              0043  AMA-PCPI
                             Pneumonia Vaccination for
                             Patients 65 Years and Older.
51........................  Chronic Obstructive Pulmonary               0091  AMA-PCPI
                             Disease (COPD): Spirometry
                             Evaluation.
52........................  Chronic Obstructive Pulmonary               0102  AMA-PCPI
                             Disease (COPD):
                             Bronchodilator Therapy.
226.......................  Preventive Care and Screening:              0028  AMA-PCPI
                             Tobacco Use: Screening and
                             Cessation Intervention.
----------------------------------------------------------------------------------------------------------------


[[Page 42877]]


                 Table 47--Proposed Measures Included in the Proposed 2012 IBD Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Assessment of
                             Inflammatory Bowel Disease
                             Activity and Severity.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Preventive Care:
                             Steroid Sparing Therapy.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Preventive Care:
                             Steroid Related Iatrogenic
                             Injury--Bone Loss Assessment.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Preventive Care:
                             Influenza Immunization.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Preventive Care:
                             Pneumococcal Immunization.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Screening for Latent
                             TB Before Initiating Anti-TNF
                             Therapy.
TBD.......................  Inflammatory Bowel Disease                   N/A  AGA/AMA-PCPI
                             (IBD): Hepatitis B Assessment
                             Before Initiating Anti-TNF
                             Therapy.
226.......................  Preventative Care and                       0028  AMA-PCPI
                             Screening: Tobacco Use:
                             Screening and Cessation
                             Intervention.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.


             Table 48--Proposed Measures Included in the Proposed 2012 Sleep Apnea Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Assessment of Sleep Symptoms..               N/A  AMA/PCPI/AASM
TBD.......................  Severity Assessment at Initial               N/A  AMA/PCPI/AASM
                             Diagnosis.
TBD.......................  Positive Airway Pressure                     N/A  AMA/PCPI/AASM
                             Therapy Prescribed.
TBD.......................  Assessment of Adherence to                   N/A  AMA/PCPI/AASM
                             Positive Airway Pressure
                             Therapy.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.


                    Table 49--Proposed Measures in the Proposed 2012 Epilepsy Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Seizure Type(s) and Current                  N/A  AAN/AMA-PCPI
                             Seizure Frequency(ies).
TBD.......................  Documentation of Etiology of                 N/A  AAN/AMA-PCPI
                             Epilepsy or Epilepsy Syndrome.
TBD.......................  Querying and Counseling about                N/A  AAN/AMA-PCPI
                             Anti-Epileptic Drug (AED)
                             Side-Effects.
TBD.......................  Counseling about Epilepsy                    N/A  AAN/AMA-PCPI
                             Specific Safety Issues.
TBD.......................  Counseling for Women of                      N/A  AAN/AMA-PCPI
                             Childbearing Potential with
                             Epilepsy.
----------------------------------------------------------------------------------------------------------------


               Table 50--Proposed Measures Included in the Proposed 2012 Dementia Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Dementia: Staging of Dementia.               N/A  AAN/AGS/AMDA/APA/AMA-PCPI
TBD.......................  Dementia: Cognitive Assessment               N/A  AAN/AGS/AMDA/APA/AMA-PCPI
TBD.......................  Dementia: Functional Status                  N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Assessment.
TBD.......................  Dementia: Neuropsychiatric                   N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Symptom Assessment.
TBD.......................  Dementia: Management of                      N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Neuropsychiatric Symptoms.
TBD.......................  Dementia: Screening for                      N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Depressive Symptoms.
TBD.......................  Dementia: Counseling Regarding               N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Safety Concerns.
TBD.......................  Dementia: Counseling Regarding               N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             Risks of Driving.
TBD.......................  Dementia: Caregiver Education                N/A  AAN/AGS/AMDA/APA/AMA-PCPI
                             and Support.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.


[[Page 42878]]


             Table 51--Proposed Measures Included in the Proposed 2012 Parkinson's Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Annual Parkinson's Disease                   N/A  AAN
                             Diagnosis Review.
TBD.......................  Psychiatric Disorders or                     N/A  AAN
                             Disturbances Assessment.
TBD.......................  Cognitive Impairment or                      N/A  AAN
                             Dysfunction Assessment.
TBD.......................  Querying about Sleep                         N/A  AAN
                             Disturbances.
TBD.......................  Parkinson's Disease                          N/A  AAN
                             Rehabilitative Therapy
                             Options.
TBD.......................  Parkinson's Disease Related                  N/A  AAN
                             Safety Issues Counseling.
TBD.......................  Parkinson's Disease Medical                  N/A  AAN
                             and Surgical Treatment
                             Options Reviewed.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.


Table 52--Proposed Measures Included in the Proposed 2012 Elevated Blood
                        Pressure Measures Group *
------------------------------------------------------------------------
Physician quality
 reporting system      Measure title        NQF measure       Measure
       No.                                      No.          developer
------------------------------------------------------------------------
TBD..............  Aspirin or Other Anti- N/A...........  ABIM
                    Platelet or Anti-
                    Coagulant Therapy
TBD..............  Complete Lipid         N/A...........  ABIM
                    Profile.
TBD..............  Urine Protein Test...  N/A...........  ABIM
TBD..............  Annual Serum           N/A...........  ABIM
                    Creatinine Test.
TBD..............  Diabetes               N/A...........  ABIM
                    Documentation or
                    Screen Test.
TBD..............  Counseling for Diet    N/A...........  ABIM
                    and Physical
                    Activity.
TBD..............  Blood Pressure         N/A...........  ABIM
                    Control.
TBD..............  LDL Control..........  N/A...........  ABIM
TBD..............  Overall Hypertension   N/A...........  ABIM
                    Care Satisfaction.
TBD..............  Patient Self-care      N/A...........  ABIM
                    Support.
------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting
  only.


              TABLE 53--Proposed Measures Included in the Proposed 2012 Radiology Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Reporting to a Radiation Dose                N/A  ..................................
                             Index Registry.
TBD.......................  Cumulative Count of Potential                N/A  ABMS/ABR/ACR/PCPI
                             High Dose Radiation Imaging
                             Studies: CT Scans and Cardiac
                             Nuclear Medicine Scans
TBD.......................  Utilization of a Standardized                N/A  ABR
                             Nomenclature for CT Imaging
                             Description.
TBD.......................  Appropriateness:                             N/A  ABR
                             Follow[dash]up CT Imaging for
                             Incidental Pulmonary Nodules
                             According to Recommended
                             Guidelines.
TBD.......................  Overuse: Abdomen, Pelvis or                  N/A  ABR
                             Combined Abdomen/Pelvis CT
                             Studies.
TBD.......................  Equipment Evaluation for                     N/A  ABR
                             Pediatric CT Imaging
                             Protocols.
TBD.......................  Utilization of Pediatric CT                  N/A  ABR
                             Imaging Protocols.
TBD.......................  Search for Prior Imaging                     N/A  ABR
                             Studies through a Secure,
                             Authorized Media[dash]Free
                             Shared Archive.
TBD.......................  Images Available for Patient                 N/A  ABR
                             Follow[dash]up and Comparison
                             Purposes.
TBD.......................  Exposure Time Reported for                   N/A  PCPI/ACR/NCQA
                             Procedures Using Fluoroscopy.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.


       Table 54--Proposed Measures Included in the Proposed 2012 Cardiovascular Prevention Measures Group
----------------------------------------------------------------------------------------------------------------
     Physician quality
     reporting system                Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
204.......................  Ischemic Vascular Disease                   0068  NCQA
                             (IVD): Use of Aspirin or
                             Another Antithrombotic.
236.......................  Controlling High Blood                      0018  NCQA
                             Pressure.
2.........................  Diabetes Mellitus: Low Density              0064  NCQA
                             Lipoprotein (LDL-C) Control
                             in Diabetes Mellitus.
226.......................  Measure pair: a. Tobacco Use                0028  AMA-PCPI
                             Assessment, b. Tobacco
                             Cessation Intervention.
TBD.......................  Ischemic Vascular Disease                   0075  NCQA
                             (IVD): Complete Lipid Profile
                             and LDL Control < 100.
TBD.......................  Proportion of adults 18 years                N/A  CMS
                             and older who have had their
                             BP measured within the
                             preceding 2 years.
----------------------------------------------------------------------------------------------------------------


[[Page 42879]]


              Table 55--Proposed Measures Included in the Proposed 2012 Cataracts Measures Group *
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting system No.              Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
TBD.......................  Cataracts: Improvement in       N/A..............  AAO
                             Patient's Visual Function
                             within 90 Days Following
                             Cataract Surgery.
TBD.......................  Cataracts: Improvement in       N/A..............  AAO
                             Patient's Visual Function
                             within 90 Days Following
                             Cataract Surgery.
191.......................  Cataracts: 20/40 or Better      0565.............  AMA-PCPI/NCQA
                             Visual Acuity within 90 Days
                             Following Cataract Surgery.
192.......................  Cataracts: Complications        0564.............  AMA-PCPI/NCQA
                             within 30 Days Following
                             Cataract Surgery Requiring
                             Additional Surgical
                             Procedures.
----------------------------------------------------------------------------------------------------------------
* This measures group is reportable thought registry-based reporting only.

    As with measures group reporting in the 2008, 2009, 2010, and 2011 
Physician Quality Reporting System, we propose that each eligible 
professional electing to report a group of measures for 2012 must 
report all measures in the group that are applicable to each patient or 
encounter to which the measures group applies at least up to the 
minimum number of patients required by the applicable reporting 
criteria. We proposed that the measures proposed for the 2012 Back Pain 
Measures Group would continue to be reportable only as part of a 
measures group and not as individual measures for the 2012 Physician 
Quality Reporting System. Measures selected for inclusion in all other 
2012 Physician Quality Reporting System measures groups would be 
reportable either as individual measures or as part of a measures 
group.
    We note that the specifications for measures groups do not 
necessarily contain all the specification elements of each individual 
measure making up the measures group. This is based on the need for a 
common set of denominator specifications for all the measures making up 
a measures group in order to define the applicability of the measures 
group. Therefore, the specifications and instructions for measures 
groups would be provided separately from the specifications and 
instructions for the individual 2012 Physician Quality Reporting System 
measures. We will post the detailed specifications and specific 
instructions for reporting measures groups on the Physician Quality 
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/PQRS by no later than December 31, 2011.
    Additionally, the detailed measure specifications and instructions 
for submitting data on those 2012 measures groups that were also 
included as 2011 Physician Quality Reporting System measures groups may 
be updated or modified by the measure developer prior to 2012. 
Therefore, the 2012 Physician Quality Reporting System measure 
specifications for any given measures group could be different from 
specifications and submission instructions for the same measures group 
used for 2011. For example, the measure developer may change the codes 
contained in the measure's denominator. These measure specification 
changes do not materially impact the intended meaning of the measures 
or the strength of the measures. We invite public comment on our 
proposed retention of all 2011 Physician Quality Reporting System 
measures groups, as well as our newly proposed measures groups for the 
2012 Physician Quality Reporting System.
(5) Proposed 2012 Physician Quality Reporting System Quality Measures 
for Group Practices Selected To Participate in the GPRO (GPRO)
    For 2012, we propose that group practices selected to participate 
in the 2012 Physician Quality Reporting System GPRO would be required 
to report on 40 proposed measures listed in Table 55. Specifically, for 
the 2012 Physician Quality Reporting System, we propose to retain most 
of the measures available for reporting under the 2011 Physician 
Quality Reporting System GPRO because of our continued interest in the 
reporting of those measures as well as to maintain program consistency 
from year to year. However, for 2012, we propose to retire the 
following measures that were required under the 2010 and 2011 GPRO 
(that is, GPRO I for 2011):
     Diabetes Mellitus: Hemoglobin A1c Testing.
     Diabetes Mellitus: Lipid Profile.
     Hypertension (HTN): Blood Pressure Measurement.
    Furthermore, we propose to add the following Physician Quality core 
measures that were not available for reporting via the GPRO for the 
2011 Physician Quality Reporting System:
     Ischemic Vascular Disease (IVD): Use of Aspirin or another 
Antithrombotic.
     Measure pair: a. Tobacco Use Assessment, b. Tobacco 
Cessation Intervention.
     Ischemic Vascular Disease (IVD): Complete Lipid Profile 
and LDL Control < 100.
     Proportion of adults 18 years and older who have had their 
blood pressure measured within the preceding 2 years.
    In addition to adding the Physician Quality Reporting System core 
measures that were not available for reporting under the GPRO for the 
2011 Physician Quality Reporting System, we propose to add the 
following measures for reporting under the 2012 Physician Quality 
Reporting System GPRO:
     Chronic Obstructive Pulmonary Disease (COPD): 
Bronchodilator Therapy.
     Adult Weight Screening and Follow-up.
     Ischemic Vascular Disease (IVD): Blood Pressure Management 
Control.
     Chronic Obstructive Pulmonary Disease (COPD): Spirometry 
Evaluation.
     30 Day Post Discharge Physician Visit.
     Medication Reconciliation: Reconciliation After Discharge 
from an Inpatient Facility.
     Diabetes: Aspirin Use.
     Falls: Screening for Fall Risk.
     Osteoporosis: Management Following Fracture of Hip, Spine 
or Distal Radius for Men and Women Aged 50 Years and Older.
     Diabetes Mellitus: Tobacco Non Use.
     Coronary Artery Disease (CAD): LDL-level < 100 mg/dl.
     Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes 
Mellitus (less than 8 percent).
     Chronic Obstructive Pulmonary Disease (COPD): Smoking 
Cessation Counseling Received.
     Monthly International Normalized Ratio (INR) for 
Beneficiaries on Warfarin.
    We propose these new measures because they are NQF-endorsed 
measures that are consistent with other CMS quality reporting 
initiatives. We believe it is in the stakeholders' interest to align 
measures in different initiatives. As stated previously in section 
(e)(6) of this proposed rule, we propose that

[[Page 42880]]

group practices selected to participate in the Physician Quality 
Reporting System GPRO would be required to report on all measures 
listed in Table 56.

  Table 56--Proposed Measures for Physician Groups Participating in the 2012 Physician Quality Reporting System
                                     Group Practice Reporting Option (GPRO)
----------------------------------------------------------------------------------------------------------------
     Physician quality
   reporting  system No.             Measure title           NQF measure No.           Measure developer
----------------------------------------------------------------------------------------------------------------
1.........................  Diabetes Mellitus: Hemoglobin               0059  NCQA
                             A1c Poor Control in Diabetes
                             Mellitus (> 9%).
2.........................  Diabetes Mellitus: Low Density              0064  NCQA
                             Lipoprotein (LDL-C) Control
                             in Diabetes Mellitus.
3.........................  Diabetes Mellitus: High Blood               0061  NCQA
                             Pressure Control in Diabetes
                             Mellitus.
5.........................  Heart Failure: Angiotensin-                 0081  AMA-PCPI
                             Converting Enzyme (ACE)
                             Inhibitor or Angiotensin
                             Receptor Blocker (ARB)
                             Therapy for Left Ventricular
                             Systolic Dysfunction (LVSD).
6.........................  Coronary Artery Disease (CAD):              0067  AMA-PCPI
                             Oral Antiplatelet Therapy
                             Prescribed for Patients with
                             CAD.
7.........................  Coronary Artery Disease (CAD):              0070  AMA-PCPI
                             Beta-Blocker Therapy for CAD
                             Patients with Prior
                             Myocardial Infarction (MI).
8.........................  Heart Failure: Beta-Blocker                 0083  AMA-PCPI
                             Therapy for Left Ventricular
                             Systolic Dysfunction (LVSD).
110.......................  Preventive Care and Screening:              0041  AMA-PCPI
                             Influenza Immunization for
                             Patients >= 50 Years Old.
111.......................  Preventive Care and Screening:              0043  NCQA
                             Pneumonia Vaccination for
                             Patients 65 Years and Older.
112.......................  Preventive Care and Screening:              0031  NCQA
                             Screening Mammography.
113.......................  Preventive Care and Screening:              0034  NCQA
                             Colorectal Cancer Screening.
117.......................  Diabetes Mellitus: Dilated Eye              0055  NCQA
                             Exam in Diabetic Patient.
118.......................  Coronary Artery Disease (CAD):              0066  AMA-PCPI
                             Angiotensin-Converting Enzyme
                             (ACE) Inhibitor or
                             Angiotensin Receptor Blocker
                             (ARB) Therapy for Patients
                             with CAD and Diabetes and/or
                             Left Ventricular Systolic
                             Dysfunction (LVSD).
119.......................  Diabetes Mellitus: Urine                    0062  NCQA
                             Screening for Microalbumin or
                             Medical Attention for
                             Nephropathy in Diabetic
                             Patients.
163.......................  Diabetes Mellitus: Foot Exam..              0056  NCQA
228.......................  Heart Failure: Left             ................  CMS
                             Ventricular Function (LVF)
                             Testing.
198.......................  Heart Failure: Left                         0079  AMA-PCPI
                             Ventricular Function (LVF)
                             Assessment.
227.......................  Heart Failure: Weight                       0085  AMA-PCPI
                             Measurement.
199.......................  Heart Failure: Patient                      0082  AMA-PCPI
                             Education.
236.......................  Hypertension (HTN): Blood                   0018  NCQA
                             Pressure Control.
235.......................  Hypertension (HTN): Plan of                 0017  AMA-PCPI
                             Care.
201.......................  Ischemic Vascular Disease                   0073  NCQA
                             (IVD): Blood Pressure
                             Management Control.
51........................  Chronic Obstructive Pulmonary               0091  AMA-PCPI
                             Disease (COPD): Spirometry
                             Evaluation.
226.......................  Measure pair: a. Tobacco Use                0028  AMA-PCPI
                             Assessment, b. Tobacco
                             Cessation Intervention.
52........................  Chronic Obstructive Pulmonary               0102  AMA-PCPI
                             Disease (COPD):
                             Bronchodilator Therapy.
204.......................  Ischemic Vascular Disease                   0068  NCQA
                             (IVD): Use of Aspirin or
                             another Antithrombotic.
TBD.......................  Ischemic Vascular Disease                   0075  NCQA
                             (IVD): Complete Lipid Profile
                             and LDL Control < 100.
TBD.......................  Proportion of adults 18 years                N/A  CMS
                             and older who have had their
                             BP measured within the
                             preceding 2 years.
TBD.......................  30-Day Post Discharge                        N/A  CFMC
                             Physician Visit.
46........................  Medication Reconciliation:                  0097  AMA-PCPI/NCQA
                             Reconciliation After
                             Discharge from an Inpatient
                             Facility.
197.......................  Coronary Artery Disease (CAD):              0074  AMA-PCPI
                             Lipid Control.
200.......................  Heart Failure: Warfarin                     0084  AMA-PCPI
                             Therapy for Patients with
                             Atrial Fibrillation.
TBD.......................  Diabetes: Aspirin Use.........              0076  MN Community Measurement
TBD.......................  Falls: Screening for Fall Risk              0101  NCQA
40........................  Osteoporosis: Management                    0045  AMA-PCPI/NCQA
                             Following Fracture of Hip,
                             Spine or Distal Radius for
                             Men and Women Aged 50 Years
                             and Older.
128.......................  Adult Weigh Screening and                    421  CMS/QIP
                             Follow-up.
TBD.......................  Diabetes Mellitus: Tobacco Non-             0729  MN Community Management
                             Use.
TBD.......................  Coronary Artery Disease (CAD):               N/A  CMS
                             LDL-level < 100 mg/dl.
TBD.......................  Diabetes Mellitus: Hemoglobin                575  NCQA
                             A1c Poor Control in Diabetes
                             Mellitus (< 8%).
TBD.......................  Chronic Obstructive Pulmonary                N/A  CMS
                             Disease (COPD): Smoking
                             Cessation Counseling Received.
TBD.......................  Monthly INR for Beneficiaries                555  CMS
                             on Warfarin.
----------------------------------------------------------------------------------------------------------------

    We intend to provide a separate measures specifications document 
and other supporting documents for group practices participating in the 
2012 Physician Quality Reporting System GPRO. We anticipate that the 
group practice measures specifications document will be available by 
November 15, 2011 or shortly thereafter on the Physician Quality 
Reporting System section of the CMS Web site at http://www.cms.hhs.gov/PQRS. We invite public comment on the proposed 2012 Physician Quality 
Reporting System measures for group practices selected to participate 
in the 2012 Physician Quality Reporting System GPRO.
g. Maintenance of Certification Program Incentive
    Section 3002(c) of the Affordable Care Act amends section 
1848(k)(4) of the Act, as amended by section 3002(c) of

[[Page 42881]]

the Affordable Care Act, requires the Secretary to address a mechanism 
whereby an eligible professional may provide data on quality measures 
through a maintenance of certification program (Maintenance of 
Certification Program) operated by a specialty body of the American 
Board of Medical Specialties (ABMS). In addition, section 1848(m)(7) of 
the Act (``Additional Incentive Payment''), as added by section 
10327(a) of the Affordable Care Act, provides for an additional 0.5 
percent incentive payment for years 2011 through 2014 if certain 
requirements are met. In accordance with section 1848(m)(7)(B) of the 
Act governing the ``Additional Incentive Payment,'' in order to qualify 
for the additional incentive payment, an eligible professional must--
     Satisfactorily submit data on quality measures under the 
Physician Quality Reporting System for a year and have such data 
submitted--
    ++ On their behalf through a Maintenance of Certification Program 
that meets the criteria for a registry under the Physician Quality 
Reporting System; or
    ++ In an alternative form and manner determined appropriate by the 
Secretary; and
    ++ More frequently than is required to qualify for or maintain 
board certification status:
    ++ Participate in such a Maintenance of Certification Program for a 
year; and
    ++ Successfully complete a qualified Maintenance of Certification 
Program practice assessment for such year.
    Section 1848(m)(7)(C)(i) of the Act defines ``Maintenance of 
Certification Program'' as a continuous assessment program, such as a 
qualified ABMS Maintenance of Certification Program, or an equivalent 
program (as determined by the Secretary), that advances quality and the 
lifelong learning and self-assessment of board certified specialty 
physicians by focusing on the competencies of patient care, medical 
knowledge, practice-based learning, interpersonal and communications 
skills and professionalism. Such a program shall require a physician to 
do the following:
     Maintain a valid, unrestricted medical license in the 
United States.
     Participate in educational and self-assessment programs 
that require an assessment of what was learned.
     Demonstrate, through a formalized, secure examination, 
that the physician has the fundamental diagnostic skills, medical 
knowledge, and clinical judgment to provide quality care in their 
respective specialty.
     Successful completion of a qualified Maintenance of 
Certification Program practice assessment.
    As defined in section 1848(m)(7)(C)(ii) of the Act, a ``qualified 
Maintenance of Certification Program practice assessment'' means an 
assessment of a physician's practice that--
     Includes an initial assessment of an eligible 
professional's practice that is designed to demonstrate the physician's 
use of evidence-based medicine;
     Includes a survey of patient experience with care; and
     Requires a physician to implement a quality improvement 
intervention to address a practice weakness identified in the initial 
assessment and then to remeasure to assess performance after such 
intervention.
    To qualify for the additional incentive payment, section 
1848(m)(7)(B)(iii) of the Act also requires the Maintenance of 
Certification Program to submit to CMS, on behalf of the eligible 
professional, information:
     In a form and manner specified by the Secretary, that the 
eligible professional more frequently than is required to qualify for 
or maintain board certification status, participates in the Maintenance 
of Certification Program for a year and successfully completes a 
qualified Maintenance of Certification Program practice assessment for 
such year;
     Upon request by the Secretary, information on the survey 
of patient experience with care; and
     As the Secretary may require, on the methods, measures, 
and data used under the Maintenance of Certification Program and the 
qualified Maintenance of Certification Program practice assessment.
    In order to qualify for the additional 0.5 percent incentive 
payment in 2011, eligible professionals were required to participate 
more frequently in each of the following four parts of the Maintenance 
of Certification Program:
     Maintain a valid unrestricted license in the United 
States. For 2011, physicians simply needed to maintain a valid 
unrestricted license in the United States to meet the requirement for 
``more frequent'' participation with respect to this part (75 FR 73541 
through 73546).
     Participate in educational and self-assessment programs 
that require an assessment of what was learned.
     Demonstrate, through a formalized secure examination, that 
the physician has the fundamental diagnostic skills, medical knowledge, 
and clinical judgment to provide quality care in their respective 
specialty.
     Successfully complete a qualified maintenance of 
certification program practice assessment.
    We have received requests from the American Board of Medical 
Specialties, as well as various specialty organizations, to revise the 
criteria for satisfying the Maintenance of Certification Program 
additional incentive, because these entities believe that more frequent 
participation in all four parts of the Maintenance of Certification 
Program is too narrow. We have further considered the language under 
section 1848(m)(7)(B)(ii)(I) of the Act and we believe it can be 
interpreted more broadly. In particular, we note that the requirement 
that a professional ``more frequently than is required to qualify for 
or maintain board certification status participates in such a 
Maintenance of Certification Program'' could refer to the program as a 
whole, such that any element performed more frequently than is required 
satisfies the general requirement. The nature of the various components 
of a maintenance of certification program also suggest that it is not 
necessary that each of the four elements of the program be performed 
more frequently. We previously stated we believe that the ``more 
frequently'' requirement does not apply to the first part, which states 
that a physician maintain a valid unrestricted license, as there is no 
way a physician may maintain a valid unrestricted license ``more 
frequently.'' As such, we believe that the more frequently requirement 
could be satisfied based on any of the other elements of the program 
(that is, educational and self-assessment program; secure examination; 
or practice assessment). Specifically, we believe that if a 
professional more frequently than is required satisfies one or more of 
those parts of a program, the more frequently requirement would be met. 
Accordingly, we propose that in order to earn an additional 0.5 percent 
incentive for 2012 through 2014, an eligible professional must 
participate more frequently than is required in at least one of the 
following four parts of the Maintenance of Certification Program, as 
well as ``more frequent'' participation in the practice assessment 
component. With respect to how to assess whether a professional 
completes one of the elements of a program ``more frequently,'' we 
believe that this would be tied to the specific requirements of Board 
certification for the professional. Given that different specialties 
have different certification requirements (physician examination 
requirements to maintain Board certification varies widely depending on 
specialty), we do

[[Page 42882]]

not believe it is appropriate to impose a uniform requirement for all 
professionals and therefore, we believe that the board could determine 
for a particular program element the more frequent requirement for the 
professional. However, we believe that a minimum threshold would need 
to be met such that the professional would have to do something more 
frequently or more than what is ordinarily required for a particular 
part of the program, as well as ``more frequent'' participation in the 
practice assessment component.
    Accordingly, we propose for 2012, 2013, and 2014 the following for 
each year:
     An eligible professional wishing to be eligible for the 
additional Physician Quality Reporting System incentive payment of 0.5 
percent would be required to meet the proposed requirements for 
satisfactory Physician Quality Reporting System reporting, for the 
applicable program year (that is, to qualify for the additional 0.5 
percent incentive payment for 2012, meet the 2012 requirements for 
satisfactory reporting), based on the 12-month reporting period 
(January 1 through December 31 of the respective program year).
     For purposes of satisfactory reporting under the Physician 
Quality Reporting System, we propose that the eligible professional may 
participate as an individual eligible professional using either 
individual Physician Quality Reporting System measures or measures 
groups and submitting the Physician Quality Reporting System data via 
claims, a registry, or an EHR or participate under the GPRO option. As 
an alternative to this reporting option, we propose that eligible 
professionals may satisfactorily report under the Physician Quality 
Reporting System based on submission of Physician Quality Reporting 
System data by a Maintenance of Certification Program, provided that 
the Maintenance of Certification Program has qualified as a Physician 
Quality Reporting System registry for 2012. As indicated previously, an 
eligible professional would not necessarily have to qualify for the 
Physician Quality Reporting System through a Maintenance of 
Certification Program serving as a registry. Rather, we propose that an 
eligible professional may qualify for the additional incentive, without 
regard to the method by which the eligible professional has met the 
basic requirement of satisfactory reporting under the Physician Quality 
Reporting System.
     In addition to meeting the proposed requirements for 
satisfactory reporting for the Physician Quality Reporting System for a 
program year, the eligible professional must have data with respect to 
the eligible professional's participation in a Maintenance of 
Certification Program submitted on his or her behalf by a qualified 
medical specialty board or other entity sponsoring a Maintenance of 
Certification Program. For each eligible professional that wishes to 
qualify for the Maintenance of Certification Program Incentive, the 
qualified medical specialty board or other entity sponsoring a 
Maintenance of Certification Program must submit data to CMS with 
respect to the following:
     An eligible professional must, more frequently than is 
required to qualify for or maintain board certification, participate in 
a Maintenance of Certification Program for a year and successfully 
complete a qualified Maintenance of Certification Program practice 
assessment for such year. With regard to the ``more frequently'' 
requirement as it applies to the elements of a Maintenance of 
Certification Program itself (other than completing a qualified 
Maintenance of Certification Program practice assessment), we propose 
to require that the Maintenance of Certification Program certify that 
the eligible professional has ``more frequently'' than is required to 
qualify for or maintain board certification ``participated in a 
Maintenance of Certification Program for a year.'' We do not propose to 
specify with respect to participation how a physician must meet the 
more frequently requirement, but rather that the Maintenance of 
Certification Program determine what a physician must do to more 
frequently participate in a Maintenance of Certification Program and so 
certify that the eligible professional has met this requirement. While 
we do not believe that the ``more frequently'' requirement is 
applicable to the licensure requirement, given that one cannot be 
licensed ``more frequently'' than is required, we propose to leave it 
up to the Maintenance of Certification Program to determine which 
element(s) of a Maintenance of Certification Program must be completed 
more frequently. We believe that making this change will reduce burden 
on physicians and will increase participation while being consistent 
with the requirement to ``more frequently'' participate in a 
Maintenance of Certification Program.
     With respect to the Maintenance of Certification Program 
practice assessment, which is specifically delineated in section 
1848(m)(7)(B)(ii) of the Act as being required more often than is 
necessary to qualify for or maintain board certification, we believe we 
need to be more specific regarding our interpretation of the phrase 
``more frequently.'' Additionally, we are aware that some specialty 
boards have varying Maintenance of Certification Program requirements 
for physicians to maintain board certification, based on the date of 
original certification. Some, we believe, may not be required to 
participate in a Maintenance of Certification Program at all in order 
to maintain board certification. Accordingly, we recognize that ``more 
often'' may vary among physicians certified by the same specialty 
board. We interpret the statutory provisions as requiring participation 
in and successful completion of at least one Maintenance of 
Certification Program practice assessment per year. Therefore, we 
propose, as a basic requirement, participation in and successful 
completion in at least one Maintenance of Certification Program 
practice assessment for each year the physician participates in the 
Maintenance of Certification Program Incentive, regardless of whether 
or how often the physician is required to participate in a Maintenance 
of Certification Program to maintain board certification.
    We are also aware that ABMS boards are at various stages in 
implementing the practice assessment modules, and some may not have 
such assessment modules in place. However, inasmuch as we interpret the 
statute to require a Maintenance of Certification Program practice 
assessment at least once per program year as part of the Maintenance of 
Certification Program, eligible professionals who do not have 
available, through their boards or otherwise, a Maintenance of 
Certification Program practice assessment are not eligible for the 0.5 
percent incentive.
    We believe that the experience of care survey provides particularly 
valuable information and proposed that a qualified Maintenance of 
Certification Program practice assessment must include a survey of 
patient experience with care. The Secretary may request information on 
the survey of patient experience with care, under section 
1848(m)(7)(B)(iii) of the Act. In view of the importance of this 
information, and the lack of readily available alternative sources, we 
propose to require that Maintenance of Certification Programs submit 
information about the patient experience with care survey(s) used by 
physicians to fulfill the Maintenance of Certification Program practice 
assessment. We are not, at this time, requesting the results of the 
survey for the eligible professionals for whom

[[Page 42883]]

information is being submitted by the Maintenance of Certification 
Program. We may, however, request such information for appropriate 
validation purposes and may propose to request such data for future 
years of the Maintenance of Certification Program Incentive.
    Some Maintenance of Certification Programs underwent a self-
nomination process in 2011 to enable their members to be eligible for 
this Physician Quality Reporting System Maintenance of Certification 
Program Incentive for 2011 Physician Quality Reporting System. We 
propose that a Maintenance of Certification Program that was approved 
after undergoing the self-nomination process in 2011 must submit a self 
nomination statement for each year the Maintenance of Certification 
Program intends to participate in the Physician Quality Reporting 
System Maintenance of Certification Program. In the self-nomination 
statement, we propose that the previously approved program must provide 
us with updates to its program in its self-nomination statement. We 
propose that this self-nomination statement be submitted to CMS via a 
web-based tool.
    For Maintenance of Certification Programs new for 2012, we propose 
that Maintenance of Certification Programs wishing to enable their 
diplomates to be eligible for an additional Physician Quality Reporting 
System incentive payment for the 2012 Physician Quality Reporting 
System will need to go through a self-nomination process by January 31, 
2012. We proposed the board would need to include all of the following 
information in their self-nomination statement to us:
     Provide detailed information regarding the Maintenance of 
Certification Program with reference to the statutory requirements for 
such program.
     Indicate the organization sponsoring the Maintenance of 
Certification Program, and whether the Maintenance of Certification 
Program is sponsored by an ABMS board. If not an ABMS board, indicate 
whether and how the program is substantially equivalent to the ABMS 
Maintenance of Certification Program process.
     Indicate that the program is in existence as of January 1, 
2012.
     Indicate that the program has at least 1 active 
participant.
     The frequency of a cycle of Maintenance of Certification 
Program for the specific Maintenance of Certification Program of the 
sponsoring organization; including what constitutes ``more frequently'' 
for the Maintenance of Certification Program itself and for the 
practice assessment for the specific Maintenance of Certification 
Program of the sponsoring organization.
     Confirmation from the board that the practice assessment 
will occur and be completed in the year the physician is participating 
in the Maintenance of Certification Program Incentive.
     What was, is, or will be the first year of availability of 
the Maintenance of Certification Program practice assessment for 
completion by an eligible professional.
     What data is collected under the patient experience of 
care survey and how this information would be provided to CMS.
     How the Maintenance of Certification Program monitors that 
an eligible professional has implemented a quality improvement process 
for their practice.
     Describe the methods, and data used under the Maintenance 
of Certification Program, and provide a list of all measures used in 
the Maintenance of Certification Program for 2011 and to be used for 
2012, including the title and descriptions of each measure, the owner 
of the measure, whether the measure is NQF endorsed, and a link to a 
Web site containing the detailed specifications of the measures, or an 
electronic file containing the detailed specifications of the measures.
    We propose that sponsoring organizations who desire to participate 
as a Maintenance of Certification Program would need to be able to 
provide CMS the following information in a CMS-specified file format by 
no later than the end of the first quarter of 2012:
     The name, NPI and applicable TIN(s) of the eligible 
professional who would like to participate in this process.
     Attestation from the board that the information provided 
to CMS is accurate and complete.
     The board has signed documentation from the eligible 
professional that the eligible professional wishes to have the 
information released to us.
     Information from the patient experience of care survey.
     Information certifying that the eligible professional has 
participated in a Maintenance of Certification Program for a year, more 
frequently than is required to qualify for or maintain board 
certification status, including the year that the physician met the 
board certification requirements for the Maintenance of Certification 
Program, and the year the eligible professional participated in a 
Maintenance of Certification Program ``more frequently'' than is 
required to maintain or qualify for board certification.
     Information certifying that the eligible professional has 
completed the Maintenance of Certification Program practice assessment 
at least one time each year the eligible professional participates in 
the Maintenance of Certification Program Incentive.
    We propose that specialty boards that also desire to send Physician 
Quality Reporting System information to us on behalf of eligible 
professionals should be able to meet the proposed requirements for 
registry data submission and should follow the directions for self-
nomination to become a qualified registry. Boards may also participate 
as registries for Physician Quality Reporting System data provided that 
they meet the registry requirements. As an alternative to requiring 
boards to either operate a qualified Physician Quality Reporting System 
registry or to self-nominate to submit Maintenance of Certification 
Program data to us on behalf of their members, we propose to continue 
to allow the various boards to submit the Maintenance of Certification 
Program data to the ABMS and having ABMS submit the information on 
behalf of the various boards and their member eligible professionals to 
CMS.
    To the extent an eligible professional participates in multiple 
Maintenance of Certification Programs and meets the requirements under 
section 1848(m)(7) of the Act (Additional Incentive Payment) under 
multiple programs, we note that the eligible professional can qualify 
for only one additional 0.5 percent incentive per year. We invite 
public comment on our proposals for the Physician Quality Maintenance 
of Certification Program Incentive for 2012 through 2014.
h. Feedback Reports
    Section 1848(m)(5)(H) of the Act requires the Secretary to provide 
timely feedback to eligible professionals on the performance of the 
eligible professional with respect to satisfactorily submitting data on 
quality measures. Since the inception of the program in 2007, the 
Physician Quality Reporting System has provided eligible professionals 
who have reported Physician Quality Reporting System data on quality 
measures feedback reports at the TIN/NPI level detailing participation 
in the Physician Quality Reporting System, including reporting rate and 
performance rate information. For 2008, we improved the format and 
content of feedback reports based on stakeholder input. We also 
developed an alternate report distribution method whereby each eligible 
professional can directly

[[Page 42884]]

request and receive a feedback report. In accordance with Section 
1848(m)(5)(H) of the Act, we will continue to provide feedback reports 
to individuals and group practices that attempt to report on at least 
one Physician Quality Reporting System quality measure. We propose to 
provide feedback reports for 2012 and beyond on or about the time of 
issuance of the incentive payments, consistent with our current 
practice.
    We believe it will be beneficial for eligible professionals to also 
receive interim feedback reports. In the 2011 MPFS Final Rule with 
comment period, we stated that we intended to provide interim feedback 
reports to eligible professionals in 2012 (75 FR 73549). Therefore, we 
propose to provide interim feedback reports for eligible professionals 
reporting individual measures and measures groups through the claims-
based reporting mechanism for 2012 and beyond. These reports would be a 
simplified version of annual feedback reports that we currently provide 
for such eligible professionals and would be based on claims for dates 
of service occurring on or after January 1 and processed by March 31 of 
the respective program year (that is, January 1, 2012 and processed by 
March 31, 2012 for the 2012 program year). We expect that we would be 
able to make these interim feedback reports available to eligible 
professionals in the summer of the respective program year (that is 
summer 2012 for the 2012 program year). We believe interim feedback 
reports would be particularly valuable to eligible professionals 
reporting measures groups, because it would let an eligible 
professional know how many more cases he or she needs to report to 
satisfy the criteria for satisfactory reporting for claims-based 
reporting of measures groups. We invite public comment on our proposal 
to continue to provide annual feedback reports as well as our intention 
to provide interim feedback reports.
i. Informal Review
    Under 42 CFR 414.90(i), eligible professionals or group practices 
may seek an informal review of the determination that the eligible 
professional or group practice did not satisfactorily submit data on 
quality measures under the Physician Quality Reporting System.
    To maintain program consistency until we have further experience 
with the informal review process that we implemented for the 2011 
Physician Quality Reporting System, we propose to largely retain the 
same informal review process that was finalized in the 2011 MPFS final 
rule with comment period (75 FR 73549 through 73551) for 2012 and 
beyond. Specifically, we propose to base the informal process on our 
current inquiry process whereby an eligible professional can contact 
the Quality Net Help Desk (via phone or e-mail) for general Physician 
Quality Reporting System and eRx Incentive Program information, 
information on Physician Quality Reporting System feedback report 
availability and access, and/or information on Physician Quality 
Reporting System Portal password issues. For purposes of the informal 
process required under section 1848(m)(5)(E) of the Act, we propose the 
following inquiry process:
     An eligible professional electing to utilize the informal 
process must request an informal review within 90 days of the release 
of his or her feedback report, irrespective of when an eligible 
professional actually accesses his/her feedback report.
     An eligible professional may request an informal review 
through use of a web-based tool, if technically feasible. We believe 
use of the web-based tool will provide a more efficient way to record 
informal review requests, as web-based tool will guide the eligible 
professional through the creation of an informal review requests. For 
example, the web-based tool will prompt an eligible professional of any 
necessary information s/he must provide. If not technically feasible, 
we propose that an eligible professional may request the informal 
review by notifying the Quality Net Help Desk via e-mail at 
[email protected]. The e-mail requesting the initiation of the 
informal review process should summarize the concern(s) of the eligible 
professional and the reason(s) for requesting an informal review.
     We further propose that CMS will provide the eligible 
professional with a response to his or her request for an informal 
review within 90 days of receiving the original request. In 2011, we 
proposed to provide the eligible professional with a response to his or 
her request for an informal review within 60 days of receiving the 
original request. However, we anticipate that the volume of informal 
review requests will grow as participation in the Physician Quality 
Reporting System grows, particularly as we move towards the 
implementation of the 2015 payment adjustment. Furthermore, we believe 
that the time it takes for CMS to calculate data on Physician Quality 
Reporting System quality measures will be greater than in 2011, since 
we are proposing additional individual measures and measures groups. 
For these reasons, we are proposing to amend 42 CFR 414.90(i)(2) to 
indicate that CMS will provide a written response within 90 days of the 
receipt of the original request for an informal review.
     As this process is informal and the statute does not 
require a formal appeals process, we will not include a hearing or 
evidence submission process, although the eligible professional may 
submit information to assist in the review.
     Based on our informal review, we will provide a written 
response. Where we find that the eligible professional did 
satisfactorily report, we propose to provide the applicable incentive 
payment.
     Given that this is an informal review process and given 
the limitations on review under section 1848(m)(5)(E) of the Act, 
decisions based on the informal review will be final, and there will be 
no further review or appeal.
    We invite public comment on our proposal for the Physician Quality 
Reporting System informal review process.
j. Future Payment Adjustments for the Physician Quality Reporting 
System
    Beginning in 2015, a payment adjustment will apply under the 
Physician Quality Reporting System. Specifically, under section 
1848(a)(8) of the Act, as added by section 3002(b) of the Affordable 
Care Act, with respect to covered professional services furnished by an 
eligible professional during 2015 or any subsequent year, if the 
eligible professional does not satisfactorily submit data on quality 
measures for covered professional services for the quality reporting 
period for the year, the fee schedule amount for services furnished by 
such professionals during the year shall be equal to the applicable 
percent of the fee schedule amount that would otherwise apply to such 
services. The applicable percent is--
     98.5 percent for 2015; and
     98.0 percent for 2016 and each subsequent year.
    Section 1848(8)(A)(i) of the Act provides that, for purposes of the 
payment adjustment, the ``quality reporting period'' with the respect 
to a year, is a period specified by the Secretary. In order to maintain 
consistency and program continuity, similar to the 12-month reporting 
period we are proposing for 2012, we are also proposing a 12-month 
reporting period for the 2015 payment adjustment. Specifically, we 
propose that the reporting period for purposes of the 2015 payment 
adjustment to be the 2013 calendar year, that is, January 1, 2013 
through December 31, 2013. We believe

[[Page 42885]]

that this proposed reporting period will allow a full calendar year for 
eligible professionals to meet the criteria for satisfactory reporting 
for purposes of the 2015 payment adjustment (that will be proposed in 
future rulemaking) while still providing us with enough time to collect 
and analyze the data submitted by eligible professionals for the 2015 
payment adjustment without having to make retroactive payment 
adjustments in 2015. If we determine that an eligible professional or 
group practice has not satisfactorily reported data on quality measures 
for the January 1, 2013 through December 31, 2013 reporting period for 
purposes of the 2015 payment adjustment, then the eligible professional 
or group practice would be subject to the 1.5 percent adjustment in 
their fee schedule amount in 2015. We invite public comment on the 
proposed reporting period for purposes of the 2015 Physician Quality 
Reporting System payment adjustment.
    We intend to address the remaining requirements for satisfactory 
reporting for purposes of the 2015 payment adjustment in future 
rulemaking. We welcome suggestions for what the criteria for 
satisfactory reporting for purposes of the 2015 payment adjustment we 
might consider in the future with regard to the proposed reporting 
period described previously.
2. Incentives and Payment Adjustments for Electronic Prescribing 
(eRx)--The Electronic Prescribing Incentive Program
a. Program Background and Statutory Authority
    Electronic prescribing is the transmission using electronic media, 
of prescription or prescription-related information between the 
prescriber, dispenser, pharmacy benefit manager (PBM), or health plan, 
either directly or through an intermediary, including an electronic 
prescribing network. To encourage the use of electronic prescribing 
among eligible professionals, section 132 of the Medicare Improvements 
for Patients and Providers Act of 2008 (MIPPA) amended section 1848(m) 
of the Act to establish the eRx Incentive Program. The eRx Incentive 
Program provides a combination of incentive payments and payment 
adjustments through 2014 to eligible professionals who are successful 
electronic prescribers. No eRx incentive payments or payment 
adjustments are authorized beyond 2014.
    From 2009 through 2013, the Secretary is authorized to provide 
eligible professionals who are successful electronic prescribers an 
incentive payment equal to a percentage of the eligible professional's 
total estimated Medicare Part B PFS allowed charges (based on claims 
submitted not later than 2 months after the end of the reporting 
period) for all covered professional services furnished by the eligible 
professional during the respective reporting period. However, section 
1848(m)(2)(D) of the Act, as added by section 4101(f)(2)(B) of Title IV 
of Division B of the American Recovery and Reinvestment Act of 2009 
(Pub. L. 111-5) (ARRA), which also authorized the Medicare EHR 
Incentive Program, specifies that the eRx incentive does not apply to 
an eligible professional, if, for the EHR reporting period, the 
eligible professional earns an incentive payment under the Medicare EHR 
Incentive Program beginning in 2011.
    The applicable electronic prescribing percent for incentive 
payments under the eRx Incentive Program are as follows:
     2.0 percent for 2009.
     2.0 percent for 2010.
     1.0 percent for 2011.
     1.0 percent for 2012.
     0.5 percent for 2013.
    In addition, for years 2012 through 2014, under section 
1848(a)(5)(A) of the Act, a PFS payment adjustment applies to eligible 
professionals who are not successful electronic prescribers at an 
increasing rate through 2014. Specifically, if the eligible 
professional is not a successful electronic prescriber for the 
respective reporting period for the year, the PFS amount for covered 
professional services during the year shall be a percentage less than 
the PFS amount that would otherwise apply. The applicable electronic 
prescribing percent for payment adjustments under the eRx Incentive 
Program are as follows:
     1.0 percent in 2012.
     1.5 percent in 2013.
     2.0 percent in 2014.
    We believe the purpose of the eRx Incentive Program for 2012 and 
beyond is to continue to encourage significant expansion of the use of 
electronic prescribing by authorizing a combination of financial 
incentives and payment adjustments. We are proposing to modify the 
incentive and payment adjustment language in 42 CFR 414.92 to provide 
language more consistent with section 1848(k) of the Act.
    We believe that the criteria used to determine who is a successful 
electronic prescriber for purposes of the eRx incentive are not 
required to be identical to the criteria used to determine the 
applicability of the eRx payment adjustment. In general, we believe 
that an incentive should be broadly available to encourage the widest 
possible adoption of electronic prescribing, even for low volume 
prescribers. On the other hand, we believe that a payment adjustment 
should be applied primarily to assure that those who have a large 
volume of prescribing do so electronically, without penalizing those 
for whom the adoption and use of an electronic prescribing system may 
be impractical given the low volume of prescribing. We also believe 
that eligible professionals who have met the requirements for receiving 
an incentive payment under the eRx Incentive Program for a particular 
year have sufficiently demonstrated their adoption and use of 
electronic prescribing technology and thus should not be subject to the 
payment adjustment in a future year.
    Individual eligible professionals do not have to participate in the 
Physician Quality Reporting System in order to participate in the eRx 
Incentive Program (and vice versa). The provisions of the eRx Incentive 
Program are codified at 42 CFR 414.92.
    In prior years, we have proposed and finalized the details of the 
eRx Incentive Program for each program year through an annual 
rulemaking process. Through this annual rulemaking process, we have 
previously established the criteria for avoiding the 2012 eRx payment 
adjustment in the 2011 PFS Final Rule with comment period (75 FR 73562 
through 73565) as well as issued a proposed rule entitled ``Proposed 
Changes to the Electronic Prescribing (eRx) Incentive Program'' (76 FR 
31547), in which we proposed additional changes to the 2012 payment 
adjustment, as well as the electronic prescribing quality measure for 
certain reporting periods in 2011. We also established requirements for 
the 2013 eRx payment adjustment in the 2011 PFS Final Rule with comment 
period (75 FR 7356).
    In this rule, we are setting forth our comprehensive proposals for 
the 2012 and 2013 incentive payments, additional requirements for the 
2013 payment adjustment, and 2014 payment adjustment. We believe that 
proposing criteria for the eRx Incentive Program for 2012 and beyond 
will provide eligible professionals with more time to familiarize 
themselves with the details of the eRx Incentive Program. We hope this 
will lead to increased, successful participation in the eRx Incentive 
Program. Details regarding our proposals for the eRx Incentive Program 
for 2012 and 2013 incentive payments, additional requirements for the 
2013 payment adjustment, and the 2014

[[Page 42886]]

payment adjustment, including our rationale for such proposals, are 
described in the following section.
b. Eligibility
    For the 2012 and 2013 incentive payments and 2013 and 2014 payment 
adjustments, we propose the following two ways eligible professionals 
may participate in the eRx Incentive Program: (1) As an individual 
eligible professional; or (2) as part of a group practice reporting 
option (GPRO) for the eRx Incentive Program (eRx GPRO). Eligible 
professionals eligible to participate in the eRx Incentive Program are 
defined at 42 CFR 414.92(b). For more information on which 
professionals are eligible to participate in the eRx Incentive Program, 
we refer readers to the Eligible Professionals page of the eRx 
Incentive Program section of the CMS Web site at: http://www.cms.gov/ERxIncentive/05_Eligible%20Professionals.asp#TopOfPage.
(1) Individual Eligible Professionals
(A) Definition of Eligible Professional
    As in the 2011 eRx Incentive Program, we propose that, for 
individual eligible professionals participating in the eRx Incentive 
Program for purposes of the 2012 and 2013 incentive payments and 2013 
and 2014 payment adjustments, the determination of whether an eligible 
professional is a successful electronic prescriber will be made at the 
individual professional level, based on the National Provider 
Identifier (NPI) number. Inasmuch as some individuals (identified by 
NPIs) may be associated with more than one practice or Tax 
Identification Number (TIN), for the 2012 and 2013 incentive payments 
and 2013 and 2014 payment adjustments, we propose that the 
determination of whether an eligible professional is a successful 
electronic prescriber will continue to be made for each unique TIN/NPI 
combination. Then, as in previous years, incentive payments would be 
made to the applicable holder of the TIN. We propose continuing to use 
the TIN/NPI combination as the unit of analysis to maintain program 
continuity, as individual eligible professionals are already familiar 
with this level of analysis and payment. We invite public comment on 
our proposal to continue analyzing data using the TIN/NPI combination 
while providing payment to the applicable holder of the TIN.
    As in prior program years, we propose that individual eligible 
professionals who wish to participate in the eRx Incentive Program for 
purposes of the 2012 and 2013 incentive payments and 2013 and 2014 
payment adjustments may simply start participating. Individual eligible 
professionals are not required to register or notify CMS they intend to 
participate; rather, they may simply begin to report the eRx measure. 
We invite public comment on the proposed process for individual 
eligible professionals to participate in the eRx Incentive Program.
(2) Group Practices
    As required under section 1848(m)(3)(C) of the Act, we established 
a process under which eligible professionals in a group practice (as 
defined by the Secretary) would be treated as meeting the requirements 
for submitting data on electronic prescribing quality measures for 
covered professional services for a reporting period (or, for purposes 
of the payment adjustment under section 1848(a)(5) of the Act, for a 
reporting period for a year) if, in lieu of reporting the electronic 
prescribing measure, the group practice reports measures determined 
appropriate by the Secretary, such as measures that target high-cost 
chronic conditions and preventive care, in a form and manner, and at a 
time specified by the Secretary. Specifically, we first established the 
eRx GPRO in 2010, which was further modified in the 2011 PFS Final Rule 
(75 FR 73502). The eRx GPRO was further modified in 2011. In addition 
to determining whether an eligible professional is a successful 
electronic prescriber for incentive payment and payment adjustment 
purposes based on separately analyzing whether the individual eligible 
professionals are successful electronic prescribers, we propose to also 
make the determination that the group practice, as a whole, is a 
successful electronic prescriber in accordance with section 
1848(m)(3)(C) of the Act for those group practices that wish to 
participate in the eRx GPRO.
(A) Proposed Definition of ``Group Practice''
    Section 1848(m)(3)(C)(i) of the Act authorizes the Secretary to 
define ``group practice,'' which CMS defined by referencing our 
regulation at Sec.  414.92(b). For the 2011 eRx Incentive Program, a 
group practice is--
    (1) Defined at Sec.  414.90(b), that is participating in the 
Physician Quality Reporting System; or
    (2)(a) In a Medicare approved demonstration project that is deemed 
to be participating in the Physician Quality Reporting System group 
practice reporting option; and
    (b) Has indicated its desire to participate in the electronic 
prescribing group practice option.
    However, for purposes of determining whether an eRx GPRO is a 
successful electronic prescriber for CYs 2012 through 2014, we propose 
to modify the definition of the ``group practice'' at 42 CFR 414.92(b) 
to be consistent with modifications being proposed to the definition of 
``group practice'' at 42 CFR 414.90(b) for the 2012 Physician Quality 
Reporting System.
    Specifically, we propose to modify the language that references 
Medicare demonstrations to more broadly recognize other similar 
Medicare programs that group practices may be participating in so that 
such practices may be eligible to participate in the eRx Incentive 
Program. In addition, we are making clear that all group practices must 
indicate their desire to participate in the eRx group practice option. 
Also, as we noted above, we are proposing to modify the definition of 
group practice under the Physician Quality Reporting System definition 
at 42 CFR 414.90(b) by defining a group practice as a single TIN with 
at least 25 or more eligible professionals, as identified by their 
individual NPI, who have reassigned their Medicare billing rights to 
the TIN. Given that the definition of ``group practice'' at 42 CFR 
414.92(b) follows the Physician Quality Reporting System definition, if 
the proposed changes to 414.90(b) are finalized, it would apply to the 
definition for group practice under the eRx Incentive Program.
    Although this proposal would eliminate group practices comprised of 
2 to 24 eligible professionals for the purpose of the eRx Incentive 
Program, we believe this proposal to change the definition of ``group 
practice'' would not be a significant burden to these small group 
practices as they may still participate as individual eligible 
professionals. For 2010, out of 107 group practices that self-nominated 
to participate in GPRO II for the Physician Quality Reporting System, 
68 of these group practices qualified to participate in the eRx 
Incentive Program under GPRO II. However, during the opt-out period 
which ended on May 12, 2011, 6 of these 68 group practices dropped out 
of GPRO II participation, leaving only 62 group practices to 
participate in GPRO II for 2010. Due to the low participation of only 
62 groups, we believe participation in the eRx Incentive GPRO should be 
limited to only those group practices with 25 or more eligible 
professionals. Indeed, we believe participating under GPRO II may be 
more burdensome for very small group practices than participating as

[[Page 42887]]

eligible professionals. For example, with respect to the payment 
adjustment, additional limitations may apply to eligible professionals 
as individuals that are not applied to group practices, which presents 
an additional burden to the group practice.
(B) Proposed Process to Participate in the eRx Incentive Program--eRx 
GPRO
    We propose that if a group practice wishes to participate in the 
eRx Incentive Program under the eRx GPRO, the group practice must self-
nominate to do so. To self-nominate, we propose that the group practice 
follow the requirements for self-nomination under the Physician Quality 
Reporting System as well as specifically indicate its intent to 
participate in the eRx Incentive Program as a group practice. A group 
practice must self-nominate for each calendar year the group wishes to 
participate in the eRx GPRO. If a group practice self-nominates to 
participate in the eRx GPRO for a calendar year, then we propose to 
consider that the group practice is participating in the eRx GPRO for 
purposes of both the incentive payment (with respect to any incentive 
payment reporting period that occurs during the calendar year) and the 
payment adjustment (with respect to any payment adjustment reporting 
period that occurs during any calendar year). For example, the 2013 
payment adjustment reporting period occurs during calendar year 2012 
(January 1, 2012 through June 30, 2012). Therefore, any group practice 
participating in the eRx GPRO during calendar year 2012 would be 
considered to be participating in the eRx GPRO for both the 2012 
incentive and 2013 payment adjustment. Please note that a group 
practice that is deemed to be participating in the Physician Quality 
Reporting System, such as an ACO participating under the Medicare 
Shared Savings Program, will not be deemed participating as a group 
practice in the eRx Incentive Program. Therefore, the group practice 
must self-nominate to participate in the eRx Incentive Program under 
the eRx GPRO. Instructions for submitting the self-nomination statement 
are the same as the instructions for submitting a self-nomination 
statement for the Physician Quality Reporting System. Each year, we 
expect to notify a group practice of the selection decision with 
respect to participation in the eRx GPRO during the first quarter of 
the year. We invite public comment on the requirements for eligible 
professionals to participate as an eRx GPRO for purposes of the eRx 
Incentive Program.
c. Proposed Reporting Periods
    Section 1848(m)(6)(C)(ii) of the Act also authorizes the Secretary 
to revise the reporting period if the Secretary determines such 
revision is appropriate, produces valid results on measures reported, 
and are consistent with the goals of maximizing scientific validity and 
reducing administrative burden.
(1) Proposed Reporting Periods for the 2012 and 2013 eRx Incentives
    Section 1848(m)(6)(C)(i)(II) of the Act defines ``reporting 
period'' under the eRx Incentive Program for years after 2008 to be the 
entire year. We also have authority under section 1848(m)(6)(C)(ii) of 
the Act to revise the reporting period. We propose, however, entire 
calendar year reporting periods for the reporting period for purposes 
of the 2012 and 2013 incentive payment (January 1, 2012 through 
December 31, 2012 for the 2012 incentive and January 1, 2013 through 
December 31, 2013 for the 2013 incentive, respectively). Accordingly, 
we propose to modify 42 CFR 414.92(d)(1).
(2) Proposed Reporting Periods for the 2013 and 2014 eRx Payment 
Adjustments
    As we indicated, using our authority under Section 
1848(m)(6)(C)(ii) of the Act, in the 2011 PFS Final Rule with comment 
period, we finalized two different reporting periods: A 6-month 
reporting period (between January 1, 2011 and June 30, 2011) for 
purposes of the 2012 payment adjustment for both individual eligible 
professionals and group practices participating in the eRx GPRO (75 FR 
73562 through 73563) and a 12-month reporting period (between January 
1, 2011 and December 31, 2011) for purposes of the 2013 payment 
adjustment for individual eligible professionals and group practices 
participating in the eRx GPRO (75 FR 73565).
    In addition to the 12-month reporting period finalized in the 2011 
PFS Final Rule with comment period, we propose an additional 6-month 
reporting period for purposes of the 2013 payment adjustment. As stated 
in the CY 2011 PFS final rule with comment period (75 FR 73565), we 
indicated that we might consider in future rulemaking additional 
reporting periods for purposes of the 2013 payment adjustment to 
maximize the opportunities for eligible professionals to become 
successful electronic prescribers.
    As such, we propose for both individual eligible professionals and 
group practices participating in the eRx GPRO a 6-month reporting 
period (between January 1, 2012 and June 30, 2012) for purposes of the 
2013 payment adjustment.
    For similar reasons, we propose a 12-month reporting period 
(between January 1, 2012 and December 31, 2012) that would apply to 
individual eligible professionals and a 6-month reporting period 
(between January 1, 2013 and June 30, 2013) that would apply to both 
individual eligible professionals and group practices with regard to 
the 2014 payment adjustment.. (Please note that we are not proposing 
the 12-month reporting period for group practices for purposes of the 
2014 payment adjustment because it is the same proposed reporting 
period for the 2013 incentive.) Providing two different reporting 
periods will provide eligible professionals with two opportunities to 
become successful electronic prescribers. We invite public comment on 
the proposed reporting periods for the 2013 and 2014 payment 
adjustments.
d. Proposed Criterion for Determining Successful Electronic Prescribers
    Section 1848(m)(3)(B) of the Act governs the requirements for 
``successful electronic prescriber,'' for purposes of the incentive 
payment under section 1848(m)(2) of the Act and the payment adjustment 
under section 1848(a)(5) of the Act. The Secretary is authorized to use 
one of two possible criteria for determining whether an eligible 
professional is a successful electronic prescriber. One criterion, 
under section 1848(m)(3)(B)(ii) of the Act, is based on the eligible 
professional's reporting, in at least 50 percent of the reportable 
cases, on any electronic prescribing measures that have been 
established under the Physician Quality Reporting System, and are 
applicable to services furnished by the eligible professional for the 
reporting period. However, for years after 2009, section 1848(m)(3)(D) 
of the Act permits the Secretary in consultation with stakeholders and 
experts to revise the criteria for submitting data on electronic 
prescribing measures under section 1848(m)(3)(B)(ii) of the Act.
    The second criterion, under section 1848(m)(3)(B)(iii) of the Act, 
is based on the electronic submission by the eligible professional of a 
sufficient number (as determined by the Secretary) of prescriptions 
under Part D during the reporting period. If the Secretary decides to 
use this standard, then, in accordance with section 1848(m)(3)(B)(iv) 
of the Act, the Secretary is authorized to use Part D

[[Page 42888]]

drug claims data to assess whether a sufficient number of prescriptions 
have been submitted by eligible professionals. However, under section 
1848(m)(3)(B)(i) of the Act, if the standard based on a sufficient 
number (as determined by the Secretary) of electronic Part D 
prescriptions is applied for a particular reporting period, then the 
standard specified in law, based on the reporting on electronic 
prescribing measures would no longer apply.
    We considered use of the second criterion for determining 
successful prescribing under the eRx Incentive Program. While we 
recognize the benefits of using Part D data as the standard for 
determining successful electronic prescribers, we believe use of Part D 
prescriptions for analysis may be premature. For example, as the use of 
Part D data is fairly new, there is uncertainty as to the accuracies of 
reporting electronic prescribing activities. For example, if an 
electronic prescription is converted to a facsimile when reaching the 
pharmacy, under reporting of Part D data, the transmission is still 
reported as a pure, electronic prescribing event. Furthermore, use of 
Part D data would require a complete overhaul of the current 
requirements for the eRx Incentive Program. For instance, if we choose 
to shift to the use of Part D data, the program would have to adopt a 
new form of measurement, a new form of analysis other than use of an 
eligible professionals' TIN/NPI (as no TIN is populated under Part D 
data), and new criteria for eligible professionals and eRx GPROs to 
become successful electronic prescribers. Therefore, we are not 
proposing to use the second criterion.
    For the reasons stated previously, we propose to continue to 
require eligible professionals to report on the electronic prescribing 
measure used in 2011 to determine whether an eligible professional is a 
successful electronic prescriber for the remainder of the eRx Incentive 
Program. Please note, however, we also are proposing in section 
IV.F.2.(d).(1). of this proposed rule to modify the electronic quality 
measure's specifications and to use modified reporting criteria based 
on the authority provided under section 1848(m)(3)(D) of the Act. We 
invite public comment on the continued use of reporting the electronic 
prescribing quality measure for purposes of the ``successful electronic 
prescriber'' determination under the program.
(1) Reporting the Electronic Prescribing Quality Measure
    The proposed electronic prescribing quality measure, similar to the 
Physician Quality Reporting System measures, has two basic elements, 
which include: (1) A reporting denominator that defines the patient 
population on which the eligible professional's performance is being 
measured; and (2) a reporting numerator, which identifies whether or 
not a clinical quality action was performed. Our proposals specified 
later in this section apply to the following eRx Incentive Program 
years: The 2012 eRx incentive payment; the 2013 eRx incentive payment; 
the 2013 eRx payment adjustment; and the 2014 eRx payment adjustment.
    Under section 1848(k)(2)(C)(i) of the Act, the electronic 
prescribing measure, which was initially introduced under the Physician 
Quality Reporting System, shall be a measure selected by the Secretary 
that has been endorsed by the entity with a contract with the Secretary 
under section 1890(a) of the Act. Currently, that entity is the 
National Quality Forum (NQF). The electronic prescribing measure we 
propose to retain, NQF Measure 0486: Adoption of Medication e-
Prescribing, is currently endorsed by the NQF.
(2) The Denominator for the Electronic Prescribing Measure
    The denominator for the electronic prescribing quality measure 
consists of specific billing codes for covered professional services.
    As initially required under section 1848(k)(2)(A)(ii) of the Act, 
and further established through rulemaking and under section 
1848(m)(2)(B) of the Act, we may modify the codes making up the 
denominator of the electronic prescribing measure. As such, we expanded 
the scope of the denominator codes for 2010 to covered professional 
services outside the professional office and outpatient setting, such 
as professional services furnished in skilled nursing facilities or the 
home care setting. For 2011, we finalized the following CPT and HCPCS 
codes in the denominator of the electronic prescribing measure: 90801, 
90802, 90804, 90805, 90806, 90807, 90808, 90809, 90862, 92002, 92004, 
92012, 92014, 96150, 96151, 96152, 99201, 99202, 99203, 99204, 99205, 
99211, 99212, 99213, 99214, 99215, 99304, 99305, 99306, 99307, 99308, 
99309, 99310, 99315, 99316, 99324, 99325, 99326, 99327, 99328, 99334, 
99335, 99336, 99337, 99341, 99342, 99343, 99344, 99345, 99347, 99348, 
99349, 99350, G0101, G0108, and G0109 (75 FR 73555). For purposes of 
reporting periods during CYs 2012 and 2013, we propose to retain these 
CPT and HCPCS codes in the denominator of the electronic prescribing 
measure because we believe that these codes represent the types of 
services for which prescriptions are likely to be generated. Therefore, 
if we were to measure an eligible professional's performance on the 
electronic prescribing measure, we would want to do so only for 
patients who saw the professional for such services. For purposes of 
the 2012 and 2013 incentives and 2013 and 2014 payment adjustment, we 
propose to retain the denominator codes contained in the 2011 
electronic prescribing measure. Whereas in prior years we only 
permitted eligible professionals to report the electronic prescribing 
measure's numerator in connection with a service in the measure's 
denominator, as discussed in section IV.F.2.i. of this proposed rule, 
we are proposing to depart from this requirement for purposes of the 
2013 and 2014 payment adjustments.
(3) The Reporting Numerator for the Electronic Prescribing Measure
    Currently, the electronic prescribing measure's numerator consists 
of a single code, G8553, which indicates that at least 1 prescription 
created during the encounter was generated and transmitted 
electronically using a qualified electronic prescribing system.
    For purposes of reporting the measure for the 2012 and 2013 
incentives or the 2013 and 2014 payment adjustment, as in prior years, 
we propose that an eligible professional or group practice 
participating in the eRx GPRO can report the code associated with the 
measure's numerator whenever a prescription is generated and 
transmitted electronically.
    We propose to post the final electronic prescribing measure 
specifications on the ``eRx Measure'' page of the eRx Incentive Program 
section of the CMS Web site at http://www.cms.gov/ERXIncentive by no 
later than--
     December 31, 2011 for the reporting periods that occur 
during calendar year 2012.
     December 31, 2012 for the reporting periods that occur 
during calendar year 2013.
    In the event that additional changes are needed to the measure 
specifications for years after 2012, we would do so via notice and 
comment rulemaking prior to posting the final measure specifications 
for that year. We invite public comment on the proposed numerator for 
the

[[Page 42889]]

electronic prescribing measure for CYs 2012 through 2013.
e. Required Functionalities and Part D Electronic Prescribing Standards
    As previously stated, to report the electronic prescribing measure, 
we propose that the eligible professional or group practice must report 
the measure's numerator G-code. When reporting this G-code for 
incentive payment or payment adjustment purposes, we propose, for 
purposes of the 2012 and 2013 incentive and 2013 and 2014 payment 
adjustment that the eligible professional or eRx GPRO must have and 
regularly use a ``qualified'' electronic prescribing system, which we 
further propose to define as either a system with functionalities 
identified in the electronic prescribing measure specifications, or 
Certified EHR Technology as defined at 42 CFR 495.4 and 45 CFR 170.102. 
This proposal is consistent with our June 1, 2011 proposed rule for the 
2011 eRx Incentive Program (76 FR 31549).
    We are aware that there are significant numbers of eligible 
professionals who are interested in participating in the eRx Incentive 
Program but currently do not have an electronic prescribing system or 
Certified EHR Technology. The electronic prescribing measure does not 
require the use of any particular system or transmission network; only 
that the system be a ``qualified'' system.
    If the professional does not have general access to an electronic 
prescribing system or Certified EHR Technology in the practice setting, 
the eligible professional would not be able to report the electronic 
prescribing measure. In addition to not being eligible for an incentive 
payment, an eligible professional who does not report the electronic 
prescribing measure for 2012 or 2013 would be subject to the 2013 or 
2014 eRx payment adjustment, unless an exception applied. We invite 
public comment on the proposed technological requirements of the 
electronic prescribing quality measure.
(1) ``Qualified'' Electronic Prescribing System
    We propose to retain what constitutes a ``qualified'' electronic 
prescribing system as a system based upon certain required 
functionalities that the system can perform. We propose to retain the 
same functionalities that were required in 2010 and 2011. Therefore, 
for 2012 through 2014, we propose that a ``qualified'' electronic 
prescribing system is one that can do the following:
     Generate a complete active medication list incorporating 
electronic data received from applicable pharmacies and PBMs, if 
available.
     Enable eligible professionals to select medications, print 
prescriptions, electronically transmit prescriptions, as well as 
provide notifications (that is, signals to warn the prescriber of 
possible undesirable or unsafe situations including potentially 
inappropriate dose or route of administration of a drug, drug-drug 
interactions, allergy concerns, or warnings and cautions). This 
functionality must be enabled.
     Provide information related to lower cost, therapeutically 
appropriate alternatives (if any). The ability of an electronic 
prescribing system to receive tiered formulary information, if 
available, would again suffice for this requirement for reporting the 
electronic prescribing measure during the reporting periods occurring 
in CYs 2012 and 2013 until this function is more widely available in 
the marketplace.
     Provide information on formulary or tiered formulary 
medications, patient eligibility, and authorization requirements 
received electronically from the patient's drug plan (if available).
    We invite public comment on the proposed definition of a 
``qualified electronic prescribing system,'' for systems that have 
these four functionalities.
    Furthermore, we are proposing to expand the definition of a 
``qualified electronic prescribing system'' in the electronic 
prescribing measure that would be used for reporting periods that occur 
during CY 2012 and 2013 to include Certified EHR Technology as defined 
at 42 CFR 495.4 and 45 CFR 170.102 because we believe the technological 
requirements for eRx in the EHR Incentive Program are similar to the 
technological requirements for the eRx Incentive Program. We also 
desire to align the requirements of the eRx and the Medicare EHR 
Incentive Program in order to potentially reduce unnecessary investment 
in multiple technologies for purposes of meeting the requirements for 
each program. This proposal is consistent with our June 1, 2011 
proposed rule for the 2011 eRx incentive and the 2013 eRx payment 
adjustment (76 FR 31549).
(2) Part D Electronic Prescribing Standards
    Section 1848(m)(3)(B)(v) of the Act specifies that to the extent 
practicable, in determining whether an eligible professional is a 
successful electronic prescriber, ``the Secretary shall ensure that 
eligible professionals utilize electronic prescribing systems in 
compliance with standards established for such systems pursuant to the 
Part D Electronic Prescribing Program under section 1860D-4(e) of the 
Act''. The Part D standards for electronic prescribing systems 
establish which electronic standards Part D sponsors, providers, and 
dispensers must use when they electronically transmit prescriptions and 
certain prescription related information for Part D covered drugs that 
are prescribed for Part D eligible individuals.
    To be a qualified electronic prescribing system under the eRx 
Incentive Program, electronic systems must convey the information 
listed previously using the standards currently in effect for the Part 
D electronic prescribing program. Additional Part D electronic 
prescribing standards were implemented April 1, 2009. On July 1, 2010, 
we published an Interim Final Rule providing additional updates to Part 
D electronic prescribing standards. These latest Part D electronic 
prescribing standards, and those that had previously been adopted, can 
be found on the CMS Web site at http://www.cms.gov/eprescribing.
    To ensure that eligible professionals utilize electronic 
prescribing systems that meet these requirements, the electronic 
prescribing measure requires that those functionalities required for a 
``qualified'' electronic prescribing system utilize the adopted Part D 
electronic prescribing standards. We propose to modify the Part D 
electronic prescribing standards required for a ``qualified'' 
electronic prescribing system under the eRx Incentive Program to have 
these standards consistent with current, CMS Part D electronic 
prescribing standards. The Part D electronic prescribing standards 
relevant to the four functionalities described previously are as 
follows:
     Generate medication list--Use the National Council for 
Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface 
SCRIPT Standard, Implementation Guide, Version 8 or 10.6, Release 1, 
October 2005 (hereinafter ``NCPDP SCRIPT 8.1 or 10.6'') Medication 
History Standard. Use of NCPDP SCRIPT 10.6 is a new option for use in 
the eRx Incentive Program.
     Transmit prescriptions electronically--Use the NCPDP 
SCRIPT 8.1or 10.6 for the transactions listed at Sec.  423.160(b)(2).
     Provide information on lower cost alternatives--Use the 
NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1, 
Release 0 (Version 1.0), October 2005 (hereinafter ``NCPDP Formulary 
and Benefits 1.0'').

[[Page 42890]]

     Provide information on formulary or tiered formulary 
medications, patient eligibility, and authorization requirements 
received electronically from the patient's drug plan use:
    ++ NCPDP Formulary and Benefits 1.0 for communicating formulary and 
benefits information between prescribers and plans.
    ++ Accredited Standards Committee (ASC) X12N 270/271-Health Care 
Eligibility Benefit Inquiry and Response, Version 4010, May 2000, 
Washington Publishing Company, 004010X092 and Addenda to Health Care 
Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, 
Washington Publishing Company, 004010X092A1 for communicating 
eligibility information between the plan and prescribers.
    ++ NCPDP Telecommunication Standard Specification, Version 5, 
Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch 
Standard Batch Implementation Guide, Version 1, Release 1 (Version 
1.1), January 2000 for communicating eligibility information between 
the plan and dispensers.
    However, there are Part D electronic prescribing standards that are 
in effect for functionalities that are not commonly utilized at this 
time. One example is Rx Fill Notification, which is discussed in the 
Part D electronic prescribing final rule (73 FR 18926). For purposes of 
the eRx Incentive Program for CYs 2012 through 2014, we again are not 
requiring that an electronic prescribing system contain all 
functionalities for which there are available Part D electronic 
prescribing standards since many of these functionalities are not 
commonly available. For those required functionalities previously 
described, we propose that a ``qualified'' system must use the adopted 
Part D electronic prescribing standards listed previously for 
electronic messaging only.
    There are other aspects of the functionalities for a ``qualified'' 
system that are not dependent on electronic messaging and are part of 
the software of the electronic prescribing system, for which Part D 
standards for electronic prescribing do not pertain and are not 
required for purposes of the eRx Incentive Program. For example, the 
requirements in the second functionality that require the system to 
allow professionals to select medications, print prescriptions, and 
conduct alerts are functions included in the particular software, for 
which Part D standards for electronic messaging do not apply.
    As stated previously, we are proposing to expand the definition of 
what constitutes a ``qualified'' electronic prescribing system under 
the electronic prescribing system to also recognize as ``qualified'' 
Certified EHR Technology. Among other requirements, Certified EHR 
Technology must be able to electronically generate and transmit 
prescriptions and prescription-related information in accordance with 
certain standards, some of which have been adopted for purposes of 
electronic prescribing under Part D. Similar to the four 
functionalities previously noted with regard to a qualified eRx system, 
Certified EHR Technology also must be able to check for drug-drug 
interactions and check whether drugs are in a formulary or a preferred 
drug list, although the certification criteria do not specify any 
standards for the performance of those functions. We believe that it is 
acceptable that not all of the Part D eRx standards are required for 
Certified EHR Technology in light of our desire to better align the 
requirements of the eRx and the Medicare EHR Incentive Program and 
potentially reduce unnecessary investment in multiple technologies for 
purposes of meeting the requirements for each program. Furthermore, to 
the extent that an eligible professional uses Certified EHR Technology 
to electronically prescribe under Part D, he or she would still be 
required to comply with the Part D standards to do so.
f. Proposed Reporting Mechanisms for the 2012 and 2013 Reporting 
Periods
    For purposes of the 2011 incentive payment and 2013 payment 
adjustment, an eligible professional (and eRx GPRO, for purposes of the 
2011 incentive) may report on the electronic prescribing measure to 
meet the criteria for being a successful electronic prescriber via 
three reporting mechanisms--claims, qualified registry, and qualified 
EHR product. However, for purposes of the 2012 payment adjustment, due 
to operational limitations, only the claims-based reporting mechanism 
is available for purposes of reporting on the electronic prescribing 
measure for the 2012 payment adjustment (75 FR 73563).
    For reporting periods that occur during CY 2012 and 2013, to 
provide eligible professionals and groups practices with multiple 
mechanisms to report on the electronic prescribing measure for purposes 
of reporting the electronic prescribing measure for the 2012 and 2013 
incentive payments and 2013 and 2014 payment adjustments, we propose 
the following three reporting mechanisms--claims, qualified registry, 
and qualified EHR. However, as in the past, we would not combine data 
on the electronic prescribing measure submitted via multiple reporting 
mechanisms. Combining data received via multiple reporting mechanisms 
would add significant complexity to our analytics and potentially delay 
incentive payments. Therefore, we are proposing that an eligible 
professional or eRx GPRO would need to meet the relevant reporting 
criteria for the incentive or payment adjustment using a single 
reporting mechanism.
    For reporting periods that occur during CYs 2012 and 2013, we also 
propose that a group practice that wishes to participate in the eRx 
Incentive Program as an eRx GPRO for a particular calendar year will 
have to indicate which reporting mechanism the group practice intends 
to use to report the electronic prescribing measure. That is, the group 
practice will need to indicate at the time it self-nominates which 
reporting mechanism (claims, qualified registry, or qualified EHR) the 
group practice intends to use for purposes of participating in the eRx 
GPRO.
    The proposed requirements for each reporting mechanism with respect 
to the 2012 and 2013 incentives and 2013 and 2014 payment adjustments 
are described below.
(1) Claims-Based Reporting
    First, for purposes of reporting the electronic measure for the 
2012 and 2013 incentives as well as the 2013 and 2014 payment 
adjustments, we propose to again retain the claims-based reporting 
mechanism that has been used since the implementation of the eRx 
Incentive Program in 2009 for all remaining incentive and payment 
adjustment years. We are not proposing any prerequisites, such as 
registration, to begin reporting on the electronic prescribing measure 
via claims. Retaining the claims-based mechanism allows eligible 
professionals and group practices to begin to report on the electronic 
prescribing measure without the added cost of submitting data to a 
registry or purchasing an EHR system (if the eligible professional is 
using a standalone eRx system) as eligible professionals already report 
PFS charges via claims.
    If an eligible professional or group practice chooses the claims-
based reporting mechanism, we propose that the eligible professional or 
group practice must directly submit data on the electronic prescribing 
measure. For eligible professionals and group practices participating 
in the eRx GPRO using the proposed claims-based reporting mechanism for 
purposes of

[[Page 42891]]

reporting the electronic prescribing measure during a 12-month 
incentive or payment adjustment reporting period, we propose that all 
claims for services must be processed by us no later than two months 
after the respective reporting period, for the claim to be included in 
our data analysis. (For example, for an eligible professional using the 
12-month, 2014 payment adjustment reporting period, all claims for 
services between January 1, 2012 and December 31, 2012 must be 
processed no later than February 28, 2013 to be included in our data 
analysis.) For eligible professionals and group practices using the 
proposed claims-based reporting mechanism for purposes of reporting the 
electronic prescribing measure during a 6-month payment adjustment 
reporting period, we propose that all claims for services must be 
processed by us by no later than one month after the respective 
reporting period, for the claim to be included in our data analysis 
(for example, for an eligible professional using the 6-month, 2013 
payment adjustment reporting period, all claims for services between 
January 1, 2012 and June 30, 2012 must be processed no later than July 
31, 2012, for the claims to be included in our data analysis.) We 
believe that these proposed reporting periods will allow sufficient 
time for eligible professionals to report the electronic prescribing 
measure, allow us to collect and analyze the data submitted by eligible 
professionals, and avoid retroactive adjustments of payments. We invite 
public comment on our proposal to retain claims-based reporting as a 
reporting mechanism for the eRx Incentive Program.
(2) Registry-Based Reporting
    In addition, for purposes of reporting for the 2012 and 2013 
incentives as well as the 2013 and 2014 payment adjustments, to provide 
an opportunity for individual eligible professionals and group 
practices who choose to participate in the Physician Quality Reporting 
System via registry to use the same reporting mechanism for reporting 
the electronic prescribing measure, we propose to continue the 
registry-based reporting mechanism introduced under the 2010 eRx 
Incentive Program. Retaining the registry-based reporting option 
provides eligible professionals and group practices with another 
alternative to reporting. In addition, unlike claims-based reporting, 
although there may be a cost associated with submitting data to a 
registry, reporting of the electronic prescribing measure to CMS is 
done entirely by the registry.
    We note that there may be a cost associated with submitting data to 
a registry. As in prior program years, we propose that only registries 
qualified to submit quality measure results and numerator and 
denominator data on quality measures on behalf of eligible 
professionals for the Physician Quality Reporting System for the 
applicable calendar year would be qualified to submit measure results 
and numerator and denominator data on the electronic prescribing 
measure on behalf of eligible professionals for the eRx Incentive 
Program.
    Some registries that self-nominate to become a qualified registry 
for the Physician Quality Reporting System may not choose to self-
nominate to become a qualified registry for purposes for the eRx 
Incentive Program. Registries need to indicate their desire to qualify 
to submit measure results and numerator and denominator data on the 
electronic prescribing measure for reporting periods that occur during 
CYs 2012 and 2013 at the time that they submit their self-nomination 
letter for the 2012 and 2013 Physician Quality Reporting System 
respectively. The self-nomination process and requirements for 
registries for the Physician Quality Reporting System, which also will 
apply to the registries for the eRx Incentive Program, are discussed in 
the Physician Quality Reporting System section IV.F.1.(d).(2). of this 
proposed rule. We would post a final list of qualified registries for 
the eRx Incentive Program for CYs 2012 and 2013 on the eRx Incentive 
Program section of the CMS Web site at http://www.cms.gov/ERXIncentive 
when we post the final list of qualified registries for the Physician 
Quality Reporting System for 2012 and 2013 respectively on the 
Physician Quality Reporting System section of the CMS Web site.
    Since we are proposing a 12-month reporting period for purposes of 
the 2012 and 2013 incentive and 6 and 12-month reporting periods for 
purposes of the 2013 and 2014 payment adjustments (as described in the 
section previously), we further propose that qualified registries would 
need to submit the electronic prescribing measure for the eRx Incentive 
Program to us in two separate transmissions, based on the proposed 
reporting periods for the 2012 and 2013 incentive payments and 2013 and 
2014 payment adjustments. Specifically, we propose that qualified 
registries would need to submit 2012 and 2013 data on the electronic 
prescribing measure in two separate submissions:
     Following the end of the respective 6-month payment 
adjustment reporting period (between July 1, 2012 and August 19, 2012, 
for purposes of the 2013 eRx payment adjustment, and between July 1, 
2013 and August 19, 2013, for purposes of the 2014 eRx payment 
adjustment); and
     Following the end of the 12-month reporting period for the 
2012 and 2013 incentives and 2014 payment adjustment.
    We invite public comment on our proposals regarding registry-based 
reporting for the 2012, 2013, and 2014 eRx Incentive Program.
(3) EHR-Based Reporting
    For purposes of reporting for the 2013 incentive as well as the 
2013 and 2014 payment adjustments, in order to provide an opportunity 
for eligible professionals and group practices who choose to 
participate in the Physician Quality Reporting System via EHR as well 
as eligible professionals who participate in the Medicaid or Medicare 
EHR Incentive Program to use the same reporting mechanism for reporting 
the electronic prescribing measure, we propose to retain the EHR-Based 
reporting mechanism to encourage the use of EHR technology as well as 
provide eligible professionals and group practices with a third 
reporting option.
    Similar to registry-based reporting, we propose that direct EHR 
technology as well as EHR data submission vendors (as described in our 
proposals to the Physician Quality Reporting System) ``qualified'' to 
submit extracted Medicare clinical quality data to us for the Physician 
Quality Reporting System would be able to be used by an eligible 
professional or group practice to submit data on the electronic 
prescribing measure for the 2012 and 2013 incentives and 2013 and 2014 
payment adjustments. The self-nomination process and requirements for 
direct EHR products and EHR data submission vendors for the Physician 
Quality Reporting System as discussed previously in section 
IV.F.1.d.(3). of this proposed rule in our 2012 proposals for the 
Physician Quality Reporting System, would continue to apply to the EHR 
products and EHR data submission vendors for the eRx Incentive Program. 
We hope this third reporting option for eligible professionals and 
group practices will encourage the use of EHR technology.
    We propose that direct EHR products and EHR data submission vendors 
be required to indicate their desire to have one or more of their EHR 
products approved for the purpose of an eligible professional 
potentially being able to submit data on the electronic prescribing 
measure for the eRx

[[Page 42892]]

Incentive Program for reporting periods that occur in CYs 2012 and 2013 
at the time they self-nominate for the respective 2012 and 2013 
Physician Quality Reporting System. A list of approved EHR technology, 
their vendors (including the technology's version that is approved) for 
the eRx Incentive Program would be posted on the eRx Incentive Program 
section of the CMS Web site at http://www.cms.gov/ERXIncentive when we 
post the list of approved EHR technology for the Physician Quality 
Reporting System on the Physician Quality Reporting System section of 
the CMS Web site.
    Since we are proposing two reporting periods with respect to the 
2013 and 2014 payment adjustments (described in section (c)(2) 
previously), we further propose that eligible professionals using their 
approved EHR systems would need to submit the electronic prescribing 
measure for the eRx Incentive Program to us in two separate 
transmissions, based on the proposed reporting periods for the 2012 and 
2013 incentive payments and 2013 and 2014 payment adjustments. 
Specifically, we propose that eligible professionals would need to 
submit 2012 and 2013 data on the electronic prescribing measure in two 
separate submissions:
     Following the end of the respective 6-month payment 
adjustment reporting period (between July 1, 2012 and August 19, 2012, 
for purposes of the 2013 eRx payment adjustment, and between July 1, 
2013 and August 19, 2013, for purposes of the 2014 eRx payment 
adjustment); and
     Following the end of the 12-month reporting period for the 
2012 and 2013 incentives and 2014 payment adjustment.
    We invite public comment on our proposals with regard to EHR-Based 
reporting.
g. The 2012 and 2013 eRx Incentives
    42 CFR 414.92(d) states the requirements for individual eligible 
professionals to qualify to receive an incentive payment. We are 
proposing to modify 42 CFR 414.92(d) to add ``being a,'' so that the 
provision reads:

    In order to be considered a successful electronic prescriber and 
qualify to earn an electronic prescribing incentive payment (subject 
to paragraph (c)(3) of this section), an individual eligible 
professional, as identified by a unique TIN/NPI combination, must 
meet the criteria for being a successful electronic prescriber under 
section 1848(m)(3)(B) of the Act and as specified by CMS during the 
reporting period specified in paragraph (d)(1) of this section and 
using one of the reporting mechanisms specified in paragraph (d)(2) 
of this section. Although an eligible professional may attempt to 
qualify for the electronic prescribing incentive payment using more 
than one reporting mechanism (as specified in paragraph (d)(2) of 
this section), the eligible professional will receive only one 
electronic prescribing incentive payment per TIN/NPI combination for 
a program year.

    We believe this change provides more clarity to the provision.
(1) Applicability of 2012 and 2013 eRx Incentives for Eligible 
Professionals and eRx GPROs
    Section 1848(m)(2)(B) of the Act imposes a limitation on the eRx 
incentive payment. The Secretary is authorized to choose 1 of 2 
possible criteria for determining whether or not the limitation applies 
to a successful electronic prescriber:
     Whether Medicare Part B allowed charges for covered 
professional services to which the electronic prescribing quality 
measure applies are less than 10 percent of the total Medicare Part B 
PFS allowed charges for all covered professional services furnished by 
the eligible professional during the reporting period; OR
     The second criterion, under section 1848(m)(3)(B)(iii) of 
the Act, is based on whether the eligible professional submits (both 
electronically and non-electronically) a sufficient number (as 
determined by the Secretary) of prescriptions under Part D (which can, 
again, be assessed using Part D drug claims data). If the Secretary 
decides to use this criterion, the criterion based on the reporting on 
electronic prescribing measures would no longer apply.
    Based on our proposal to make the determination of whether an 
eligible professional or group practice is a ``successful electronic 
prescriber'' based on submission of the electronic prescribing measure 
(the first criterion), we propose to apply the criterion under section 
1848(m)(2)(B)(i) of the Act for the limitation for both the 2012 and 
2013 incentives. Specifically, a successful electronic prescriber is 
eligible for the 2012 and/or 2013 incentive only if the Medicare Part B 
allowed charges for covered professional services to which the 
electronic prescribing quality measure applies comprise at least 10 
percent of the total Medicare Part B PFS allowed charges for all 
covered professional services furnished by the eligible professional or 
group practice during the reporting period.
    For purposes of the 2012 and 2013 incentives, this analysis would 
be performed during the first quarters of 2013 and 2014 respectively by 
dividing the eligible professional's or group practice's (for those 
group practices participation in the eRx GPRO for that year) total 2012 
and 2013 respective Medicare Part B PFS allowed charges for all such 
covered professional services submitted for the measure's denominator 
codes by the eligible professional's or group practices' total Medicare 
Part B PFS allowed charges for all covered professional services. If 
the result is 10 percent or more, then the statutory limitation would 
not apply and a successful electronic prescriber would qualify to earn 
the electronic prescribing incentive payment. If the result is less 
than 10 percent, then the statutory limitation would apply and the 
eligible professional or group practice would not earn an electronic 
prescribing incentive payment even if he or she meets the reporting 
criteria for being a successful electronic prescriber. Although an 
individual eligible professional or group practice may decide to 
conduct his or her own assessment of how likely this statutory 
limitation is expected to apply to him or her before deciding whether 
or not to report the electronic prescribing measure, an individual 
eligible professional or group practice may report the electronic 
prescribing measure without regard to the statutory limitation for the 
incentive payment. We invite public comment on our proposed use of the 
10 percent limitation with respect to the 2012 and 2013 incentive 
payments.
(2) Proposed Reporting Criteria for Being a Successful Electronic for 
the 2012 and 2013 eRx Incentives--Individual Eligible Professionals
    As discussed previously, section 1848(m)(3)(D) of the Act 
authorizes the Secretary to revise the criteria for submitting data on 
the electronic prescribing measure under section 1848(m)(3)(B)(ii) of 
the Act, which requires the measure to be reported in at least 50 
percent of the cases in which the measure is reportable. For 2010 and 
2011, we revised that criterion, such that an eligible professional is 
a successful electronic prescriber by reporting the electronic 
prescribing quality measure for a minimum of 25 unique visits per year 
of applicable cases in the denominator.
    For the 2012 and 2013 incentives, to maintain program consistency 
form year to year, we propose to make the determination of whether an 
eligible professional is a successful electronic prescriber for 
purposes of the incentive based on a count of the number of times 
(minimum threshold of 25) an eligible professional reports that at 
least one prescription created during the denominator-eligible 
encounter is generated using a qualified electronic

[[Page 42893]]

prescribing system, which would include Certified EHR Technology (that 
is, reports the G8553 code when the eligible professional bills for one 
of the services included in the measure's denominator). We believe this 
criterion adequately addresses the goal of the eRx Incentive Program, 
specifically to promote the use of electronic prescribing systems. We 
invite public comment on the proposed criteria for successful 
electronic prescriber with regard to reporting the electronic 
prescribing quality measure by individual eligible professionals for 
purposes of qualifying for the 2012 and 2013 eRx incentive payments.
(3) Proposed Criteria for Being a Successful Electronic Prescriber 2012 
and 2013 eRx Incentives--Group Practices
    Under section 1848(m)(3)(B) of the Act, in order to qualify for the 
incentive payment, an eligible professional or group practice must be a 
``successful electronic prescriber.''
    For a group practice to be a successful electronic prescriber for 
purposes of the 2011 incentive payment, depending on the group's size, 
a group practice was required to report the electronic prescribing 
measure for a minimum of 75 to 2,500 unique visits per year of 
applicable cases in the electronic prescribing measure's denominator. 
Specifically, 2011 eRx GPRO comprised of 26 to 50 eligible 
professionals are required to report the electronic prescribing measure 
for at least 475 unique visits. 2011 group practices comprised of 51 to 
100 eligible professionals are required to report the electronic 
prescribing measure for at least 925 unique visits, and 2011 group 
practices comprised of 101 to 199 eligible professionals are required 
to report the electronic prescribing measure for at least 1,875 unique 
visits.
    Because we seek to simplify the reporting criteria for group 
practices using the eRx GPRO, we propose that, for the 2012 and 2013 
incentive payments and 2013 and 2014 payment adjustments, for a group 
practice using the eRx GPRO to be a successful prescriber, a group 
practice using the eRx GPRO must report the electronic prescribing 
measure's numerator for at least 625 unique visits (for group practices 
comprised of 25-99 eligible professionals) or 2,500 unique visits (for 
group practices comprised of 100 or more eligible professionals). To 
obtain these reporting criteria, we multiplied the smallest group 
practice size for each respective threshold (that is, 25 for the first 
threshold and 100 for the second threshold) by the number of unique 
visits (25) an individual eligible professional must report on the 
electronic prescribing measure in order to qualify for an incentive 
payment. Although this may be a higher reporting threshold for group 
practices using the eRx GPRO comprised of 25-50 eligible professionals 
and group practices using the eRx GPRO comprised of 101-199 eligible 
professionals than in 2011, we believe it is still quite feasible for 
these group practices to meet the respective reporting threshold as 
this would be the reporting threshold should the members of the group 
practice choose to participate in the eRx Incentive Program as 
individual eligible professionals.
    We invite public comment on the proposed criteria for determining 
successful electronic prescribers for eRx GPROs reporting for purposes 
of earning the 2012 and 2013 incentives.
(4) No Double Payments
    We are prohibited from making double payments under section 
1848(m)(3)(C)(iii) of the Act, which requires that payments to a group 
practice shall be in lieu of the payments that would otherwise be made 
under the eRx Incentive Program to eligible professionals in the group 
practice for being a successful electronic prescriber. Accordingly, 
consistent with 2010 and 2011, we propose to make incentive payments to 
group practices based on the determination that the eRx GPRO, as a 
whole, is a successful electronic prescriber for the respective program 
year. An individual eligible professional who is affiliated with a 
group practice participating in the eRx GPRO reporting option that 
meets the requirements of being a successful electronic prescriber 
under a group practice would not be eligible to earn a separate eRx 
incentive payment on the basis of the individual eligible professional 
meeting the criteria for successful electronic reporter at the 
individual level. We invite public comment on the proposed 
determination of the 2012 and 2013 incentive payment amount for group 
practices that are successful electronic prescribers.
    Furthermore, we propose to make a technical change 42 CFR 
414.92(g)(5)(ii) to modify ``another'' to ``a'' to clarify the 
provision.
h. The 2013 and 2014 Electronic Prescribing Payment Adjustments
    As previously stated, for 2012, 2013, and 2014, if the eligible 
professional is not a successful electronic prescriber for the 
reporting period for the year, the PFS amount for covered professional 
services furnished by such professionals during the year shall be less 
than the PFS amount that would otherwise apply by--
     1.0 percent for 2012;
     1.5 percent for 2013; and
     2.0 percent for 2014.
    We propose to modify 42 CFR 414.92 to provide further explanation 
of the requirements for individual eligible professionals and group 
practices for the 2013 and 2014 payment adjustment, which we will 
propose below.
(1) Proposed Limitations to the 2013 and 2014 eRx Payment Adjustments--
Individual Eligible Professionals
    Whereas we believe that an incentive should be broadly available to 
encourage the widest possible adoption of electronic prescribing, even 
for low volume prescribers, we believe that a payment adjustment should 
be applied primarily to assure that those who have a large volume of 
prescribing do so electronically, without penalizing those for whom the 
adoption and use of an electronic prescribing system may be impractical 
given the low volume of prescribing. We propose that the 2013 and 2014 
payment adjustments would not apply if:
     An eligible professional is not an MD, DO, podiatrist, 
nurse practitioner, or physician assistant as of June 30, 2012, for 
purposes of the 2013 payment adjustment and June 30, 2013, for purposes 
of the 2014 payment adjustment. Since these eligible professionals do 
not generally prescribe, we have excluded these eligible professionals 
from the eRx Incentive Program.
    For purposes of determining whether an eligible professional is an 
MD, DO, podiatrist, nurse practitioner, or physician assistant we would 
use National Plan and Provider Enumeration System (NPPES) data. It is 
an eligible professional's responsibility to ensure that his or her 
primary taxonomy code in NPPES is accurate. However, in 2011, we also 
established a G-code, (G8644) that eligible professionals can use to 
report to us that they do not have prescribing privileges. We propose 
to retain the reporting of this G-code for purposes of the 2013 and 
2014 payment adjustments. For purposes of the 2013 payment adjustment, 
we propose that eligible professionals who report this G-code must do 
so on a claim with dates of services during the 6-month reporting 
period (January 1, 2012 and June 30, 2012). For purposes of the 2014 
payment adjustment, we propose that eligible professionals who report 
this G-code must do so on a claim with dates of services during the 6-
month reporting period (January 1, 2013 and June 30,

[[Page 42894]]

2013) so that we are able to distinguish whether a professional is 
reporting this G-code for the 2013 payment adjustment or the 2014 
payment adjustment.
     The eligible professional's Medicare Part B allowed 
charges for covered professional services to which the electronic 
prescribing quality measure applies are less than 10 percent of the 
total Medicare Part B PFS allowed charges for all covered professional 
services furnished by the eligible professional during the respective 
payment adjustment reporting period. This is a required limitation 
under section 1848(m)(2)(B) of the Act. This calculation will be 
performed by dividing the eligible professional's total 2011 Medicare 
Part B PFS allowed charges for all such covered professional services 
submitted for the measure's denominator codes by the eligible 
professional's total Medicare Part B PFS allowed charges for all 
covered professional services (as assessed at the TIN/NPI level). If 
the result is 10 percent or more, then the statutory limitation will 
not apply. If the result is less than 10 percent, then the statutory 
limitation will apply. For the 12-month incentive and payment 
adjustment reporting periods, this calculation is expected to take 
place in the first quarter of the year following the reporting period 
(for example, in the first quarter of 2013 for the 12-month reporting 
period for the 2012 incentive). For the 6-month payment adjustment 
reporting period, this calculation is expected to take place within the 
calendar year for that 6-month reporting period (for example. within 
2012 for the 6-month reporting period for the 2013 payment adjustment).
     An eligible professional who does not have at least 100 
cases (that is, claims for patient services) containing an encounter 
code that falls within the denominator of the electronic prescribing 
measure for dates of service during: The 6-month, 2013 payment 
adjustment reporting period (January 1, 2012 through June 30, 2012) for 
purposes of the 2013 payment adjustment or the 6-month, 2014 payment 
adjustment reporting period (January 1, 2013 through June 30, 2013) for 
purposes of the 2014 payment adjustment. If an eligible professional 
has less than 100 denominator-eligible instances in a 6-month period, 
this would be an indicator to us that the professional likely has a 
small Medicare patient population.
    We invite public comment on the proposed limitations of the 2013 
and 2014 payment adjustments.
(2) Proposed Requirements for the 2013 and 2014 eRx Payment 
Adjustments--Individual Eligible Professionals
    As we explained previously, section 1848(a)(5) of the Act requires 
a payment adjustment be applied with respect to covered professional 
services furnished by an eligible professional in 2013 and 2014, if the 
eligible professional is not a successful electronic prescriber for the 
reporting period for the year. Section 1848(m)(3)(B) of the Act sets 
forth the requirements for being a successful electronic prescriber. 
However, section 1848(m)(3)(D) of the Act authorizes the Secretary to 
revise the criteria for submitting data on the electronic prescribing 
quality measure. In the 2011 PFS Final Rule with comment period, we 
established the same reporting criteria for being a successful 
electronic prescriber for purposes of the 2011 incentive and the 2013 
payment adjustment, based on a 12-month reporting period in 2011 (75 FR 
73565). In order to create another opportunity for an eligible 
professional to become a successful electronic prescriber for purposes 
of the 2013 payment adjustment, we propose the following criteria, 
based on the proposed 6-month reporting period, for being a successful 
electronic prescriber: An eligible professional will be deemed a 
successful electronic prescriber if he/she reports the electronic 
prescribing measure's numerator, that is, at least 1 prescription for 
Medicare Part B PFS patients created during an encounter was generated 
and transmitted electronically using a qualified electronic prescribing 
system at least 10 times during the 6-month payment adjustment 
reporting period (that is, January 1, 2012 through June 30, 2012). 
Unlike the reporting criteria for the incentive payments where the 
numerator must be reported in connection with a denominator-eligible 
visit, for purposes of the 2013 and 2014 payment adjustments, we 
propose an eligible professional would be able to report the measure's 
numerator for any Medicare Part B PFS service provided during the 
reporting period, regardless of whether the code for such service 
appears in the denominator, because we recognize that eligible 
professionals may generate prescriptions during encounters that are not 
necessarily included in the measure's denominator.
    For purposes of avoiding the 2014 payment adjustment, we also seek 
to provide more than one opportunity for eligible professionals to 
avoid the 2014 payment adjustment by becoming a successful electronic 
prescriber. Therefore, consistent with the finalized and proposed 
criteria for successful electronic prescribing for purposes of the 2013 
payment adjustment, we propose that an eligible professional the 
following criteria for an eligible professional to be a successful 
electronic prescriber for purposes of the 2014 payment adjustment: (1) 
An eligible professional meets the criteria for the 2013 incentive, 
that is, reports that at least one prescription for Medicare Part B PFS 
patients created during an encounter was generated and transmitted 
electronically using a qualified electronic prescribing system at least 
25 times during the 12-month payment adjustment reporting period (that 
is, January 1, 2012 through December 31, 2012) or (2) An eligible 
professional reports the electronic prescribing measure's numerator 
(that is, that at least 1 prescription for Medicare Part B PFS patients 
created during an encounter was generated and transmitted 
electronically using a qualified electronic prescribing system) at 
least 10 times during the 6-month payment adjustment reporting period 
(that is, January 1, 2013 through June 30, 2013).
    As with the 2012 and 2013 incentive payments, we propose that the 
determination of whether an eligible professional is subject to the 
payment adjustment will be made at the individual professional level, 
based on the NPI and for each unique TIN/NPI combination. Tables 57 and 
58 reflect the proposed criteria for being a successful electronic 
prescriber for an individual eligible professional for purposes of the 
2013 and 2014 payment adjustment respectively.

[[Page 42895]]



Table 57--Proposed Criteria for Being a Successful Electronic Prescriber
 for the 2013 ERX Payment Adjustment for the Proposed 6-Month Reporting
               Period--Individual Eligible Professionals *
------------------------------------------------------------------------
            Reporting period                         Criteria
------------------------------------------------------------------------
6-month................................  Report the electronic
(Jan 1, 2012-Jun 30, 2012).............   prescribing measure's
                                          numerator code at least 10
                                          times.
------------------------------------------------------------------------
* In the CY 2011 PFS final rule with comment period, we finalized a
  reporting criterion based on a 12-month reporting period (January 1,
  2011 through December 31, 2011) for being a successful electronic
  prescriber for the 2013 payment adjustment. That is, the eligible
  professional becomes a successful electronic prescriber for the 2013
  payment adjustment if, between January 1, 2011 and December 31, 2011 s/
  he reports on the 2011 electronic prescribing measure at least 25
  times.


Table 58--Proposed Criteria for Being a Successful Electronic Prescriber
 for the 2014 ERX Payment Adjustment--Individual Eligible Professionals
------------------------------------------------------------------------
            Reporting period                         Criteria
------------------------------------------------------------------------
12[dash]month..........................  Report the electronic
(Jan 1, 2012-Dec 31, 2012).............   prescribing measure's
                                          numerator code at least 25
                                          times for encounters
                                          associated with at least 1 of
                                          the denominator codes (the
                                          same criteria as the 2013 eRx
                                          incentive).
6[dash]month...........................  Report the electronic
(Jan 1, 2013-Jun 30, 2013).............   prescribing measure's
                                          numerator code at least 10
                                          times.
------------------------------------------------------------------------

    We proposed the previous criteria for being a successful electronic 
prescriber for purposes of the 2013 and 2014 payment adjustments 
because they are consistent with the criteria for being a successful 
electronic prescriber for purposes of the 2012 and 2013 payment 
adjustment that were finalized in the CY 2011 PFS final rule with 
comment period (75 FR 73562 through 73565). We invite public comment on 
the proposed criteria for becoming a successful electronic prescriber 
for the 2013 and 2014 payment adjustments for individual eligible 
professionals.
(3) Proposed Requirements for the 2013 and 2014 eRx Payment 
Adjustments--Group Practices
    As required by section 1848(m)(3)(C) of the Act, we are also 
required to establish and have in place a process under which eligible 
professionals in a group practice shall be treated as a successful 
electronic prescriber for purposes of the payment adjustment. For 
purposes of the 2013 and 2014 payment adjustments, we propose that if a 
group practice chooses to participate in the eRx GPRO during CYs 2012 
and 2013, respectively, then the group practice would be evaluated for 
applicability of the 2013 and 2014 payment adjustment as a group 
practice.
    We propose an eRx GPRO will be deemed a successful electronic 
prescriber for purposes of the 2013 payment adjustment if, during the 
6-month, 2013 payment adjustment reporting period (January 1, 2012 
through June 30, 2012), a group practice reports the electronic 
prescribing measure's numerator (that is, that at least 1 prescription 
for Medicare Part B PFS patients created during an encounter was 
generated and transmitted electronically using a qualified electronic 
prescribing system) at least 625 times (for group practices comprised 
of 25 to 99 eligible professionals) or 2,500 times (for group practices 
comprised of 100+ eligible professionals).
    Similarly, for the 2014 payment adjustment, we propose the 
following: A group practice would be a successful electronic prescriber 
for purposes of the 2014 payment adjustment if the group practice meets 
the 2012 criteria for being a successful electronic prescriber for 
purposes of the 2012 incentive payment. In other words, the group 
practice would need to report the electronic prescribing measure's 
numerator for at least 625 (for group practices comprised of 25 to 99 
eligible professionals) or 2,500 (for group practices comprised of 100 
or more eligible professionals) times for encounters associated with at 
least 1 of the denominator codes that occur between January 1, 2012 and 
December 31, 2012. In addition, we propose that a group practice would 
also be a successful electronic prescriber for purposes of the 2014 
payment adjustment if, during the 6-month, 2014 payment adjustment 
reporting period (January 1, 2013 through June 30, 2013), a group 
practice reports the electronic prescribing measure's numerator (that 
is, that at least 1 prescription for Medicare Part B PFS patients 
created during an encounter was generated and transmitted 
electronically using a qualified electronic prescribing system at least 
625 times (for group practices with 25 to 99 eligible professionals) or 
2,500 times (for group practices with 100+ eligible professionals)).
    In addition, in accordance with the limitation under section 
1848(m)(2)(B)(i) of the Act, the 2013 or 2014 payment adjustment would 
not apply to a group practice in which less than 10 percent of the 
group practice's estimated total allowed charges for the respective 6-
month or 12-month payment adjustment reporting period are comprised of 
services which appear in the denominator of the 2012 or 2013 electronic 
prescribing measure. To be consistent with how this limitation is 
applied to group practices for purposes of the incentive, we propose to 
determine whether this limitation applies to a group practice for the 
payment adjustment at the TIN level. Tables 59 and 60 reflect the 
proposed criteria for being a successful electronic prescriber for a 
group practice for purposes of the 2013 and 2014 payment adjustments, 
respectively.

[[Page 42896]]



Table 59--Proposed Criteria for Being a Successful Electronic Prescriber
 for the 2013 ERX Payment Adjustment for the Proposed 6-Month Reporting
                         Period--Group Practices
------------------------------------------------------------------------
         eRx GPRO Size           Reporting period         Criteria
------------------------------------------------------------------------
25-99 Eligible Professionals..  6[dash]month.....  Report the electronic
                                (Jan 1, 2012-Jun    prescribing
                                 30, 2012).         measure's numerator
                                                    code at least 625
                                                    times.
100+ Eligible Professionals...  6[dash]month.....  Report the electronic
                                (Jan 1, 2012-Jun    prescribing
                                 30, 2012).         measure's numerator
                                                    code at least 2,500
                                                    times.
------------------------------------------------------------------------


Table 60--Proposed Criteria for Being a Successful Electronic Prescriber
for the 2014 ERX Payment Adjustment--Group Practices Using the ERX GPROS
------------------------------------------------------------------------
         eRx GPRO Size           Reporting period         Criteria
------------------------------------------------------------------------
25-99 Eligible Professionals..  12[dash]month....  Report the electronic
                                (Jan 1, 2012-Dec    prescribing
                                 31, 2012).         measure's numerator
                                                    for at least 625
                                                    times for encounters
                                                    associated with at
                                                    least 1 of the
                                                    denominator codes
                                                    (the same criteria
                                                    as the 2012 eRx
                                                    incentive).
100+ Eligible Professionals...  12[dash]month....  Report the electronic
                                (Jan 1, 2012-Dec    prescribing
                                 31, 2012).         measure's numerator
                                                    for at least 2,500
                                                    times for encounters
                                                    associated with at
                                                    least 1 of the
                                                    denominator codes
                                                    (the same criteria
                                                    as the 2012
                                                    incentive).
25-99 Eligible Professionals..  6[dash]month.....  Report the electronic
                                (Jan 1, 2013-Jun    prescribing
                                 30, 2013).         measure's numerator
                                                    code at least 625
                                                    times.
100+ Eligible Professionals...  6[dash]month.....  Report the electronic
                                (Jan 1, 2013-Jun    prescribing
                                 30, 2013).         measure's numerator
                                                    code at least 2,500
                                                    times.
------------------------------------------------------------------------

    We invite public comment on the proposed requirements for 2013 and 
2014 electronic prescribing payment adjustment for eRx GPROs.
(4) Significant Hardship Exemptions
    Section 1848(a)(5)(B) of the Act provides that the Secretary may, 
on a case-by-case basis, exempt an eligible professional from the 
application of the payment adjustment, if the Secretary determines, 
subject to annual renewal, that compliance with the requirement for 
being a successful electronic prescriber would result in a significant 
hardship.
(A) Proposed Significant Hardship Exemptions
    In the CY 2011 PFS Final Rule with comment period (75 FR 73564 
through 75 FR 73565), we finalized two circumstances under which an 
eligible professional or eRx GPRO can request consideration for a 
significant hardship exemption for the 2012 eRx payment adjustment:
     The eligible professional or eRx GPRO practices in a rural 
area with limited high speed internet access.
     The eligible professional or eRx GPRO practices in an area 
with limited available pharmacies for electronic prescribing.
    For the 2013 and 2014 payment adjustments, we propose to retain 
these two significant hardship exemption categories. We propose that 
eligible professionals and eRx GPROs wishing to request applicability 
of these significant hardship exemption categories may do so via a web-
based tool. Alternatively, since we created a G-code for each of the 
previous categories, we propose that eligible professionals and eRx 
GPROs may use the G-codes to request consideration for a significant 
hardship exemption for the 2013 and 2014 payment adjustment by 
reporting the appropriate G-code at least once on claims for services 
rendered during the respective 2013 and 2014 6-month reporting periods.
    Since publication of the CY 2011 PFS Final Rule with comment 
period, we have received numerous requests to expand the categories 
under the significant hardship exemption for the payment adjustment. 
Some stakeholders have recommended specific circumstances of 
significant hardship for our consideration (for example, eligible 
professionals who have prescribing privileges but do not prescribe 
under their NPI, eligible professionals who prescribe a high volume of 
narcotics, and eligible professionals who electronically prescribe but 
typically do not do so for any of the services included in the 
electronic prescribing measure's denominator), while others strongly 
suggested we consider increasing the number of specific hardship 
exemption categories. We believe that many of the circumstances raised 
by stakeholders may pose a significant hardship and limit eligible 
professionals and group practices in their ability to meet the 
requirements for being successful electronic prescribers either because 
of the nature of their practice or because of the limitations of the 
electronic prescribing measure itself, and as a result, such 
professionals might be unfairly penalized. Therefore, in 2011, in the 
proposed rule entitled ``Proposed Changes to the Electronic Prescribing 
(eRx) Incentive'' (76 FR 31547), we proposed to expand the categories 
under the significant hardship exemption for the 2012 payment 
adjustment. Because we believe the reasons for proposing the expanded 
categories under the significant hardship exemption for the 2012 
payment adjustment also apply to the 2013 and 2014 payment adjustments, 
we propose to retain the following significant hardship exemptions for 
the 2013 and 2014 payment adjustments:
     Inability to electronically prescribe due to local, state, 
or federal law or regulation
     Eligible professionals who prescribe fewer than 100 
prescriptions during a 6-month, payment adjustment reporting period
(i) Inability to Electronically Prescribe Due to Local, State, or 
Federal Law or Regulation
    We are proposing that, to the extent that local, State, or Federal 
law or regulation limits or prevents an eligible professional or group 
practice that otherwise has general prescribing authority from 
electronically prescribing (for example, eligible professionals who 
prescribe a large volume of narcotics, which may not be electronically

[[Page 42897]]

prescribed in some states, or eligible professionals who practice in a 
State that prohibits or limits the transmission of electronic 
prescriptions via a third party network such as Surescripts), the 
eligible professional or group practice would be able to request 
consideration for an exemption from application of the 2013 and/or 2014 
payment adjustments, which would be reviewed on a case-by-case basis. 
We believe eligible professionals in this situation face a significant 
hardship with regard to the requirements for being successful 
electronic prescribers because while they may meet the 10 percent 
threshold for applicability of the payment adjustment, or the 100 
denominator-eligible cases limit in a 6-month payment adjustment 
reporting period, they may not have sufficient opportunities to meet 
the requirements for being a successful electronic prescriber because 
Federal, State, or local law or regulation may limit the number of 
opportunities that an eligible professional or group practice has to 
electronically prescribe.
(ii) Eligible Professionals Who Prescribe Fewer Than 100 Prescriptions 
During a 6-Month, Payment Adjustment Reporting Period
    We are proposing that an eligible professional who has prescribing 
privileges but prescribes fewer than 100 prescriptions during a 6-
month, payment adjustment reporting period (for example, a nurse 
practitioner who may not write prescriptions under his or her own NPI, 
a physician who decides to let his Drug Enforcement Administration 
registration expire during the reporting period without renewing it, or 
an eligible professional who prescribed fewer than 100 prescriptions 
between January 1, 2012 and June 30, 2012 regardless of whether the 
prescriptions were electronically prescribed or not), yet still meets 
the 10 percent threshold for applicability of the payment adjustment, 
would be able to request consideration for a significant hardship 
exemption from application of the 2013 and/or 2014 payment adjustment, 
which would be reviewed on a case-by-case basis. We believe that it is 
a significant hardship for eligible professionals who have prescribing 
privileges, but infrequently prescribe, to become successful electronic 
prescribers because the nature of their practice may limit the number 
of opportunities an eligible professional or group practice to 
prescribe, much less electronically prescribe.
    We invite public comments on our proposal to modify 42 CFR 414.92 
to include our proposed significant hardship exemption categories for 
the 2013 and 2014 payment adjustments.
    As we realize that the 4 significant hardship exemptions we have 
proposed above may not capture every circumstance that could constitute 
a significant hardship, we invite public comment on other suggestions 
for significant hardship exemption categories that we may want to 
consider.
(B) Process for Submitting Significant Hardship Exemptions--Individual 
Eligible Professionals and Group Practices
    To request a significant hardship exemption for any of the 
categories proposed and previously described, we are proposing that an 
eligible professional provide to us by the end of the 2013 and/or 2014 
payment adjustment reporting periods (that is June 30, 2012 for the 
2013 payment adjustment and June 30, 2013 for the 2014 payment 
adjustment), the following:
     The name of the practice and other Identifying information 
(for example: TIN, NPI, mailing address, and e-mail address of all 
affected eligible professionals.
     The proposed significant hardship exemption category(ies) 
that apply.
     A justification statement describing how compliance with 
the requirement for being a successful electronic prescriber for the 
respective 2013 and/or 2014 payment adjustment during the reporting 
period would result in a significant hardship to the eligible 
professional.
     An attestation of the accuracy of the information 
provided.
    The justification statement should be specific to the category 
under which the eligible professional or group practice is submitting 
its request and must explain how the exemption applies to the 
professional. For example, if the eligible professional is requesting a 
significant hardship exemption due to Federal, State, or local law or 
regulation, he or she must cite the applicable law and how the law 
restricts the eligible professional's ability to electronically 
prescribe. CMS will review the information submitted by each eligible 
professional on a case-by-case basis. In addition, we are proposing 
that an eligible professional or group practice must, upon request, 
provide additional supporting documentation if there is insufficient 
information (such as, but not limited to, a TIN or NPI that we cannot 
match to the Medicare claims, a certification number for the Certified 
EHR Technology that does not appear on the list of Certified EHR 
Technology, or an incomplete justification for the significant hardship 
exemption request) to justify the request or make the determination of 
whether a significant hardship exists.
    We also are proposing that eligible professionals or group 
practices would be able to submit significant hardship exemption 
requests using the web-based tool or interface (that we also proposed 
to use in the 2011 ``Proposed Changes to the Electronic Prescribing 
(eRx) Incentive Program'' proposed rule). Under the web-based tool, we 
propose that eligible professionals and group practices be able to log-
in, request a specific significant hardship exemption, and provide the 
reasons why a significant hardship exemption should apply. We propose 
that eligible professionals would be required to submit their requests 
for a significant hardship exemption via the web-based tool during the 
relevant 6-month payment adjustment reporting period. For example, if 
an eligible professional is requesting a significant hardship exemption 
from the 2013 payment adjustment, then the request must be submitted 
between January 1, 2012 and June 30, 2012.
    We also are proposing that once we have completed our review of the 
eligible professional's or group practice's request and made a 
decision, we would notify the eligible professional or group practice 
of our decision and all such decisions would be final. Eligible 
professionals or group practices would not have the opportunity to 
request reconsiderations of their requests for significant hardship 
exemption. We invite public comment on the proposed process for 
individual eligible professionals and group practices for submitting 
these requests for significant hardship exemptions to us (including 
comments on the type of information we are proposing eligible 
professionals must submit, the proposed options for how the information 
could be submitted, and the proposed timeframes for submission).

G Physician Compare Web Site

1. Background and Statutory Authority
    Section 10331 (a)(1) of the Affordable Care Act (42 U.S.C. 1395w-5 
note) requires that we, by no later than January 1, 2011, develop a 
Physician Compare Internet Web site with information on physicians 
enrolled in the Medicare program under section 1866(j) of the Act as 
well information on other eligible professionals who participate in the 
Physician Quality Reporting System under section 1848 of the Act (42 
U.S.C. 1395w-4). Public

[[Page 42898]]

reporting of performance results on standardized quality measures 
currently exists on http://www.medicare.gov for the following:
     Hospitals (Hospital Compare).
     Dialysis facilities (Dialysis Facility Compare).
     Nursing homes (Nursing Home Compare).
     Home health facilities (Home Health Compare).
    As an initial step towards providing information on the quality of 
care for services furnished by physicians and other professionals to 
Medicare beneficiaries, we have enhanced the existing Physician and 
Other Health Care Professionals directory at http://www.medicare.gov to 
develop a similar Compare Web site specific to physicians and other 
professionals. In accordance with section 10331 of the Affordable Care 
Act, we launched the first phase of the Physician Compare Internet Web 
site on December 30, 2010. This initial phase included the posting of 
the names of eligible professionals that satisfactorily submitted 
quality data for the 2009 Physician Quality Reporting System.
2. Proposed Plans
    Section 10331 (a)(2) of the Affordable Care Act also requires that, 
no later than January 1, 2013, and with respect to reporting periods 
that begin no earlier than January 1, 2012, we implement a plan for 
making information on physician performance publicly available through 
the Physician Compare Web site. To the extent that scientifically sound 
measures are developed and are available, we are required to include, 
to the extent practicable, the following types of measures for public 
reporting:
     Measures collected under the Physician Quality Reporting 
System.
     An assessment of patient health outcomes and functional 
status of patients.
     An assessment of the continuity and coordination of care 
and care transitions, including episodes of care and risk-adjusted 
resource use.
     An assessment of efficiency.
     An assessment of patient experience and patient, 
caregiver, and family engagement.
     An assessment of the safety, effectiveness, and timeliness 
of care.
     Other information as determined appropriate by the 
Secretary.
    As required under section 10331(b) of the Affordable Care Act, in 
developing and implementing the plan, we must include, to the extent 
practicable, the following:
     Processes to ensure that data made public are 
statistically valid, reliable, and accurate, including risk adjustment 
mechanisms used by the Secretary.
     Processes for physicians and eligible professionals whose 
information is being publically reported to have a reasonable 
opportunity, as determined by the Secretary, to review their results 
before posting to Physician Compare.
     Processes to ensure the data published on Physician 
Compare provides a robust and accurate portrayal of a physician's 
performance.
     Data that reflects the care provided to all patients seen 
by physicians, under both the Medicare program and, to the extent 
applicable, other payers, to the extent such information would provide 
a more accurate portrayal of physician performance.
     Processes to ensure appropriate attribution of care when 
multiple and other providers are involved in the care of the patient.
     Processes to ensure timely statistical performance 
feedback is provided to physicians concerning the data published on 
Physician Compare.
     Implementation of computer and data infrastructure and 
systems used to support valid, reliable, and accurate reporting 
activities.
    Section 10331(d) of the Affordable Care Act requires us to consider 
input from multi-stakeholder groups in selecting quality measures for 
Physician Compare. In developing the plan for making information on 
physician performance publicly available through the Physician Compare 
Web site, section 10331(e) of the Affordable Care Act requires the 
Secretary, as the Secretary deems appropriate, to consider the plan to 
transition to value-based purchasing for physicians and other 
practitioners that was developed under section 131(d) of the Medicare 
Improvements for Patients and Providers Act of 2008.
    We are required, under section 10331(f) of the Affordable Care Act, 
to submit a report to the Congress by January 1, 2015 on the Physician 
Compare Web site developed, and include information on the efforts and 
plans to collect and publish data on physician quality and efficiency 
and on patient experience of care in support of value-based purchasing 
and consumer choice. Section 10331(g) of the Affordable Care Act 
provides that any time before that date, we may continue to expand the 
information made available on Physician Compare.
    We believe section 10331 of the Affordable Care Act supports our 
overarching goals to foster transparency and public reporting by 
providing consumers with quality of care information to make informed 
decisions about their health care, while encouraging clinicians to 
improve on the quality of care they provide to their patients. In 
accordance with Section 10331 of the Affordable Care Act, we intend to 
utilize the Physician Compare Web site to publicly report physician 
performance results.
    For purposes of implementing a plan to publicly report physician 
performance, we plan to use data reported under the existing Physician 
Quality Reporting System as an initial step for making public physician 
``measure performance'' information on Physician Compare. By ``measure 
performance,'' we mean the percent of times that a particular clinical 
quality action was reported as being performed, or a particular outcome 
was attained, for the applicable persons to whom a measure applies as 
described in the denominator for the measure.
    The Physician Quality Reporting System is a readily available 
source of measures performance data. First implemented in 2007, the 
program grew to include 194 different measures in 2011. The measures 
used in the Physician Quality Reporting System cover a wide range of 
health conditions and topics and include measures applicable to most 
physician specialties and other clinicians. Work is underway to ensure 
consistency of quality measures reported under the Physician Quality 
Reporting System and the EHR Incentive Program.
    The first phase of the plan to make information on physicians and 
other eligible professionals who participate in the Physician Quality 
Reporting System publically available was completed through the launch 
of the Physician Compare Web site and the posting of the names of those 
eligible professionals who satisfactorily participated in the Physician 
Quality Reporting System.
    During the second phase of the plan, occurring in 2011 through 
2012, we will continue to work towards the development and improvement 
of the Web site. Our plans for Physician Compare Web site development 
during this second phase include monthly data refreshes and a 
semiannual Web site release to incorporate updates and improvements to 
the Web site. Updates will include the addition of the names of 
eligible professionals who are successful electronic prescribers, as 
required by section 1848(m)(5)(G) of the Social Security Act (the Act), 
as well as the names of those eligible professionals who participate in 
the EHR Incentive Program, as required by section 1848(o)(3)(D) of the 
Act. Additional enhancements planned include the addition of links to 
specialty board Web sites that can provide more information

[[Page 42899]]

on an eligible professional's board certification status and improved 
Web site functionality and layout.
    Moving towards the reporting of physician performance information, 
we propose to take an initial step by making public the performance 
rates of the quality measures that group practices submit under the 
2012 Physician Quality Reporting System group practice reporting option 
(GPRO) described in section IV.F.b.2. of this proposed rule. We also 
propose to publicly report the performance rates of the quality 
measures that the group practices participating in the Physician Group 
Practice demonstration report on the Physician Compare Web site as 
early as 2013 for performance information collected in CY 2012. Subject 
to the discussion later in this section, we would make public the 
measure performance for each of the measures included in the 2012 
Physician Quality Reporting System GPRO. Since the quality measures in 
GPRO are reported for the group as a whole, the information on measure 
performance would also apply to the group as a whole, rather than to 
individual physicians within a group.
    Public reporting of the group practices' measure performance 
results at the group practice level would begin public reporting at the 
earliest time specified by the statute. We believe the design of the 
GPRO (see section IV.F.b.2. of this proposed rule) facilitates making 
public groups' performance results. All groups participating in the 
GPRO would be reporting on the same set of clinical quality measures, 
which allows for comparison of the results across groups.
    To eliminate the risk of calculating performance rates based on a 
small denominator, we propose to set a minimum patient sample size 
threshold. A minimum threshold of 25 patients will have to be met in 
order for the group practice's measure performance rate to be reported 
on the Physician Compare Web site. If the threshold of 25 patients is 
not met for a particular measure, the group's performance rate for that 
measure would be suppressed and not publically reported. In determining 
the minimum patient sample size, we took into consideration the minimum 
patient sample size used by other Compare Web sites that publically 
report measure performance data. We wanted to ensure that we used a 
number large enough to accurately reflect measure performance, but not 
so large that it will limit the number of groups for which measure 
performance could be reported. In taking into consideration the minimum 
patient sample size used by other Compare Web sites that publically 
report measure performance data, we also considered a minimum patient 
sample size of 10 patients, 20 patients and 30 patients. As we are 
proposing to report measure performance at a group level and a majority 
of the other Compare Web sites use minimum sample sizes of between 20 
and 30 patients, we concluded that a minimum patient sample size of 25 
would meet our criteria.
    As discussed in section IV.F.b.2 of this proposed rule, we propose 
that group practices participating in the 2012 Physician Quality 
Reporting System GPRO would agree in advance to have their reporting 
performance results publicly reported as part of their self-nomination 
to participate in the 2012 Physician Quality Reporting System GPRO. 
Finally, we propose to modify the GPRO data collection tool for 2012 to 
calculate the numerator, denominator, and measure performance rate for 
each measure from the data that the group practices use to populate the 
tool and provide each group practice this information at the time of 
tool submission. This feature would allow the group practice the 
opportunity to review their measure performance results before they are 
made public in accordance with section 10331(b) of the Affordable Care 
Act. For groups reporting using GPRO information that is made public in 
2013, we do not propose to post information with respect to the measure 
performance of individual physicians or eligible professionals 
associated with the group. However, we propose to identify the 
individual eligible professionals who were associated with the group 
during the reporting period. We will identify the eligible 
professionals associated with the group by posting a list of the 
eligible professionals on the Physician Compare Web site.
    We believe a staged approach to public reporting of physician 
information allows for the use of information currently available while 
we develop the infrastructure necessary to support the collection of 
additional types of measures and public reporting of individual 
physicians' quality measure performance results. Implementation of 
subsequent phases of the plan will need to be developed and addressed 
in future notice and comment rulemaking, as needed. We invite comments 
regarding our proposal to: (1) To publicly report group practices' 
measure performance results in 2013 based on group practices' 2012 
Physician Quality Reporting System performance results under GPRO; and 
(2) utilize a minimum patient sample size of 25 for reporting and 
displaying measure performance on the Physician Compare Web site.

H. Medicare EHR Incentive Program for Eligible Professionals for the 
2012 Payment Year

1. Background
    On July 28, 2010, we published in the Federal Register (75 FR 
44314) a final rule entitled ``Medicare and Medicaid Programs; 
Electronic Health Record Incentive Program'' to implement the 
provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) 
(Pub. L. 111-5) that amended sections 1848, 1853, and 1886 of the 
Social Security Act (the Act) to provide incentive payments to eligible 
professionals (EPs), eligible hospitals, and critical access hospitals 
(CAHs) participating in the Medicare and Medicaid programs that 
successfully adopt, implement, upgrade, or demonstrate meaningful use 
of certified electronic health record (EHR) technology. In that final 
rule, we specified the initial criteria EPs, eligible hospitals, and 
CAHs must meet in order to qualify for an incentive payment, including 
the initial clinical quality measures (CQMs) for which these providers 
would be required to submit information to the Secretary in the form 
and manner specified by CMS.
    In the July 28, 2010 final rule (75 FR 44430), we stated that for 
the Medicare EHR Incentive Program, for the 2011 payment year, EPs, 
eligible hospitals, and CAHs will be required to submit CQM results as 
calculated by certified EHR technology through attestation, and for the 
2012 payment year and subsequent payment years, they will be required 
to electronically submit CQM results as calculated by certified EHR 
technology. Additionally, we stated that the primary method for these 
providers to report required CQM information electronically will be to 
submit data by an upload process through a CMS-designated portal. In 
the final rule, we also stated that we anticipated that we would have 
completed the necessary steps to have the capacity to receive 
information on CQMs electronically for the 2012 payment year. However, 
we also stated that if the Secretary does not have the capacity to 
accept the information on CQMs electronically in 2012, consistent with 
sections 1848(o)(2)(B)(ii) and 1886(n)(3)(B)(ii) of the Act, then we 
will continue to rely on attestation for reporting CQMs as a 
requirement for demonstrating meaningful use of certified EHR 
technology for the 2012 payment year (75 FR 44380).

[[Page 42900]]

    We also stated in the final rule that certified EHR technology will 
be required to calculate the clinical quality measure results and 
transmit under the Physician Quality Reporting Initiative (PQRI) 
Registry XML specification (75 FR 44435). Since the publication of the 
final rule, we have determined that it is not feasible to receive 
electronically the information necessary for clinical quality measure 
reporting based solely on the use of PQRI 2009 Registry XML 
Specification content exchange standards as is required for certified 
EHR technology. This is because the specification is tailored to the 
elements required for 2009 PQRI Registry submission, rather than 
constituting a more generic standard. As a result, we propose to modify 
the requirement that clinical quality measure reporting must be done 
electronically. Specifically, we propose that for the 2012 payment 
year, EPs may continue to report clinical quality measure results as 
calculated by certified EHR technology by attestation, as for the 2011 
payment year.
    In addition to attestation, we propose to establish a pilot 
mechanism through which EPs participating in the Medicare EHR Incentive 
Program may report CQM information electronically using certified EHR 
technology for the 2012 payment year. Participation in the pilot would 
be voluntary and would enable EPs to satisfy the Medicare EHR Incentive 
Program requirements for reporting CQMs for the 2012 payment year. EPs 
who choose not to participate in the pilot would be able to continue to 
use an attestation methodology for reporting CQMs for payment year 
2012.
    We propose to modify 42 CFR 495.8(a)(2) by adding a new paragraph 
to allow for the reporting of CQMs for the Medicare EHR Incentive 
Program via the Physician Quality Reporting System-Medicare EHR 
Incentive Pilot. Furthermore we are proposing to revise 42 CFR 
495.8(a)(2)(ii) by deleting the word ``electronically'' and adding the 
words ``form and'' such that it reads as follows:

    Reporting of clinical quality information. For 42 CFR 
495.6(d)(10), `Report ambulatory clinical quality measures to CMS 
or, in the case of Medicaid EPs, the States,' report the ambulatory 
clinical quality measures selected by CMS to CMS (or in the case of 
Medicaid EPs, the States) in the form and manner specified by CMS 
(or in the case of Medicaid EPs, the States).
2. The Proposed Physician Quality Reporting System-Medicare EHR 
Incentive Pilot
    We propose to modify 42 CFR 495.8(a)(2) to indicate that EPs 
participating in the Medicare EHR Incentive Program can meet the CQM 
reporting requirements of the EHR Incentive Program for payment year 
2012 by participating in a pilot, which we refer to as the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot. Sections 
1848(o)(2)(B)(ii) of the Act provides authority for the Secretary to 
accept information on CQMs electronically on a pilot basis. We propose 
that EPs may participate in the pilot on a voluntary basis, and that 
those EPs who choose not to participate may instead continue to attest 
to the results of the CQMs as calculated by certified EHR technology, 
consistent with the CQM reporting method for the 2011 payment year. 
However, we encourage participation in the pilot based on our desire to 
adequately pilot electronic submission of CQMs and to move to a system 
of reporting where EPs can satisfy the CQM reporting requirements for 
both the Physician Quality Reporting System and the EHR Incentive 
Program. To participate in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot, we propose that EPs would be required to 
electronically report the CQMs using certified EHR technology via one 
of two options that are based on the existing reporting platforms of 
the Physician Quality Reporting System. As described later in this 
section, one option would be based on the infrastructure used for the 
Physician Quality Reporting System EHR data submission vendor reporting 
mechanism. The second option would be based on the infrastructure used 
for the Physician Quality Reporting System EHR reporting mechanism. EPs 
who seek to participate in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot must also participate in the Physician 
Quality Reporting System itself, because the pilot will rely on the 
infrastructure used for Physician Quality Reporting System.
    To move towards the integration of reporting on quality measures 
under the Physician Quality Reporting System with the reporting 
requirements of the Medicare EHR Incentive Program, as required by 
section 1848(m)(7) of the Act (``Integration of Physician Quality 
Reporting and EHR Reporting''), we propose that participation in the 
Physician Quality Reporting System-Medicare EHR Incentive Pilot would 
require EPs to submit information on the same CQMs that were adopted 
for EPs for the Medicare EHR Incentive Program and included in Tables 6 
and 7 of the July 28, 2010 final rule (75 FR 44398 through 44410). We 
propose that EPs participating in this pilot must submit information on 
the three core measures included in Table 7, up to three of the 
alternate core measures included in Table 7 insofar as the denominator 
for one or more of the core measures is zero, and three additional 
measures from the measures included in Table 6, as is otherwise 
required by the final rule to successfully demonstrate meaningful use 
(75 FR 44409 through 44411). EPs that elect to participate in this 
Physician Quality Reporting System-Medicare EHR Incentive Pilot will 
still be required to report information on the CQMs as required under 
the Stage 1 criteria established for the Medicare EHR Incentive Program 
regardless of which option they select as described later in this 
section. As the reporting of CQMs is only one of the 15 core meaningful 
use objectives for EPs for the Medicare EHR Incentive Program, an EP 
who elects to participate in the proposed Physician Quality Reporting 
System-Medicare EHR Incentive Pilot would still be required to meet and 
attest to the remaining 14 core objectives and required menu set 
objectives using the attestation module on the CMS Web site for the 
program. Consequently, participation in this pilot only applies to the 
method of reporting for meeting the meaningful use CQM objective in the 
EHR Incentive Program (42 CFR 495.6(d)(10)).
    To participate in the Physician Quality Reporting System-Medicare 
EHR Incentive Pilot, we propose EPs would be required to electronically 
report the CQMs by choosing one of the options described later in this 
section. By submitting the required information through the pilot, an 
EP could meet the core objective for reporting CQMs for the Medicare 
EHR Incentive Program for the 2012 payment year. After attesting to all 
other meaningful use objectives, the EP's attestation file would be 
placed in a holding status, with respect to the CQM objective only, 
until the EP reports the CQMs via one of the proposed Physician Quality 
Reporting System-Medicare EHR Incentive Pilot options. Thus, the EP 
would not know if he/she successfully met the requirements for the 
Medicare EHR Incentive Program with respect to the CQM objective until 
the CQMs are received at the end of the submission period for measures 
for the Physician Quality Reporting System (we expect this would be 2 
months after the close of the reporting period, which is the CY 2012, 
and no later than February 29, 2013). As explained later in this 
section, any EP participating in this pilot would be required to report 
CQMs based on a full calendar year, regardless

[[Page 42901]]

of the EP's year of participation in the Medicare EHR Incentive 
Program.
    If the EP who selects one of the pilot options subsequently 
determines completion of the pilot is unfeasible, then we propose it is 
permissible for the EP to go back into the Medicare EHR Incentive 
Program attestation module on the CMS Web site and complete attestation 
for the CQMs assuming it is within the reporting timeframes established 
under the EHR Incentive Program. We note that EPs who are in their 
first year of participation in the EHR Incentive Program and choose to 
participate in the Physician Quality Reporting System-Medicare EHR 
Incentive Pilot only will have their EHR incentive payments delayed 
until the data submitted under the Pilot has been analyzed. However, 
participation in this Physician Quality Reporting System-EHR Incentive 
Pilot will allow for the receipt of EHR Incentive Program and Physician 
Quality Reporting System incentives, provided an EP meets the 
provisions described later in this section.
a. EHR Data Submission Vendor-Based Reporting Option
    As discussed further in the Physician Quality Reporting System 
section IV.F.1(d).(3).(b). of this proposed rule, EPs participating in 
the Physician Quality Reporting System may choose to report the 
Physician Quality Reporting System measures to CMS via a Physician 
Quality Reporting System qualified EHR data submission vendor. For 
purposes of the Physician Quality Reporting System, a Physician Quality 
Reporting System qualified EHR data submission vendor would receive 
data from an EP's EHR and subsequently reformat and transmit the data 
on behalf of the EP to CMS. Under this reporting option, we propose 
that an EP participating in the Physician Quality Reporting System-
Medicare EHR Incentive Pilot would submit CQM data from his or her 
certified EHR technology to a Physician Quality Reporting System 
qualified EHR data submission vendor. We expect to post a list of the 
2012 Physician Quality Reporting System EHR data submission vendors 
that are qualified to submit data from an EP's certified EHR technology 
to CMS on the EP's behalf on the Physician Quality Reporting System 
section of the CMS Web site (http://www.cms.gov/pqrs) by summer 2012.
    Under this option, the Physician Quality Reporting System qualified 
EHR data submission vendor would obtain data elements for the 
calculation of CQMs from the EP's certified EHR technology and then 
submit the calculated results to CMS on the EP's behalf via a secure 
portal. As discussed previously, in order for an EP to submit CQMs 
electronically through the Physician Quality Reporting System-Medicare 
EHR Incentive Pilot EHR data submission vendor-based reporting option, 
we propose that such EPs must submit information on the same CQMs as 
required by the July 28, 2010 final rule, which must be based on data 
contained in the EP's certified EHR technology. However, it would be 
sufficient for an EP participating in this EHR data submission vendor-
based reporting option to submit CQM data as required by the pilot even 
though such data would differ from what is required by the July 28, 
2010 final rule in the following two respects: (1) The data would be 
limited to Medicare patients rather than all patients, and (2) the data 
would be based on a CQM reporting period of 1-calendar year regardless 
of which year of participation in the Medicare EHR Incentive Program 
the EP is in (resulting in a later determination of whether the EP has 
successfully demonstrated meaningful use, for those EPs in their first 
year of program participation). We invite comment on the proposed EHR 
data submission vendor-based reporting option under the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot.
b. EHR-Based Reporting Option
    As discussed further in the Physician Quality Reporting System 
section IV.F.1.(d).(3).(a). of this proposed rule, EPs participating in 
the Physician Quality Reporting System via the EHR reporting mechanism 
can choose to report the Physician Quality Reporting System measures to 
CMS directly from the EP's EHR. Therefore, under this EHR-Based 
reporting option, we propose that an EP participating in the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot would submit CQM 
data directly from his or her certified EHR technology to CMS via a 
secure portal using the infrastructure of the Physician Quality 
Reporting System EHR reporting mechanism. We propose that in order to 
participate in the Physician Quality Reporting System-Medicare EHR 
Incentive Pilot under this option, the EP's certified EHR technology 
must also be a 2012 Physician Quality Reporting System qualified EHR. 
We expect to post a list of the 2012 Physician Quality Reporting System 
qualified EHRs on the Physician Quality Reporting System section of the 
CMS Web site prior to January 1, 2012. Due to this proposed Physician 
Quality Reporting System-Medicare EHR Incentive Pilot, we are proposing 
to have an additional vetting process for EHR vendors wishing to 
participate in the Pilot. We expect to post an additional list of these 
additional 2012 qualified EHR vendors, if applicable, and their 
products in the summer of 2012.
    As discussed previously, in order for an EP to submit CQMs 
electronically through the Physician Quality Reporting System-Medicare 
EHR Incentive Pilot EHR-Based reporting option, we propose that such 
EPs must submit information on the same CQMs as required by the July 
28, 2010 final rule, which must be based on data contained in the EP's 
certified EHR technology. That is, EPs participating in this pilot must 
submit information on the three core measures included in Table 7, up 
to three of the alternate core measures included in Table 7 insofar as 
the denominator for one or more of the core measures is zero, and three 
additional measures from the measures included in Table 6, as is 
otherwise required by the final rule to successfully demonstrate 
meaningful use. If the EP cannot report three additional measures 
without zero denominators, the EP must report on all applicable 
measures (that is, 1 or 2 measures) and attest that all remaining 
measures have zero denominators. However, as with the EHR data 
submission vendor-based reporting option, the data would be different 
from what is required by the July 28, 2010 final rule in that it would 
be: (1) Limited to Medicare patients rather than all patients; (2) 
patient-level data from which we may calculate CQM results using a 
uniform calculation process, rather than aggregate results calculated 
by the EP's certified EHR technology; and (3) based on a CQM reporting 
period of 1 calendar year regardless of the EP's year of participation 
in the Medicare EHR Incentive Program (resulting in a later 
determination of whether the EP has successfully demonstrated 
meaningful use, for those EPs in their first year of program 
participation). We invite comment on the proposed EHR-Based reporting 
option under the Physician Quality Reporting System-Medicare EHR 
Incentive Pilot.
    In addition, as discussed in the Physician Quality Reporting System 
section of this proposed rule, we propose if an EP successfully submits 
all required CQM data from certified EHR technology, which also must be 
a Physician Quality Reporting System qualified EHR product, directly to 
CMS, then the EP would also meet the criteria for satisfactory 
reporting under the 2012 Physician Quality Reporting System, which 
would also qualify the EP under

[[Page 42902]]

the 2012 Physician Quality Reporting System.
    The Medicare EHR Incentive Program measures, including the core and 
alternate core measures, and the 38 additional measures, are specified 
in the Physician Quality Reporting System's Table 31 of this proposed 
rule. It should be noted that while the EP is required to use certified 
EHR technology, the electronic submission format used for this pilot is 
not a functionality of certified EHR technology. Rather, for purposes 
of the pilot, the certified EHR technology must conform to the 
qualifications for an EHR under the Physician Quality Reporting System.
3. Method for EPs To Indicate Election To Participate in the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot for Payment Year 
2012
    EPs electing to participate in the Physician Quality Reporting 
System-Medicare EHR Incentive Pilot would be able to indicate their 
intent to fulfill the CQM objective by participating in the Physician 
Quality Reporting System-Medicare EHR Incentive Pilot under the EHR 
Incentive Program attestation module. The EHR Incentive Program 
attestation module is available on the CMS Web site at https://www.cms.gov/EHRIncentivePrograms/32_Attestation.asp#TopOfPage.

I. Improvements to the Physician Feedback Program and Establishment of 
the Value-Based Payment Modifier (Effect of Sections 3003 and 3007 of 
the Affordable Care Act on the Program)

1. Overview
    The requirements of the Physician Feedback Program, in section 
1848(n) of the Act, as amended by section 3003(a) of the Affordable 
Care Act, and the value-based payment modifier (``value modifier''), 
under section 1848(p) of the Act, as added by section 3007 of the 
Affordable Care Act, mutually reinforce our goal to provide physicians 
with fair, actionable and meaningful information concerning resource 
use and quality regarding their Medicare fee-for-service patients. We 
view value-based purchasing (``VBP'') as an important step toward 
revamping not only how care and services are paid for, but also moving 
increasingly toward rewarding better value, outcomes and innovations 
instead of volume. The approach used this year and that we anticipate 
using in future years for the Physician Feedback reports will serve as 
the testing basis to develop and implement the value modifier, which 
will be applied to certain physicians and physician groups under the 
physician fee schedule starting in 2015.
    In 2011, we will begin to include the quality measures that are 
reported in the Physician Quality Reporting System in the Physician 
Feedback reports. Aligning quality measures reduces potential program 
inconsistencies, ensures we do not measure the same clinical process or 
outcome using different data sources or methodologies, and does not 
place new reporting burdens on physicians. For physicians who 
participate in the Physician Quality Reporting System, it also 
identifies clear and consistent opportunities for improvement, because 
the Feedback reports will show how their performance compares to their 
peers on the same quality measures.
    Under section 1848(p)(4)(B) of the Act, we are required to begin 
implementing the value modifier through the rulemaking process during 
2013, so that it is ready for application to specific physicians and 
groups of physicians under the physician fee schedule in 2015. We 
expect the value modifier to evolve after its initial application in 
2015. We anticipate that information we have obtained from the 
Physician Feedback reports, our efforts to learn from and build upon 
the best transparent practices and methodologies developed in the 
private sector, and our continued and sustained dialogue with the 
physician and patient communities will yield significant improvements 
to the development of the value modifier. We plan to move forward with 
substantial input from physicians and experts as we continue to develop 
and implement these programs.
2. Background
    As required under section 1848 (n) of the Act, as added by section 
131(c) of the Medicare Improvements for Patients and Providers Act and 
amended by section 3003(a) of the Affordable Care Act, we established 
and implemented by January 1, 2009, the Physician Resource Use 
Measurement & Reporting Program (now referred to as the Physician 
Feedback Program) (74 FR 61844). The purpose of the Physician Feedback 
Program is to provide confidential reports to physicians that measure 
the resources involved in furnishing care to Medicare beneficiaries. 
Section 1848(n) of the Act also authorized us to include information on 
the quality of care furnished to Medicare beneficiaries by a physician 
or group of physicians. We have completed two phases of Physician 
Feedback reports and, by the end of 2011, we intend to implement Phase 
III of the Physician Feedback Program, by providing reports on both 
resource use and quality measures that cover a larger number and 
increased breadth of physicians and groups of physicians.
    Phase I was discussed in the CY 2010 PFS proposed and final rules 
(74 FR 33589 and 74 FR 61844, respectively). In Phase I, we sent to 
several hundred individual practicing physicians in 12 geographic areas 
reports that contained per capita and episode-based cost information 
based on 2007 claims.\1\ In creating these reports, we assessed patient 
attribution models and risk adjustment methodologies. We also tested 
various report designs with practicing physicians.
---------------------------------------------------------------------------

    \1\ The 12 geographic areas are: Boston, MA, Syracuse, NY, 
Northern New Jersey, Greenville, SC, Miami, FL, Little Rock, AR, 
Indianapolis, IN, Cleveland, OH, Lansing, MI, Phoenix, AZ, Seattle, 
WA, and Orange County, CA.
---------------------------------------------------------------------------

    In Phase II of the Physician Feedback Program, we expanded on Phase 
I by providing reports that included quality measures for both 
individual and groups of physicians in the same 12 geographic areas 
using the same 2007 claims data. (Phase II was discussed in the CY 2011 
PFS proposed and final rules 75 FR 40113 and 75 FR 73377, 
respectively). The quality measures used were the claims-based measures 
developed by us in the Generating Medicare Physician Quality 
Performance Measurement Results (GEM) project (74 FR 61846).\2\ This 
initial core set of 12 quality measures was a first step to provide 
sufficient quality information to allow peer group comparisons. These 
measures were calculated using administrative claims data and did not 
require physicians to submit additional quality data. The measures 
captured several chronic conditions that are prevalent in the Medicare 
population and could be applied to all eligible physicians, although 
the measures were most applicable to primary care physicians.
---------------------------------------------------------------------------

    \2\ http://www.cms.gov/GEM.
---------------------------------------------------------------------------

    Phase II reports contained total per capita cost information, as 
well as total per capita cost information for those beneficiaries with 
the following five common chronic diseases: (1) Diabetes; (2) 
congestive heart failure; (3) coronary artery disease; (4) chronic 
obstructive pulmonary disease; and (5) prostate cancer. This 
information was not limited to the cost of treating the disease itself, 
but also included total Parts A and B per capita cost information, as 
well as service category breakdowns, for the care received by the 
subset of attributed beneficiaries with that disease. Phase II reports 
did not include episode-specific cost information (as we had included 
in the Phase I reports),

[[Page 42903]]

because we found that the two commercially available proprietary 
groupers, which were not built for use with Medicare claims data, did 
not work well to create episodes for the significant number of Medicare 
beneficiaries with multiple chronic conditions (75 FR 73378).
    We provided Phase II reports to 36 group practices and 
approximately 1,650 individual physicians who were members of these 
practices in the 12 geographic areas identified in Phase I. A group was 
defined as a single provider entity, identified by its tax 
identification number (TIN), which served at least 5,000 Medicare 
beneficiaries and in which at least one primary care physician and at 
least one medical specialist or surgeon in the group billed for 
Evaluation and Management (E/M) Medicare services. The use of group 
reports allowed for more robust comparisons on a fuller set of quality 
measures, because the groups were more likely to have sufficient number 
of cases to calculate each measure.
    We used a ``single-provider plurality-minimum \3\'' method to 
attribute beneficiaries to the 36 group practices and the individual 
physicians. This method was based on the highest number of E/M services 
furnished by an individual physician and a minimum threshold of 20 
percent of E/M costs.\4\ Attribution of a beneficiary to a group 
practice was based on the group practice that provided the plurality of 
E/M services and a minimum threshold of 30 percent of E/M costs. For 
both individuals and groups, we required at least 30 beneficiaries to 
be assigned to either the individual or the group practice.\5\ Seventy 
percent of eligible beneficiaries were attributed to an individual 
physician or group practice. These beneficiaries accounted for 53 
percent of total Parts A and B costs but covered only 30 percent of 
individual physicians.
---------------------------------------------------------------------------

    \3\ Under a ``single-provider plurality-minimum'' attribution 
method, a beneficiary is attributed to the one physician who 
furnished the plurality of the beneficiary's E/M services during the 
year so long as that physician billed at least 20 percent of the 
beneficiary's E/M allowed charges for the year. If a beneficiary did 
not receive the plurality of services from the same physician that 
met the 20 percent minimum, the beneficiary was not assigned to a 
physician. For a more detailed discussion of methodology issues, see 
the Detailed Methodology Specification, available at https://www.cms.gov/PhysicianFeedbackProgram/Downloads/2010_QRUR_Detailed_Methodology.pdf.
    \4\ Costs refer to allowed charges for Part A and B services.
    \5\ We chose 30 beneficiaries because this threshold is commonly 
used for attribution purposes.
---------------------------------------------------------------------------

    Our data analysis showed that the single-provider plurality-minimum 
rule generally assigned Medicare beneficiaries correctly to primary 
care physicians including internists, geriatricians, family 
practitioners, and general practitioners. However, this rule did not 
work well to attribute beneficiaries with multiple conditions that see 
a variety of physicians, because a single physician was unlikely to 
have both provided the plurality of E/M visits and to have also 
accounted for 20 percent of E/M costs.
    As in Phase I, we price standardized the cost data to adjust for 
geographic differences. We also employed the same method of risk 
adjustment for per capita costs as we use in the Medicare Advantage 
(MA) program; that is, the hierarchal condition category (HCC) model 
for the cost data.\6\ We did not risk-adjust the quality data included 
in Phase II, because the GEM measures are all clinical process 
measures, measure specifications provided detailed inclusion/exclusion 
criteria, and it is generally accepted that these measures need not be 
risk adjusted.
---------------------------------------------------------------------------

    \6\ For more information about hierarchal condition categories 
model, see https://www.cms.gov/MedicareAdvtgSpecRateStats/downloads/Evaluation_Risk_Adj_Model_2011.pdf.
---------------------------------------------------------------------------

    The individual-level reports in both phases of the program 
contained two peer group comparisons: (1) Physicians in the same 
specialty in the same geographic area; and (2) physicians in the same 
specialty across all 12 geographic areas. Peer group comparisons were 
made for both measures of cost and quality. We imposed a minimum peer 
group size of 30 physicians in Phase II for each of the cost and 
quality measures to ensure the group comparisons were credible to the 
physicians being compared. For the per capita cost measures, the 
physician was shown his or her position in a distribution that 
specifically identified the 10th, 50th, and 90th percentiles of 
performance.
3. Future Considerations for Phase III Physician Feedback Program
a. Phase III Physician Feedback Reports (Fall 2011)
    Based on the experience gained so far and our plan to provide 
reports to a greater number and percentage of physicians, we intend to 
increase production and dissemination of Physician Feedback reports. In 
2011, we are examining several approaches to developing and 
disseminating reports based on our 2010 experience. We believe that 
many of the issues we address in these reports will assist us as we 
begin to implement the value modifier in 2013.
    We anticipate using quality measures reported in the Physician 
Quality Reporting System in the Physician Feedback reports this year. 
We further believe that use of these measures will begin to reduce 
potential program inconsistencies, ensure we do not measure the same 
clinical process or outcome using different data sources or 
methodologies, and not place new reporting burdens on physicians. In 
addition, elsewhere in this proposed rule, we are proposing to align 
the quality measures in the Physician Quality Reporting System with the 
Electronic Health Records incentive program quality measures. We seek 
comment on using the performance data in the Physician Quality 
Reporting System in the Physician Feedback program and on other issues 
discussed below that could help inform future phases of the Physician 
Feedback program.
(1) Physician Group Reports
    We intend to create physician feedback reports for the 35 large 
medical group practices (each with 200 or more physicians) that chose 
to participate in the Physician Quality Reporting System Group Practice 
Reporting Option (GPRO-1) in 2010. We specifically chose these medical 
groups, because they could be compared on the common set of 26 quality 
measures included in the GPRO-1 reporting tool. The reports will be e-
mailed to each group. We anticipate scheduling outreach and feedback 
sessions following dissemination of these reports to garner physician 
reaction to the information contained in the reports and elicit 
physician input on ways to increase their utility in future years.
    The resource use portion of these reports will present summary 
information based on 2010 Medicare Parts A and B paid claims for all 
Medicare providers paid under the PFS who treated patients attributed 
to a participating medical practice group. This information will allow 
each group to compare its per capita Medicare costs to the per capita 
Medicare costs attributed to all 35 medical practice groups that 
participated in the 2010 GPRO-1 cohort. In addition, the report will 
show each medical group its average per capita costs for various types 
of fee-for-service patient services. The reports will also display 
group-specific data on per capita costs and hospital utilization of 
patients who have chronic conditions such as diabetes, heart failure, 
COPD, and coronary artery disease. Data in these reports will be risk 
adjusted and price standardized in a similar manner to the Phase II 
reports.

[[Page 42904]]

    The quality portion of these reports will present the group's 
performance on each of the 26 quality measures included in the 
Physician Quality Reporting System 2010 GPRO-1 reporting option. It 
will also show the average rate of preventable hospital admissions (for 
which a lower rate is better) for six ambulatory care-sensitive 
conditions: Diabetes, bacterial pneumonia, dehydration, chronic 
obstructive pulmonary disease (COPD), urinary tract infection, and 
congestive heart failure. The information presented will also allow 
each group to compare its performance to the performance of all of the 
35 medical practice groups that participated in the 2010 GPRO-1 cohort.
(2) Reports to Individual Physicians
    Late in 2011, we also intend to disseminate Physician Feedback 
reports to physicians paid under the PFS within four states: Iowa, 
Kansas, Missouri, and Nebraska. We choose these four states because the 
Medicare Administrative Contractor (MAC) serving these states can 
assist us in e-mailing these reports to a substantial number of 
physicians because of its robust electronic communications 
infrastructure. There are approximately 56,000 physicians in these four 
states. We realize, however, that we will not produce reports for all 
of these physicians, because some portion of the total will not have 
sufficient numbers of fee-for-service Medicare patients to qualify for 
a report based on the attribution rules we use. As discussed later in 
this section, we are examining which attribution rules to apply to 
these individual reports.
    Individual physicians in these four States who satisfactorily 
reported data on quality measures under the Physician Quality Reporting 
System will receive a report that includes their performance on these 
quality measures. In addition, individual reports will display clinical 
quality measures that are derived from Medicare claims for all 
physicians in these four States. We used an internal multi-step process 
among our medical officers (who represent a variety of medical 
specialties) and other internal experts to identify these claims-based 
quality measures. Our medical officers and internal experts thoroughly 
reviewed over 70 claims-based National Quality Forum-endorsed measures 
and ultimately recommended 28 claims-based clinical measures to include 
in the 2011 individual physician reports. These measures include the 12 
HEDIS measures that CMS included in the 2010 reports. Use of these 28 
measures in the 2011 reports will allow us to have a sufficient number 
of cases to make peer group comparisons, which we believe are a 
critical component of the Physician Feedback program. The claims-based 
clinical measures for the 2011 individual physician feedback reports 
are displayed in Table 61 and additional information on these measures 
is available at: http://www.cms.gov/physicianfeedbackprogram/.

               Table 61--Claims-Based Measures for the 2011 Individual Physician Feedback Reports
----------------------------------------------------------------------------------------------------------------
                       Measure title and   NQF measure No. or measure steward
     Measure No.          description                       *                            Source of data
----------------------------------------------------------------------------------------------------------------
1...................  Acute Myocardial     0071..............................  Administrative Claims.
                       Infarction (AMI):
                       Persistence of
                       Beta-Blocker
                       Treatment After a
                       Heart Attack.
                      Percentage of
                       patients age 18
                       years and older
                       during the
                       measurement year
                       who were
                       hospitalized and
                       discharged alive
                       with a diagnosis
                       of acute
                       myocardial
                       infarction (AMI)
                       and who received
                       persistent beta-
                       blocker treatment
                       for six months
                       after discharge.
2...................  Use of Spirometry    0577..............................  Administrative Claims.
                       Testing in the
                       Assessment and
                       Diagnosis of COPD).
                      Percentage of
                       patients at least
                       40 years old who
                       have a new
                       diagnosis or newly
                       active chronic
                       obstructive
                       pulmonary disease
                       (COPD) who
                       received
                       appropriate
                       spirometry testing
                       to confirm the
                       diagnosis.
3...................  Antidepressant       0105..............................  Administrative Claims.
                       Medication
                       Management: (a)
                       Effective Acute
                       Phase Treatment.
                      Percentage of
                       patients who were
                       diagnosed with a
                       new episode of
                       depression and
                       treated with
                       antidepressant
                       medication and who
                       remained on an
                       antidepressant
                       drug during the
                       entire 84-day
                       Acute Treatment
                       Phase.
                      (b) Effective
                       Continuation Phase
                       Treatment.
                      Percentage of
                       patients who were
                       diagnosed with a
                       new episode of
                       depression and
                       treated with
                       antidepressant
                       medication and who
                       remained on an
                       antidepressant
                       drug for at least
                       180 days.
4...................  Follow-Up After      0576..............................  Administrative Claims.
                       Hospitalization
                       for Mental Illness.
                      Percentage of
                       discharges for
                       patients who were
                       hospitalized for
                       treatment of
                       selected mental
                       health disorders
                       and who had an
                       outpatient visit,
                       an intensive
                       outpatient
                       encounter, or
                       partial
                       hospitalization
                       with a mental
                       health
                       practitioner.
                      Two rates are
                       reported:
                      Rate 1: Percentage
                       of patients who
                       received follow-up
                       within 30 days of
                       discharge.
                      Rate 2: Percentage
                       of patients who
                       received follow-up
                       within 7 days of
                       discharge.
5...................  Osteoporosis         0053..............................  Administrative Claims.
                       management in
                       women who had a
                       fracture.
                      Percentage of women
                       67 years and older
                       who suffered a
                       fracture and who
                       had either a bone
                       mineral density
                       (BMD) test or
                       prescription for a
                       drug to treat or
                       prevent
                       osteoporosis in
                       the six months
                       after the date of
                       fracture.
6...................  Use of High-Risk     0022..............................  Administrative Claims.
                       Medications in the
                       Elderly: (a)
                       Patients Who
                       Receive At Least
                       One Drug To Be
                       Avoided.
                      Percentage of
                       patients ages 65
                       years and older
                       who received at
                       least one high-
                       risk medication in
                       the measurement
                       year.
                      (b) Patients Who
                       Receive At Least
                       Two Different
                       Drugs To Be
                       Avoided.

[[Page 42905]]

 
                      Percentage of
                       patients 65 years
                       of age and older
                       who received at
                       least two
                       different high-
                       risk medications
                       in the measurement
                       year.
7...................  Potentially Harmful  National Committee for Quality      Administrative Claims.
                       Drug-Disease         Assurance (NCQA).
                       Interactions in
                       the Elderly.
                      Percentage of
                       Medicare patients
                       65 years of age
                       and older who have
                       evidence of an
                       underlying
                       disease, condition
                       or health concern
                       and who were
                       dispensed an
                       ambulatory
                       prescription for a
                       contraindicated
                       medication,
                       concurrent with or
                       after the
                       diagnosis.
                      Report each of the
                       three rates
                       separately and as
                       a total rate:
                      Rate 1: A history
                       of falls and a
                       prescription for
                       tricyclic
                       antidepressants,
                       antipsychotics or
                       sleep agents.
                      Rate 2: Dementia
                       and a prescription
                       for tricyclic
                       antidepressants or
                       anticholinergic
                       agents.
                      Rate 3: Chronic
                       renal failure
                       (CRF) and
                       prescription for
                       nonaspirin NSAIDs
                       or Cox-2 Selective
                       NSAIDs.
                      Total rate: The sum
                       of the three
                       numerators divided
                       by the sum of the
                       three denominators.
8...................  International        0556..............................  Administrative Claims.
                       Normalized Ration
                       (INR) for
                       Beneficiaries
                       Taking Warfarin
                       and Interacting
                       Anti-Infective
                       Medications.
                      Percentage of
                       episodes with an
                       INR test performed
                       3 to 7 days after
                       a newly-started
                       interacting anti-
                       infective
                       medication for
                       Part D
                       beneficiaries
                       receiving warfarin.
9...................  Appropriate Follow-  0568..............................  Administrative Claims.
                       Up for Patients
                       with HIV.
                      Percentage of
                       patients diagnosed
                       with HIV who
                       received a CD4
                       count and an HIV
                       RNA level
                       laboratory test in
                       the 6 months
                       following
                       diagnosis.
10..................  Ischemic Vascular    0075..............................  Administrative Claims.
                       Disease (IVD):
                       Complete Lipid
                       Profile.
                      Percentage of
                       patients 18 years
                       of age and older
                       who were
                       discharged alive
                       for acute
                       myocardial
                       infarction (AMI),
                       coronary artery
                       bypass graft
                       (CABG) or
                       percutaneous
                       coronary
                       interventions
                       (PCI) from January
                       1-November 1 of
                       the year prior to
                       the measurement
                       year, or who had a
                       diagnosis of
                       ischemic vascular
                       disease (IVD)
                       during the
                       measurement year
                       and the year prior
                       to measurement
                       year, who had a
                       complete lipid
                       profile during the
                       measurement year.
11..................  Breast Cancer--      0623..............................  Administrative Claims.
                       Cancer
                       Surveillance.
                      Percentage of
                       female patients 18
                       and older with
                       breast cancer who
                       had breast cancer
                       surveillance in
                       the past 12 months.
12..................  Prostate Cancer--    0625..............................  Administrative Claims.
                       Cancer
                       Surveillance.
                      Percentage of males
                       with prostate
                       cancer that have
                       had their PSA
                       monitored in the
                       past 12 months.
13..................  Diabetes: Eye Exam.  0055..............................  Administrative Claims.
                      Percentage of adult
                       patients with
                       diabetes aged 18-
                       75 years who
                       received a dilated
                       eye exam by an
                       ophthalmologist or
                       optometrist during
                       the measurement
                       year, or had a
                       negative retinal
                       exam (no evidence
                       of retinopathy) by
                       an eye care
                       professional in
                       the year prior to
                       the measurement
                       year.
14..................  Diabetes:            0057..............................  Administrative Claims.
                       Hemoglobin A1c
                       Testing.
                      Percentage of adult
                       patients with
                       diabetes aged 18-
                       75 years receiving
                       one or more A1c
                       test(s) per year.
15..................  Diabetes: Medical    0062..............................  Administrative Claims.
                       Attention for
                       Nephropathy.
                      Percentage of adult
                       diabetes patients
                       aged 18-75 years
                       with at least one
                       test nephropathy
                       screening test
                       during the
                       measurement year
                       or who had
                       evidence existing
                       nephropathy
                       (diagnosis of
                       nephropathy or
                       documentation of
                       microalbuminuria
                       or albuminuria).
16..................  Diabetes: LDL-C      NCQA..............................  Administrative Claims.
                       Screening.
                      Percentage of adult
                       patients with
                       diabetes aged 18-
                       75 who had an LDL-
                       C test performed
                       during the
                       measurement year.
17..................  Pharmacotherapy      0549..............................  Administrative Claims.
                       Management of COPD
                       Exacerbation.
                      Percentage of
                       chronic
                       obstructive
                       pulmonary disease
                       (COPD)
                       exacerbations for
                       patients 40 years
                       of age and older
                       who had an acute
                       inpatient
                       discharge or ED
                       encounter between
                       January 1-November
                       30 of the
                       measurement year
                       and were dispensed
                       appropriate
                       medications.
                      Two rates are
                       reported:
                      Rate 1: Dispensed a
                       systemic
                       corticosteroid
                       within 14 days of
                       the event.
                      Rate 2: Dispensed a
                       bronchodilator
                       within 30 days of
                       the event.
                      Note: The eligible
                       population for
                       this measure is
                       based on acute
                       inpatient
                       discharges and
                       emergency
                       department (ED)
                       visits, not on
                       patients; it is
                       possible for the
                       denominator to
                       include multiple
                       events for the
                       same individual.

[[Page 42906]]

 
18..................  Arthritis: Disease   0054..............................  Administrative Claims.
                       Modifying
                       Antirheumatic Drug
                       (DMARD) Therapy in
                       Rheumatoid
                       Arthritis.
                      Percentage of
                       patients 18 years
                       and older,
                       diagnosed with
                       rheumatoid
                       arthritis who have
                       had at least one
                       ambulatory
                       prescription
                       dispensed for a
                       DMARD.
19..................  Coronary Artery      0543..............................  Administrative Claims.
                       Disease and
                       Medication
                       Possession Ratio
                       for Statin Therapy.
                      Medication
                       Possession Ratio
                       (MPR) for statin
                       therapy for
                       individuals over
                       18 years of age
                       with coronary
                       artery disease.
                      Rate 1: Percentage
                       of patients who
                       are prescribed
                       statin therapy in
                       the measurement
                       year.
                      Rate 2: Average
                       Medication
                       Possession Ratio
                       (MPR) of patients
                       in the measurement
                       year (MPR = the
                       days supply of
                       medication divided
                       by the number of
                       days in the
                       measurement
                       period).
                      Rate 3: The
                       percentage of
                       patients with MPR
                       >= 0.80 in the
                       measurement year.
20..................  Therapeutic          0021..............................  Administrative Claims.
                       Monitoring: Annual
                       Monitoring for
                       Patients on
                       Persistent
                       Medications.
                      Percentage of
                       patients 18 years
                       of age and older
                       who received at
                       least 180
                       treatment days of
                       ambulatory
                       medication therapy
                       for a select
                       therapeutic agent
                       during the
                       measurement year
                       and at least one
                       therapeutic
                       monitoring event
                       for the
                       therapeutic agent
                       in the measurement
                       year.
                      Report each of the
                       four rates
                       separately and as
                       a total rate:
                      Rate 1: Annual
                       monitoring for
                       patients on
                       angiotensin
                       converting enzyme
                       (ACE) inhibitors
                       or angiotensin
                       receptor blockers
                       (ARB).
                      Rate 2: Annual
                       monitoring for
                       patients on
                       digoxin.
                      Rate 3: Annual
                       monitoring for
                       patients on
                       diuretics.
                      Rate 4: Annual
                       monitoring for
                       patients on
                       anticonvulsants.
                      Total Rate: The sum
                       of the four
                       numerators divided
                       by the sum of the
                       four denominators.
21..................  Deep Vein            0581..............................  Administrative Claims.
                       Thrombosis
                       Anticoagulation At
                       Least 3 Months.
                      Percentage of
                       patients diagnosed
                       with a lower
                       extremity DVT more
                       than 3 months
                       prior to the end
                       of the measurement
                       year (who do not
                       have
                       contraindications
                       to warfarin
                       therapy and who do
                       not have an IVC
                       filter in the 90
                       days after the
                       onset of PE) who
                       had at least 3
                       months of
                       anticoagulation
                       after the event or
                       patients showing
                       compliance with
                       anticoagulation
                       therapy as
                       indicated by a
                       Home PT Monitoring
                       device or multiple
                       instances of
                       prothrombin time
                       testing over the 3-
                       month period.
22..................  Pulmonary Embolism   0593..............................  Administrative Claims.
                       Anticoagulation At
                       Least 3 Months.
                      Percentage of
                       patients diagnosed
                       with a PE more
                       than 3 months
                       prior to the end
                       of the measurement
                       year (who do not
                       have
                       contraindications
                       to warfarin
                       therapy and who do
                       not have an IVC
                       filter in the 90
                       days after the
                       onset of PE) who
                       had at least 3
                       months of
                       anticoagulation
                       after the event or
                       patients showing
                       compliance with
                       anticoagulation
                       therapy as
                       indicated by a
                       Home PT Monitoring
                       device or multiple
                       instances of
                       prothrombin time
                       testing over the 3-
                       month period.
23..................  Monthly INR          0555..............................  Administrative Claims.
                       Monitoring for
                       Beneficiaries on
                       Warfarin.
                      Average percentage
                       of 40-day
                       intervals in which
                       Part D
                       beneficiaries with
                       claims for
                       warfarin do not
                       receive an INR
                       test during the
                       measurement period.
24..................  Steroid Use--        0614..............................  Administrative Claims.
                       Osteoporosis
                       Screening.
                      Percentage of
                       patients, 18 and
                       older, who have
                       been on chronic
                       steroids for at
                       least 180 days in
                       the past 9 months
                       and who had a bone
                       density evaluation
                       or osteoporosis
                       treatment.
25..................  Appropriate Work-Up  0567..............................  Administrative Claims.
                       Prior To
                       Endometrial
                       Ablation Procedure.
                      Percentage of women
                       who had an
                       endometrial
                       ablation procedure
                       during the
                       measurement year
                       who received
                       endometrial
                       sampling or
                       hysteroscopy with
                       biopsy during the
                       previous year.
26..................  Breast Cancer        0031..............................  Administrative Claims.
                       Screening.
                      Percentage of
                       eligible women 40-
                       69 who receive a
                       mammogram in
                       during the
                       measurement year
                       or in the year
                       prior to the
                       measurement year.
27..................  Hepatitis C: Viral   0584..............................  Administrative Claims.
                       Load Test.
                      Percentage of
                       patients 18 years
                       or older with
                       Hepatitis C (HCV)
                       who began HCV
                       antiviral therapy
                       during the
                       measurement year
                       and had HCV Viral
                       Load testing prior
                       to initiation of
                       antiviral therapy.
28..................  Dyslipidemia New     0583..............................  Administrative Claims.
                       Medication 12-Week
                       Lipid Test.

[[Page 42907]]

 
                      Percentage of
                       patients age 18 or
                       older starting
                       lipid-lowering
                       medication during
                       the measurement
                       year who had a
                       lipid panel
                       checked within 3
                       months after
                       starting drug
                       therapy.
----------------------------------------------------------------------------------------------------------------
* The NQF measure number is reported unless the measure is not NQF-endorsed, in which case the measure steward
  is reported.

    The individual reports will not contain the average rate of 
preventable hospital admissions for the six ambulatory care-sensitive 
conditions identified above because these measures are not specified at 
the individual physician level at this time.
    We again plan to display resource use measures that reflect average 
per capita cost for a given physician's Medicare patients. In addition 
to comparing average per capita costs of one physician's patients to 
the average per capita costs of his/her peers' patients, the reports 
will compare total per capita costs for patients with the following 
chronic conditions: Heart failure, chronic pulmonary obstructive 
disease (COPD), diabetes, and coronary artery disease.
b. Refinement of the Physician Feedback Program in 2011: Individual 
Physicians/Medical Group Practices/Specialties
    As stated in the CY 2011 PFS proposed rule, deciding which 
physician(s) is/are responsible for the care of which beneficiaries is 
an important aspect of measurement (75 FR 40115). When attributing 
beneficiary cost information to physicians, we must balance between 
costs for delivered services that are within the physician's control 
and costs for delivered services that are not within their control. We 
recognize that attribution rules have the potential to alter incentives 
regarding how physicians coordinate and deliver care to beneficiaries 
and seek to encourage better care coordination and accountability for 
patient outcomes. In addition, determining how to make relevant 
comparisons of physicians to a standard or to their peers is also an 
important policy aspect of the Physician Feedback Program. In light of 
these issues, we are engaging in the efforts described below to help 
inform how to develop and produce this and future year's reports.
    First, we are examining alternative attribution methods that would 
allow more Medicare beneficiaries to be matched to physicians for 
purposes of assessing the quality of care furnished and the associated 
resources. We plan to explore broader attribution models than we used 
in last year's Physician Feedback reports, in which beneficiaries were 
attributed to physicians/groups based on E/M services and a minimum 
cost threshold. Cost of service rules, for example, may better apply to 
physicians who commonly furnish surgical procedures or interventions, 
especially those that are high volume and/or high cost. We anticipate 
combining this effort with work to identify quality measures 
appropriate to the practices of these specialists. We recognize that 
characteristics of physicians and the scope of their medical practices 
vary far more than those of other provider types such as hospitals, 
home health agencies, and nursing homes and, thus, we want to ensure we 
develop sound attribution rules that recognize these variations and are 
appropriate for physicians.
    We also are planning to investigate stratifying physicians by 
specialty and by the conditions they treat, which would allow both cost 
and clinical measures to reflect procedures and services that best 
portray physician practice patterns.
    Second, we intend to examine whether to provide reports to groups 
of physicians who submit Medicare claims under a single tax 
identification number (TIN) to see if we can provide feedback reports 
that cover more physicians. TIN-level reporting may prove useful in 
situations where individual physicians have too few of some types of 
patients to allow for accurate reporting of cost measures or certain 
quality measures.
    We seek comment on these and any other issues to ensure that the 
future Physician Feedback reports provide meaningful and actionable 
information.
c. Beyond 2011: Future Scale Up and Dissemination for Increased 
Physician Feedback Reporting
    In CY 2012, we expect to expand dissemination of reports to cover 
100,000 physicians nationally. In 2012, we expect to be able to 
evaluate whether leveraging the quality measures in the Physician 
Quality Reporting System will help achieve this goal. We recognize that 
our current inventory of quality measures, both claims-based and those 
used in the 2010 GPRO-1 quality measures, best covers primary care 
practitioners including family physicians, general practitioners, 
internists, geriatricians, and related medical non-procedural 
specialists. As the scope of measures, including outcomes, in the 
Physician Quality Reporting System increases and as more physicians 
report measures, we expect to be able to provide meaningful and 
actionable quality information to an increasing number of physicians. 
This increased participation will increase the breadth of Medicare 
physicians for whom Physician Feedback reports can be created.
    Second, section 1848(n)(9)(A) of the Act, as added by section 3003 
of the Affordable Care Act, requires the development, by not later than 
January 1, 2012, of a Medicare-specific episode grouper so that 
physicians can be compared on episode-based costs of care. The episode 
grouper will require further testing and refinement in order to see how 
well it integrates with other parameters, such as attribution and 
benchmarking, before it can be fully operational. The episode grouper 
is being developed to determine episode-based costs for a subset of 
selected high cost, high volume conditions for Medicare beneficiaries, 
including six of the following nine conditions: Hip fracture/hip 
replacement; pneumonia; heart attack; coronary artery disease; asthma; 
COPD; stroke; diabetes; and heart failure. Aspects of the episode 
grouper could be applied, on a limited basis, in Physician Feedback 
reports in 2012 or 2013, depending upon the testing and validation of 
the methodology. Section 1848(n)(9)(A)(iv) of the Act requires that the 
Secretary seek endorsement of the grouper by an entity with a contract 
under section 1890(a) of the Act. Plans to secure this endorsement are 
under development. We plan to make details of the Medicare grouper 
publicly available as required by section 1848(n)(9)(A)(iii)) of the 
Act.
    In addition, we will continue to monitor developments regarding the 
National Quality Forum's project regarding resource use measures. 
Learning from this project is likely to help refine the next steps 
related to the scale up of the Physician Feedback reports.

[[Page 42908]]

    Lastly, we will pursue how best to incorporate the production and 
dissemination of the feedback reports into the IT infrastructure of the 
agency. For example, in this year's reports we plan to use the Medicare 
Administrative Contractor to distribute the individual physician 
reports by e-mail. It is our intent in future years to use other 
mechanisms, such as a secure portal, for physicians to obtain and 
review their reports. It is critical for us to plan for the very 
significant, and ongoing, data and dissemination infrastructure that 
must be built for us to provide feedback reports to all physicians paid 
under the PFS.
    As the science of quality measurement improves, attribution 
methodologies mature, participation rates in our reporting programs 
increase, and our IT infrastructure evolves, we will determine how best 
to incorporate these advances into a better physician feedback program. 
Furthermore, it is our intent to engage in continued dialogue with the 
physician community about ways to improve these reports and their 
dissemination.
4. The Value-Based Payment Modifier: Section 3007 of the Affordable 
Care Act
    Section 1848(p) of the Act, as added by Section 3007 of the 
Affordable Care Act, requires the Secretary to ``establish a payment 
modifier that provides for differential payment to a physician or a 
group of physicians'' under the physician fee schedule ``based upon the 
quality of care furnished compared to cost * * * during a performance 
period.'' The provision requires that ``such payment modifier be 
separate from the geographic adjustment factors'' established for the 
physician fee schedule. We believe that this provision requires the 
Secretary to establish a differential payment under the physician fee 
schedule to reflect ``value,'' for example, the quality of care 
compared to cost, and that the value modifier is independent from the 
geographic adjustments applied under the fee schedule.
    Section 1848(p)(4)(C) of the Act requires that the value modifier 
be implemented in a budget-neutral manner. Budget neutrality means that 
payments will increase for some physicians but decrease for others, but 
the aggregate amount of Medicare spending in any given year for 
physicians' services will not change as a result of application of the 
value modifier. Over time, we expect that implementation of the value 
modifier will lead to more efficient use of services.
    Section 1848(p)(4)(A) and (B) of the Act establish the time frame 
for implementation of the value modifier. Section 1848(p)(4)(B)(iii) of 
the Act requires the Secretary to apply the value modifier beginning 
January 1, 2015 to specific physicians and groups of physicians the 
Secretary determines appropriate. This section also requires the 
Secretary to apply the value modifier with respect to all physicians 
and groups of physicians beginning not later than January 1, 2017.
    Section 1848(p)(4) of the Act requires the Secretary to take a 
series of steps, beginning not later than January 1, 2012, and leading 
up to implementation of the value modifier on January 1, 2015. Section 
1848(p)(4)(A) of the Act requires us to publish, not later than January 
1, 2012, three items related to the establishment of the value 
modifier: (a) The quality of care and cost measures established by the 
Secretary for purposes of the modifier; (b) the dates for 
implementation of the value modifier; and (c) the initial performance 
period for application of value modifier in 2015.
    Section 1848(p)(4)(B) of the Act requires the Secretary to begin 
implementing the value modifier through the physician fee schedule 
rulemaking process during 2013; this rulemaking would apply to value 
modifier payment adjustments for 2015. Section 1848(p)(4)(B) of the Act 
further requires the Secretary, to the extent practicable during the 
initial performance period, to provide information to physicians and 
physician groups about the quality of care furnished by the physician 
or group of physicians to Medicare beneficiaries compared to cost.
    The value modifier is an important component in revamping how care 
and services are paid for under the physician fee schedule. Currently, 
payments under the physician fee schedule are generally based on the 
relative resources involved with furnishing each service, and adjusted 
for differences in resource inputs among geographic areas. Thus, all 
physicians in a geographic area are paid the same amount for individual 
services regardless of the quality of care or outcomes of services they 
furnish.
    Although the fee schedule payments are or will soon be adjusted 
depending upon whether eligible professionals are satisfactory 
reporters of PQRS quality measures, successful electronic prescribers 
and meaningful users of electronic health records (EHRs),\7\ these 
adjustments do not currently take into account performance on these 
quality measures. In addition, the fee schedule does not take into 
account the overall cost of services furnished or ordered by physicians 
for individual Medicare beneficiaries. These limitations mean that the 
physician fee schedule does not contain incentives for physicians to 
focus on: (1) The relative cost or value of each service they furnish 
or order; (2) the cumulative cost of their own services and the 
services that their beneficiaries receive from other providers; or (3) 
the quality and outcomes of all the care furnished to beneficiaries.\8\
---------------------------------------------------------------------------

    \7\ See, for example, section 1848(a)(8) of the Act, as added by 
section 3002(b) of the Affordable Care Act; section 1848(a)(7)(A) of 
the Act, as added by section Sec 4101 (b) of the HITECH Act.
    \8\ Source: MedPAC, Report to the Congress: Reforming the 
Delivery System, Chapter 1 (June 2008), available at: http://www.medpac.gov/documents/Jun08_EntireReport.pdf.
---------------------------------------------------------------------------

    We note that Medicare is beginning to implement value-based payment 
adjustments for other types of services. For example, recently, we 
published a final rule to implement the hospital value-based purchasing 
program that will affect hospitals beginning with FY 2013 discharges 
(76 FR 26490). In addition, section 3006 of the Affordable Care Act 
requires us to develop a plan to implement value-based purchasing 
programs for skilled nursing facilities, home health agencies, and 
ambulatory surgical centers. We view the physician value modifier as 
the companion value-based payment mechanism for physicians.
    In implementing value-based purchasing initiatives generally, we 
seek to meet the following goals:
     Improving quality.
    ++ Value-based payment systems and public reporting should rely on 
a mix of standards, processes, outcomes, and patient experience 
measures, including measures of care transitions and changes in patient 
functional status. Across all programs, we seek to move as quickly as 
possible to the use of outcome and patient experience measures. To the 
extent practicable and appropriate, we believe these outcome and 
patient experience measures should be adjusted for risk or other 
appropriate patient population or provider characteristics.
    ++ To the extent possible, and recognizing differences in payment 
system readiness and statutory requirements and authorities, measures 
should be aligned across Medicare and Medicaid's public reporting and 
payment systems. We seek to evolve a focused core set of measures 
appropriate to each specific provider category that reflects the level 
of care and the most

[[Page 42909]]

important areas of service and measures for that provider.
    ++ The collection of information should minimize the burden on 
providers to the extent possible. As part of that effort, we will 
continuously seek to align our measures with the adoption of meaningful 
use standards for health information technology (HIT), so the 
collection of performance information is part of care delivery.
    ++ To the extent practicable, measures used by us should be 
nationally endorsed by a multi-stakeholder organization. Measures 
should be aligned with best practices among other payers and the needs 
of the end users of the measures.
     Lowering per-capita growth in expenditures.
    ++ Providers should be accountable for the cost of care, and be 
rewarded for reducing unnecessary expenditures and be responsible for 
excess expenditures.
    ++ In reducing excess expenditures, providers should continually 
improve the quality of care they deliver.
    ++ To the extent possible, and recognizing differences in payers' 
value based purchasing initiatives, providers should apply cost-
reducing and quality-improving redesigned care processes to their 
entire patient population.
    Our experience with providing physicians confidential feedback 
reports, which include various measures of cost and quality, is helping 
us to design and develop the value modifier. In addition, we seek to 
build upon best practices that have evolved in the private sector to 
provide meaningful and actionable information to physicians. For 
example, we recognize the importance of transparent methodologies and 
of procedural safeguards necessary to provide physicians with an 
opportunity to review the value modifier such as the one we will 
develop.\9\
---------------------------------------------------------------------------

    \9\ See for example Ambulatory Quality Alliance, Performance 
Measurement Workgroup materials, available at: http://www.ambulatoryqualityalliance.org/performancewg.htm; New York 
Attorney General Settlement with Excellus, available at: http://www.ag.ny.gov/bureaus/health_care/pdfs/Excellus%20Settlement.pdf.
---------------------------------------------------------------------------

    We intend to move both deliberately and carefully because we 
recognize the complexities of calculating a reliable and valid measure 
of value that compares physicians against their peers and uses the 
measure to differentiate payment. We view this rulemaking as one part 
of an ongoing and extensive dialogue with health care stakeholders on 
how best to ensure development of a fair, meaningful, and actionable 
value modifier on which to differentiate payments to physicians.
a. Measures of Quality of Care and Costs
(1) Quality of Care Measures
    Section 1848(p)(2) of the Act requires that the quality of care be 
evaluated, to the extent practicable, based on a composite of measures 
of the quality of care furnished. Section 1848(p)(2)(B) of the Act 
requires that the Secretary establish appropriate measures of the 
quality of care furnished by a physician or a group of physicians to 
Medicare beneficiaries such as measures that reflect health outcomes. 
The statute requires the measures to be risk adjusted as determined 
appropriate by the Secretary. Section 1848(p)(2)(B)(ii) of the Act 
requires the Secretary to seek endorsement of the quality of care 
measures by the entity with a contract under section 1890(a) of the 
Act, which is the National Quality Forum.
    In establishing the quality of care measures for the value 
modifier, our interest is to move toward a core set of measures so that 
we can assess and benchmark physician performance. We are interested in 
ensuring that this set of core measures includes outcome measures, 
especially for care provided by specialists. We also want to start a 
discussion of potential measures that could provide a richer picture of 
the quality of care furnished by a physician. At our September 24, 
2010, Listening Session on the Physician Feedback Program and 
Implementation of the Value-Based Payment Modifier for Fee-for-Service 
Medicare, the stakeholder community suggested the need for additional 
quality measures that focus on care coordination/care transitions, 
patient experience, and outcomes such as functional health status.\10\ 
We agree with these suggestions and believe that these measures could 
provide a richer picture of the quality of care furnished by physicians 
to Medicare beneficiaries.
---------------------------------------------------------------------------

    \10\ Listening Session Regarding: Physician Feedback Program and 
Implementation of the Value-Based Payment Modifier for Fee-for-
Service Medicare (Sept. 24, 2010) (see, for example, comments of 
Pacific Business Group on Health, Consumer Purchaser Disclosure 
Project), transcript available at: https://www.cms.gov/PhysicianFeedbackProgram/Downloads/092410_Listening_Session_Feedback_Program_Transcript.pdf.
---------------------------------------------------------------------------

    We view the requirement for the Secretary to establish, by January 
1, 2012, the quality measures for the value modifier to be the first 
step in identifying a robust core set of measures of the quality of 
care furnished by physicians for use in the value modifier. We envision 
incorporating additional quality measures into the value modifier over 
time.
(A) Proposed Quality of Care Measures for the Value-Modifier
    For purposes of section 1848(p)(4)(A)(i) of the Act, we propose to 
use performance on: (1) The measures in the core set of the Physician 
Quality Reporting System for 2012; (2) all measures in the GPRO of the 
Physician Quality Reporting System for 2012; and (3) the core measures, 
alternate core, and 38 additional measures in the Electronic Health 
Record Incentive Program measures for 2012. Table 62 lists these 
measures. We recognize that there are measures common to these two 
programs because they are derived from the proposed 2012 Physician 
Quality Reporting System and may be available for reporting in other 
CMS programs, such as the Medicare and Medicaid EHR Incentive Program 
as well as the Medicare Shared Savings Program. We note that measure 
titles, in some instances, may vary from program to program. Once these 
measures are finalized, we will identify the measures more fully to 
eliminate any duplication.

                           Table 62--Proposed Quality Measures for the Value Modifier
----------------------------------------------------------------------------------------------------------------
                                                                                       EHR
 Physician quality reporting      Measure title     NQF Measure      Measure        Incentive     PQRS     PQRS
         system No.                                     No.         developer        program      GPRO     Core
----------------------------------------------------------------------------------------------------------------
110.........................  Preventative Care            0041  AMA-PCPI.......            X        X
                               and Screening:
                               Influenza
                               Immunization for
                               Patients >= 50
                               Years Old.
111.........................  Preventive Care and          0043  NCQA...........            X        X
                               Screening:
                               Pneumonia
                               Vaccination for
                               Patients 65 Years
                               and Older.
112.........................  Preventive Care and          0031  NCQA...........            X        X
                               Screening:
                               Screening
                               Mammography.

[[Page 42910]]

 
113.........................  Preventive Care and          0034  NCQA...........            X        X
                               Screening:
                               Colorectal Cancer
                               Screening.
128.........................  Preventive Care and          0421  CMS-QIP........            X
                               Screening: Body
                               Mass Index (BMI)
                               Screening and
                               Follow[dash]up.
TBD.........................  Preventive Care:              N/A  CMS............                              X
                               Cholesterol[dash]LD
                               L test performed.
TBD.........................  Falls: Screening for          101  NCQA...........                     X
                               Falls Risk.
TBD.........................  Cervical Cancer              0032  NCQA...........            X
                               Screening.
226.........................  Preventive Care and          0028  AMA-PCPI.......            X        X        X
                               Screening: Tobacco
                               Use: Screening and
                               Cessation
                               Intervention.
235.........................  Hypertension (HTN):          0017  AMA-PCPI.......                     X
                               Plan of Care.
236.........................  Controlling High             0018  NCQA...........            X        X        X
                               Blood Pressure.
237.........................  Hypertension (HTN):          0013  AMA-PCPI.......            X        X
                               Blood Pressure
                               Measurement.
TBD.........................  Proportion of adults          N/A  CMS............                     X        X
                               18 years and older
                               who have had their
                               BP measured within
                               the preceding 2
                               years.
6...........................  Coronary Artery              0067  AMA-PCPI.......            X        X
                               Disease (CAD): Oral
                               Antiplatelet
                               Therapy Prescribed
                               for Patients with
                               CAD.
7...........................  Coronary Artery              0070  AMA-PCPI.......            X        X
                               Disease (CAD): Beta-
                               Blocker Therapy for
                               CAD Patients with
                               Prior Myocardial
                               Infarction (MI).
118.........................  Coronary Artery              0066  AMA-PCPI.......                     X
                               Disease (CAD):
                               Angiotensin-
                               Converting Enzyme
                               (ACE) Inhibitor or
                               Angiotensin
                               Receptor Blocker
                               (ARB) Therapy for
                               Patients with CAD
                               and Diabetes and/or
                               Left Ventricular
                               Systolic
                               Dysfunction (LVSD).
TBD.........................  Coronary Artery                NA  CMS............                     X
                               Disease (CAD): LDL
                               <100 mg/dl.
197.........................  Coronary Artery              0074  AMA-PCPI.......            X        X
                               Disease (CAD):
                               Lipid Control.
201.........................  Ischemic Vascular            0073  NCQA...........            X        X
                               Disease (IVD):
                               Blood Pressure
                               Management Control.
204.........................  Ischemic Vascular            0068  NCQA...........            X        X        X
                               Disease (IVD): Use
                               of Aspirin or
                               another
                               Antithrombotic.
TBD.........................  Ischemic Vascular            0075  NCQA...........            x        X        X
                               Disease (IVD):
                               Complete Lipid
                               Profile and LDL
                               Control < 100 mg/dl.
5...........................  Heart Failure:               0081  AMA-PCPI.......            X        X
                               Angiotensin-
                               Converting Enzyme
                               (ACE) Inhibitor or
                               Angiotensin
                               Receptor Blocker
                               (ARB) Therapy for
                               Left Ventricular
                               Systolic
                               Dysfunction (LVSD).
8...........................  Heart Failure: Beta-         0083  AMA-PCPI.......            X        X
                               Blocker Therapy for
                               Left Ventricular
                               Systolic
                               Dysfunction (LVSD).
228.........................  Heart Failure: Left           N/A  CMS............                     X
                               Ventricular
                               Function (LVF)
                               Testing.
198.........................  Heart Failure: Left          0079  AMA-PCPI.......                     X
                               Ventricular
                               Function (LVF)
                               Assessment.
227.........................  Heart Failure:               0085  AMA-PCPI.......                     X
                               Weight Measurement.
199.........................  Heart Failure:               0082  AMA-PCPI.......                     X
                               Patient Education.
200.........................  Heart Failure:               0084  AMA-PCPI.......            X        X
                               Warfarin Therapy
                               for Patients with
                               Atrial Fibrillation.
TBD.........................  Monthly INR for               555  CMS............                     X
                               Beneficiaries on
                               Warfarin.
1...........................  Diabetes Mellitus:           0059  AMA-PCPI.......            X        X
                               Hemoglobin A1c Poor
                               Control in Diabetes
                               Mellitus.
TBD.........................  Diabetes: Aspirin            0729  MN Community                        X
                               Use.                               Measurement.
3...........................  Diabetes Mellitus:           0061  NCQA...........            X        X
                               High Blood Pressure
                               Control in Diabetes
                               Mellitus.
TBD.........................  Diabetes: Hemoglobin          575  NCQA...........            X        X
                               A 1 c Control (<
                               8.0%).
2...........................  Diabetes Mellitus:           0064  NCQA...........            X        X        X
                               Low Density
                               Lipoprotein (LDL-C)
                               Control in Diabetes
                               Mellitus.
117.........................  Diabetes Mellitus:           0055  NCQA...........            X        X
                               Dilated Eye Exam in
                               Diabetic Patient.
18..........................  Diabetic                     0088  AMA-PCPI.......            X
                               Retinopathy:
                               Documentation of
                               Presence or Absence
                               of Macular Edema
                               and Level of
                               Severity of
                               Retinopathy.
TBD.........................  Diabetic                     0089  AMA-PCPI.......            X
                               Retinopathy:
                               Communication with
                               the Physician
                               Managing Ongoing
                               Diabetes Care.

[[Page 42911]]

 
119.........................  Diabetes Mellitus:           0062  NCQA...........            X        X
                               Urine Screening for
                               Microalbumin or
                               Medical Attention
                               for Nephropathy in
                               Diabetic Patients.
163.........................  Diabetes Mellitus:           0056  NCQA...........            X        X
                               Foot Exam.
TBD.........................  Diabetes Mellitus:           0729  MN Community                        X
                               Tobacco Non-Use.                   Measurement.
239.........................  Weight Assessment            0024  NCQA...........            X
                               and Counseling for
                               Children and
                               Adolescents.
240.........................  Childhood                    0038  NCQA...........            X
                               Immunization Status.
TBD.........................  Appropriate Testing          0002  NCQA...........            X
                               for Children with
                               Pharyngitis.
TBD.........................  Prenatal Care:               0012  AMA-PCPI.......            X
                               Screening for Human
                               Immunodeficiency
                               Virus (HIV).
TBD.........................  Prenatal Care: Anti-         0014  AMA-PCPI.......            X
                               D Immune Globulin.
53..........................  Asthma Pharmacologic         0047  AMA-PCPI.......            X
                               Therapy.
64..........................  Asthma Assessment...         0001  AMA-PCPI.......            X
TBD.........................  Use of Appropriate           0036  NCQA...........            X
                               Medications for
                               Asthma.
51..........................  Chronic Obstructive          0091  NCQA...........                     X
                               Pulmonary Disease
                               (COPD): Spirometry
                               Evaluation.
52..........................  Chronic Obstructive          0102  AMA-PCPI.......                     X
                               Pulmonary Disease
                               (COPD):
                               Bronchodilator
                               Therapy.
TBD.........................  Chronic Obstructive           N/A  CMS............                     X
                               Pulmonary Disease
                               (COPD): Smoking
                               Cessation
                               Counseling Received.
71..........................  Oncology Breast              0387  AMA-PCPI.......            X
                               Cancer: Hormonal
                               Therapy for Stage
                               IC-IIIC Estrogen
                               Receptor/
                               Progesterone
                               Receptor (ER/PR)
                               Positive Breast
                               Cancer.
72..........................  Oncology Colon               0385  AMA-PCPI.......            X
                               Cancer:
                               Chemotherapy for
                               Stage III Colon
                               Cancer Patients.
102.........................  Prostate Cancer:             0389  AMA-PCPI.......            X
                               Avoidance of
                               Overuse of Bone
                               Scan for Staging
                               Low Risk Prostate
                               Cancer Patients.
9...........................  Anti-depressant              0105  NCQA...........            X
                               Medication
                               Management:.
                              (a) Effective Acute
                               Phase Treatment,
                               (b) Effective
                               Continuation Phase
                               Treatment.
TBD.........................  Initiation and               0004  NCQA...........            X
                               Engagement of
                               Alcohol and Other
                               Drug Dependence
                               Treatment: (a)
                               Initiation, (b)
                               Engagement.
40..........................  Osteoporosis:                0045  NCQA...........                     X
                               Management
                               Following Fracture
                               of Hip, Spine or
                               Distal Radius for
                               Men and Women Aged
                               50 Years and Older.
TBD.........................  Low Back Pain: Use           0052  NCQA...........            X
                               of Imaging Studies.
TBD.........................  Chlamydia Screening          0033  NCQA...........            X
                               for Women.
12..........................  Primary Open Angle           0086  AMA-PCPI.......            X
                               Glaucoma (POAG):
                               Optic Nerve
                               Evaluation.
46..........................  Medication                   0097  AMA-PCPI.......                     X
                               Reconciliation:
                               Reconciliation
                               After Discharge
                               from an Inpatient
                               Facility.
TBD.........................  30-Day Post                   N/A  Colorado                            X
                               Discharge Physician                Foundation for
                               Visit.                             Medical Care.
----------------------------------------------------------------------------------------------------------------

    We seek comment on whether to include additional measures from the 
Physician Quality Reporting System (which are described elsewhere in 
this proposed rule) in the measures that we propose for the value 
modifier. We also seek comment on whether there are any measures 
included here that should be excluded from the value modifier, and on 
the appropriate number of measures for inclusion.
    To the extent that the 2013 measures adopted for the Physician 
Quality Reporting System and Electronic Health Record Incentive Program 
are different than those used in 2012, we would consider, through 
rulemaking next year, revising the value modifier quality measures 
applicable to 2013 to be consistent with the revisions made to the 
measures for those programs. Indeed, Section 1848(p)(9) of the Act 
directs us to coordinate the value modifier quality measures with the 
Physician Feedback Program, and, as the Secretary determines 
appropriate, other similar provisions of Title XVIII of the Social 
Security Act. We plan to coordinate the value modifier with the 
Physician Feedback Program, the Physician Quality Reporting System, and 
the EHR incentive program. We seek comment on the proposed measures and 
on our interest to establish a core measure set for the value modifier.
(B) Potential Quality of Care Measures for Additional Dimensions of 
Care in the Value Modifier
    As described previously, one of our goals is to start a discussion 
about potential measures that could provide a richer picture of the 
quality of care furnished by a physician. For example, we are very 
interested in quality measures that assess the care provided by 
specialists. We specifically seek

[[Page 42912]]

comment from specialists about measures that are not included in the 
list of proposed measures.
    We also seek comment on the types of measures identified below as 
well as the 28 administrative claims measures (described above with 
respect to the 2011 Physician Feedback reports) and whether we should 
include them in the value modifier. We especially urge the physician 
community and private payers that have been engaged in pay-for-
performance programs to identify other quality measures that they have 
used and to describe their experience with these measures. We seek 
comment on how the measures discussed below align with current private 
sector quality measurement initiatives. To the extent that such 
measures are not currently developed, we would use the established 
agency procedures to develop such measures.
(i) Outcome Measures
    We are very interested in moving toward a core quality of care 
measure set for the value modifier that includes outcome measures. For 
example, the Physician Feedback reports already display the rate of 
potentially preventable hospital admissions for six ambulatory care 
sensitive conditions at the practice group level: Diabetes, bacterial 
pneumonia, dehydration, chronic obstructive pulmonary disease (COPD), 
urinary tract infection, and congestive heart failure. These measures 
have been developed by the Agency for Healthcare Research and Quality 
and specifications for these measures can be found at http://www.qualityindicators.ahrq.gov/modules/PQI_TechSpec.aspx. We also are 
developing an all-cause hospital readmission measure for potential use 
in the Shared Savings Program, and section 1886(q)(8) of the Act 
requires us to develop an all-patient hospital readmission measure. We 
are considering use of these measures for physicians and physician 
groups. Our goal is to focus on outcomes of care for which it would be 
appropriate to assess physician performance. We seek comments about 
these potential measures for physicians. Although we are not proposing 
these measures at this time, we are soliciting comment and will 
consider including these outcome measures in the value modifier.
    We also specifically seek suggestions about other outcome measures 
that would be appropriate measures of the quality of care furnished for 
purposes of the value modifier. For example, section 931 of the Public 
Health Service Act, as added by section 3013(a) and amended by section 
10303 of the Affordable Care Act, also requires the Secretary to 
develop and periodically update provider-level outcome measures for 
physicians, among other types of providers. We also could consider 
development of measures that examine emergency room use for ambulatory 
care sensitive conditions. We are interested in outcome measures that 
can be calculated from existing Medicare claims data and do not require 
reporting by physicians. In addition, we are particularly interested in 
comments on potential measures of complications that would be 
appropriate to include in the value modifier.
(ii) Care Coordination/Transition Measures
    We believe that care transitions such as transition of a 
beneficiary from an inpatient setting to the community or to a post-
acute setting are important aspects of quality of care furnished. 
Successful transitions help ensure that a beneficiary is on a path to 
improvement and could avoid readmission. We believe that several 
aspects of the care transition could be developed into quality of care 
measures for purposes of the value modifier. For example, we could 
potentially consider developing a measure that would assess whether an 
appointment was set up or whether the hospitalized beneficiary saw a 
physician during a specified post-discharge period. This measure could 
apply to both the hospital physician and the community physician. In 
addition, beneficiaries often have unscheduled admissions (such as, via 
an emergency room) of which their primary physician is not made aware. 
We are considering including a care transition/care coordination 
measure that would involve a hospital physician checking to see if the 
hospital has notified the beneficiary's primary physician of an 
unscheduled admission (if the hospital and community physician were not 
the same).
    Another aspect of care coordination could involve services that are 
ordered by one physician but furnished by another physician. Under this 
scenario, the treating physician may send a report back to the ordering 
physician. However, this is not always the case. The lack of 
coordination between two physicians involved in the beneficiary's care 
could be a missed opportunity to provide optimal, seamless care for the 
beneficiary. A care coordination measure could potentially assess the 
extent to which the report is sent back to the ordering physician and 
whether the furnishing physician has confirmation that the report was 
actually received.
    We seek input about these and other potential aspects of care 
coordination/transitions for which measures could be developed and/or 
used for purposes of the value modifier. To the extent commenters are 
aware of potential measures that address care coordination/transitions 
that we could use, we welcome such suggestions. We would propose the 
specific measures through notice and comment rulemaking before 
including them as measures of the quality of care furnished for 
purposes of the value modifier.
(iii) Patient Safety, Patient Experience and Functional Status:
    We believe that it is important to develop measures of patient 
safety, patient experience and functional status for purposes of the 
value modifier. A potential patient safety measure might involve use of 
a surgical checklist. We seek comment about such a measure and other 
potential patient safety measures that could be developed and/or used 
for purposes of the value modifier. To the extent commenters are aware 
of potential measures of patient safety, patient experience, or 
functional status that we could use, we welcome such suggestions. We 
would propose the specific measures through notice and comment 
rulemaking before including them as measures of the quality of care 
furnished for purposes of the value modifier.
(2) Cost Measures
    Section 1848(p)(3) of the Act requires that cost measures used in 
the value modifier be evaluated, to the extent practicable, based on a 
composite of appropriate measures of costs established by the 
Secretary. This composite would eliminate the effect of geographic 
adjustments in payment rates and account for risk factors and other 
factors determined appropriate by the Secretary. In our Physician 
Feedback reports, we currently use a total per capita cost measure and 
per capita cost measures for the overall costs for beneficiaries with 
four chronic conditions: Chronic obstructive pulmonary disease; heart 
failure; coronary artery disease; and diabetes. These per capita cost 
measures are price standardized and risk adjusted to ensure geographic 
and clinical comparability, as required by section 1848(p)(3) of the 
Act. These measures are described in more detail in the Detailed 
Methodology Specification document accompanying the 2010 Physician 
Feedback reports.\11\
---------------------------------------------------------------------------

    \11\ The Detailed Methodology Specifications are available at: 
https://www.cms.gov/PhysicianFeedbackProgram/Downloads/2010_QRUR_ 
Detailed_Methodology.pdf.

---------------------------------------------------------------------------

[[Page 42913]]

(A) Proposed Cost Measures for the Value Modifier
    For purposes of section 1848(p)(4)(A)(i) of the Act, we propose to 
use total per capita cost measures and per capita cost measures for 
beneficiaries with these four chronic conditions (chronic obstructive 
pulmonary disease; heart failure; coronary artery disease; and 
diabetes) in the value modifier. These cost measures would be compared 
to the quality of care furnished for use in determining the value 
modifier. We seek comment on this proposal.
(B) Potential Cost Measures for Future Use in the Value Modifier
    During 2012 we will test and plan how to use an ``episode 
grouper.'' The purpose of the episode grouper is to combine separate, 
but clinically related items and services into an episode of care for a 
beneficiary. Section 1848(n)(9)(A) of the Act requires us to develop an 
episode grouper so that physicians can be compared on episode-based 
costs of care. In order to comply with this statutory requirement, we 
have awarded separate contracts to four different project teams. We 
have tasked each project team to design a ``prototype'' of the episode 
grouper by determining episode-based costs for selected high-cost, 
high-volume conditions that occur among Medicare beneficiaries, 
including six of the following nine conditions: Hip fracture/hip 
replacement; pneumonia; heart attack; coronary artery disease; asthma; 
COPD; stroke; diabetes; and heart failure. By January 1, 2012, we will 
select one project team's prototype. The selected team will then be 
tasked to develop episode groupers for a more comprehensive set of 
conditions over a four-year period.
    As a transition to implementing the episode grouper, we could use 
cost measures based on the inpatient hospital Medicare Severity 
Diagnosis Related Groups (MS-DRG) classification system. Specifically, 
we could use allowed Parts A and B charges per beneficiary for all 
services furnished on the day of admission and furnished through a 
specific number of days after the day of discharge. We are currently 
assessing how to attribute episode costs to physicians. We seek comment 
on whether we should pursue the MS-DRG approach in the near term while 
we develop episode-based cost measures for a significant number of 
high-cost and high-volume conditions in the Medicare program.
    In addition, we specifically seek comment on the resource and cost 
measures used in private sector initiatives and how they are used to 
profile physicians compared to the quality of care provided.
b. Assessing Physician Performance and Applying the Value Modifier
    Apart from the measures that would be used for purposes of applying 
the value modifier, there are a number of issues related to the 
implementation of the value modifier including steps for both 
measurement of performance and application of payment adjustments. 
While we are not making proposals on these issues at this time, we have 
briefly described them below and welcome public comments to be 
considered as we develop proposals on the value modifier for future 
rulemaking.
    Pursuant to statutory requirements, we are examining how to create 
composites of measures of quality of care and of cost from the measures 
we have proposed so that we can compare quality relative to cost. We 
are also examining how to make appropriate risk and other adjustments 
to these measures. In addition, we are examining how to attribute 
beneficiaries to physicians to develop meaningful and actionable 
physician profiles for use in the value modifier. Some of the issues 
involved with examining attribution rules were discussed earlier in the 
discussion of Physician Feedback reports and include issues of sample 
size. We are also developing appropriate peer groups or benchmarks in 
order to compare physicians on the value modifier.
    As previously mentioned, prior to application of the value modifier 
to all physicians and physician groups in 2017, section 
1848(p)(4)(B)(iii) of the Act allows the Secretary in 2015 and 2016 to 
apply the value modifier to specific physicians and physician groups 
the Secretary determines appropriate. For example, we could apply the 
value modifier to physicians who are outliers (as identified 
individually, by practice group, or by geographic region) compared to 
national or regional areas in terms of high cost and low quality. 
Alternatively, we could apply the modifier to physicians who treat the 
conditions that are most prevalent and/or most costly, among Medicare 
beneficiaries.
    As stated previously, we seek comment on these issues and other 
issues related to implementation of the value modifier. Our plan is to 
begin implementing the value modifier through the rulemaking process 
during 2013 as required by section 1848(p)(4)(B)(i) of the Act. We seek 
input from stakeholders as we work on these issues.
c. Dates for Implementation of the Value Modifier
    Section 1848(p)(4)(B)(iii) of the Act requires that the Secretary 
apply the value modifier for items and services furnished beginning on 
January 1, 2015, with respect to specific physicians and groups of 
physicians, and not later than January 1, 2017, with respect to all 
physicians and groups of physicians. As required by section 
1848(p)(4)(B)(i) of the Act, we will begin implementation of the value 
modifier through the rulemaking process during 2013 for the physician 
fee schedule effective for CY 2014. We anticipate that the methodology 
we propose to calculate the value modifier may be further refined, if 
necessary, during the 2014 rulemaking process for the physician fee 
schedule that will take effect in 2015.
d. Initial Performance Period
    Section 1848(p)(4)(B)(ii)(I) of the Act requires the Secretary to 
specify an initial performance period for the application of the value 
modifier with respect to 2015. We propose that the initial performance 
period be the full calendar year 2013, that is, January 1, 2013 through 
December 31, 2013. The value modifier that is applied to items and 
services furnished by specific physicians and groups of physicians 
under the 2015 physician fee schedule would be based on performance 
during 2013. We propose this performance period because some claims for 
2013 (which could be used in cost or quality measures) may not be fully 
processed until 2014. As such, we will need adequate lead time to 
collect performance data, assess performance, and construct and compute 
the value modifier during 2014 so that it can be applied to specific 
physicians starting January 1, 2015, as required by statute. As we have 
done in other payment systems, we plan to use claims that are paid 
within a specified time period, such as, 90-days after 2013, for 
assessment of performance and application of the value modifier for 
2015. We will propose the specific cut-off period as part of the more 
detailed methodology for computation and application of the value 
modifier in future rulemakings. We seek comment on this proposed 
performance period.
e. Other Issues
    We also seek comment on a number of issues related to the 
development of the value modifier, which we will address in future 
rulemaking. Although we are not proposing particular policies

[[Page 42914]]

at this time, we seek comment on two specific issues.
(1) Systems-Based Care
    Section 1848(p)(5) of the Act requires the Secretary, as 
appropriate, to apply the value-based modifier in a manner that 
promotes systems-based care. We seek comment on how we might determine 
the scope of systems-based care and how best to promote it in applying 
the value modifier. For example, systems-based care might include an 
integrated group practice participation in the Shared Savings Program, 
a medical home, or an Innovation Center program that promotes systems-
based care. We also could implement an attribution method that 
attributes patients to a collection of physicians that treat patients 
in common to encourage better coordination of care. Additionally, we 
could promote systems-based care by developing a common set of quality 
measures on which all providers would be evaluated. We seek comment on 
these and other ways in which we could promote systems-based care 
through the application of the value modifier.
(2) Special Circumstances for Physicians in Rural Areas and Other 
Underserved Communities
    Section 1848(p)(6) of the Act requires the Secretary in applying 
the value modifier, as appropriate, to take into account the special 
circumstances of physicians or groups of physicians in rural areas and 
other underserved communities. We seek comment on how we should 
identify physicians or groups of physicians in rural areas and other 
underserved communities, the specific special circumstances they face, 
and once identified, how these special circumstances should be taken 
into account for purposes of applying the value modifier. In addition, 
we seek comment on the organizational structures and practices that 
rural physicians and other underserved communities use and how we could 
apply a value modifier in these areas to accommodate their special 
circumstances.

J. Bundling of Payments for Services Provided to Outpatients Who Later 
Are Admitted as Inpatients: 3-Day Payment Window Policy and the Impact 
on Wholly Owned or Wholly Operated Physician Practices

1. Introduction
    On June 25, 2010, the Preservation of Access to Care for Medicare 
Beneficiaries and Pension Relief Act of 2010 (PACMBPRA) (Pub. L. 111-
192) was enacted. Section 102 of this Act entitled, ``Clarification of 
3-Day Payment Window,'' clarified when certain services furnished to 
Medicare beneficiaries in the 3-days (or, in the case of a hospital 
that is not a subsection (d) hospital, during the 1-day) preceding an 
inpatient admission should be considered ``operating costs of inpatient 
hospital services'' and therefore included in the hospital's payment 
under the Hospital Inpatient Prospective Payment System (IPPS). This 
policy is generally known as the ``3-day payment window.'' Under the 3-
day payment window, a hospital (or an entity that is wholly owned or 
wholly operated by the hospital) must include on the claim for a 
Medicare beneficiary's inpatient stay, the technical portion of any 
outpatient diagnostic services and admission-related nondiagnostic 
services provided during the payment window. The new law makes the 
policy pertaining to admission-related nondiagnostic services more 
consistent with common hospital billing practices. Section 102 of the 
PACMBPRA is effective for services furnished on or after June 25, 2010.
2. Background
    We discussed changes to the 3-day payment window in the interim 
final rule with comment period that was issued as part of last year's 
IPPS final rule (75 FR 50346). The law makes no changes to the billing 
of ``diagnostic services'' furnished during the 3-day payment window, 
which are included in the ``operating costs of inpatient hospital 
services'' pursuant to section 1886(a)(4) of the Act. All diagnostic 
services furnished to a Medicare beneficiary by a hospital (or an 
entity wholly owned or wholly operated by the hospital), on the date of 
a beneficiary's admission or during the 3-days (1-day for a non-
subsection (d) hospital) immediately preceding the date of a 
beneficiary's inpatient hospital admission, continue to be included on 
the Part A bill for the beneficiary's inpatient stay at the hospital. 
In accordance with section 102(a)(1) of the PACMBPRA, for outpatient 
services furnished on or after June 25, 2010, all nondiagnostic 
services, other than ambulance and maintenance renal dialysis services, 
provided by the hospital (or an entity wholly owned or wholly operated 
by the hospital) on the date of a beneficiary's inpatient admission and 
during the 3 calendar days (1 calendar day for a nonsubsection (d) 
hospital) immediately preceding the date of admission are deemed 
related to the admission and, therefore, must be billed with the 
inpatient stay, unless the hospital attests that certain nondiagnostic 
services are unrelated to the hospital claim (that is, the preadmission 
nondiagnostic services are clinically distinct or independent from the 
reason for the beneficiary's inpatient admission). In such cases, the 
unrelated outpatient hospital nondiagnostic services are covered by 
Medicare Part B, and the hospital may separately bill for those 
services.
    Prior to the enactment of section 102 of the PACMBPRA clarifying 
the 3-Day Payment Window, the term ``related to the admission'' was 
defined in section 40.3, Chapter 3, Inpatient Hospital Billing, of the 
Medicare Claims Processing Manual (Pub. 100-04) to mean an exact match 
between the principal ICD-9 CM diagnosis codes for the outpatient 
encounter and the inpatient admission. On November 5, 1990, section 
4003(a) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-
508) amended the statutory definition of ``operating cost of inpatient 
hospital services'' to include the costs of certain services furnished 
prior to admission. Section 4003(a) also required that these 
preadmission services be included on the Medicare Part A bill for the 
subsequent inpatient stay. With this amendment, section 1886(a)(4) of 
the Act defines the operating costs of inpatient hospital services to 
include diagnostic services (including clinical diagnostic laboratory 
tests) or other services related to the admission (as defined by the 
Secretary) furnished by the hospital (or by an entity that is wholly 
owned or wholly operated by the hospital) to the patient during the 3-
days prior to the date of the patient's admission to the hospital.
    Section 1886(a)(4) of the Act was further amended by section 110 of 
the Social Security Amendments of 1994 (Pub. L. 103-432) enacted on 
October 31, 1994. This provision revised the payment window for 
hospitals that are excluded from the IPPS to include only those 
services furnished by the hospital or an entity wholly owned or wholly 
operated by the hospital during the 1-day (instead of the previous 3-
days) prior to the patient's hospital inpatient admission. The hospital 
and hospital units excluded from the IPPS and affected by this policy 
are psychiatric hospitals and units, inpatient rehabilitation hospitals 
and units, long-term care hospitals, children's hospitals, and cancer 
hospitals. In the FY 1996 IPPS final rule (60 FR 45840), we noted that 
the term ``day'' refers to the entire calendar-day immediately 
preceding the date of admission and not the 24-hour time period that 
immediately precedes the hour of admission.

[[Page 42915]]

    On February 11, 1998, we published a final rule (63 FR 6864), that 
responded to public comments received on a prior interim final rule on 
this policy. In that final rule, we confirmed that ambulance services 
and chronic maintenance of renal dialysis services are excluded from 
the 3-day payment window. This final rule also clarified that the 
payment window applies to outpatient services that are otherwise 
billable under Part B and does not apply to nonhospital services that 
are generally covered under Part A (such as home health, skilled 
nursing facility, and hospice). In addition, the rule clarified the 
terms ``wholly owned or operated'' and ``admission-related'' for 
nondiagnostic services.
    The 1998 final rule (63 FR 6866) defined an entity as wholly owned 
or wholly operated if a hospital has direct ownership or control over 
another entity's operations. Specifically, 42 CFR 412.2(c)(5)(i) 
states, ``An entity is wholly owned by the hospital if the hospital is 
the sole owner of the entity. An entity is wholly operated by a 
hospital if the hospital has exclusive responsibility for conducting 
and overseeing the entity's routine operations, regardless of whether 
the hospital also has policymaking authority over the entity.'' The 
1998 final rule also stated ``that we have defined services as being 
related to the admission only when there is an exact match between the 
ICD-9-CM diagnosis code assigned for both the preadmission services and 
the inpatient stay.'' The rule also stated ``A hospital-owned or 
hospital-operated physician clinic or practice is subject to the 
payment window provision.'' Therefore, related preadmission 
nondiagnostic services provided by a wholly owned or wholly operated 
physician clinic or practice are also included in the 3-Day (or 1-day) 
payment window policy, and services were considered related when there 
was an exact match between ICD-9 CM diagnosis codes for the outpatient 
encounter and the inpatient admission.
    Prior to the June 25, 2010 enactment of section 102(a)(1) of 
PACMBPRA (Pub. L. 111-192), the payment window policy for preadmission 
nondiagnostic services was rarely applied in the wholly-owned or 
operated physician's office or clinic because, as noted, the policy 
required an exact match between the principal ICD-9 CM diagnosis codes 
for the outpatient services and the inpatient admission. Because of the 
exact match policy, very few services furnished in a physician's office 
or clinic that is wholly owned or operated by the hospital would be 
subject to the policy. Because the policy applied only in such narrow 
circumstances, until the recent statutory change, we have not provided 
further guidance to wholly owned or wholly operated physician offices 
on how nondiagnostic services are to be included on hospital bills when 
the 3-day payment window applied. However, the statutory change to the 
payment window policy made by Public Law 111-192 significantly 
broadened the definition of nondiagnostic services that are subject to 
the payment window to include any nondiagnostic service that is 
clinically related to the reason for a patient's inpatient admission, 
regardless of whether the inpatient and outpatient diagnoses are the 
same.
    The FY 2012 IPPS proposed rule (76 FR 25960) further discusses 
application of the 3-day payment window for both preadmission 
diagnostic and related nondiagnostic services furnished to a patient at 
wholly owned or wholly operated physician practices after June 25, 
2010. We do not know how many physician offices will meet this 
definition of wholly owned or wholly operated. Our expectation is that 
most hospital-owned entities providing outpatient services would be 
considered part of the hospital, likely as an outpatient department, 
and not separate physician clinics or practices. However, we believe 
there may be at least some hospital-owned clinics that meet the 
definition of a wholly owned or wholly operated physician practice. 
When a physician furnishes a service in a hospital, including an 
outpatient department of a hospital, Medicare pays the physician under 
the physician fee schedule, generally at a facility-based payment rate 
that is lower than the ``nonfacility'' payment rate in order to avoid 
duplication of payment for supplies, equipment, and staff that are paid 
directly to the hospital by Medicare.
3. Applicability of the 3-Day Payment Window Policy for Services 
Furnished in Physician Practices
    In circumstances where the 3-day payment window applies to 
nondiagnostic services related to an inpatient admission furnished in a 
wholly owned or wholly operated physician practice, we propose that 
Medicare would make payment under the physician fee schedule for the 
physicians' services that are subject to the 3-day payment window at 
the facility rate. As explained more fully later in this section, the 
services that are subject to the 3-day payment window would be billed 
to Medicare similar to services that are furnished in a hospital, 
including an outpatient department of a hospital. On or after January 
1, 2012, we propose that when a physician furnishes services to a 
beneficiary in a hospital's wholly owned or wholly operated physician 
practice and the beneficiary is admitted as an inpatient within 3 days 
(or, in the case of non-IPPS hospitals, 1 day), the payment window will 
apply to all diagnostic services furnished and to any nondiagnostic 
services that are clinically related to the reason for the patient's 
inpatient admission regardless of whether the reported inpatient and 
outpatient ICD-9-CM diagnosis codes are the same.
a. Payment Methodology
    Specifically, we would establish a new Medicare HCPCS modifier that 
will signal claims processing systems to provide payment at the 
facility rate. We propose to pay only the Professional Component (PC) 
for CPT/HCPCS codes with a Technical Component (TC)/PC split that are 
provided in the 3-day (or, in the case of non-IPPS hospitals, 1-day) 
payment window in a hospital's wholly owned or wholly operated 
physician practice. We propose to pay the facility rate for codes 
without a TC/PC split to avoid duplicate payment for the technical 
resources required to provide the services as those costs will be 
included on the hospital's inpatient claim for the related inpatient 
admission. The facility rate includes physician work, malpractice, and 
the facility practice expense, which is a payment to support services 
provided by the physician office when a physician treats patients at 
another facility, such as updating medical records. We propose to 
modify our regulation at Sec.  414.22(b)(5)(i), which defines the sites 
of service that result in a facility practice expense RVU for payment, 
to add an entity that is wholly owned or wholly operated by a hospital, 
as defined in Sec.  412.2(c)(5)(ii) when that entity furnishes 
preadmission services.
    If this proposal is finalized, we would establish a new HCPCS 
modifier through sub-regulatory guidance. We would require that this 
modifier be appended to the physician preadmission diagnostic and 
admission-related nondiagnostic services, reported with HCPCS codes, 
which are subject to the 3-day payment window policy. Each wholly owned 
or wholly operated physician's practice would need to manage its 
billing processes to ensure that it billed for its physician services 
appropriately when a related inpatient admission has occurred. The 
hospital would be responsible for notifying the practice of related 
inpatient admissions for a patient who received services in a wholly 
owned or wholly operated

[[Page 42916]]

physician practice within the 3-day (or when appropriate 1-day) payment 
window prior to the inpatient stay. We would make the new modifier 
effective for claims with dates of service on or after January 1, 2012, 
and wholly owned or wholly operated physician practices would receive 
payment at the facility rate for related nondiagnostic services and 
receive payment for only the professional component for diagnostic 
services effective for services furnished on or after January 1, 2012.
    We realize that the time frames associated with the global surgical 
package for many surgical services could overlap with the 3-day (or 1-
day) payment window policy. Global surgical payment rules apply to 
major and minor surgeries, and endoscopies. Section 40.1 of the Claims 
Processing Manual (100-04 chapter 12 Physician/Nonphysician 
Practitioners) defines the global surgical package. Procedures can have 
a global surgical period of 0, 10, or 90-days. Generally, the global 
period for major surgeries is 1-day prior to the surgical procedure and 
90-days immediately following the procedure. For minor surgeries, the 
global period is the-day of the procedure and 10-days immediately 
following the procedure.
    Medicare payment for the global surgical package is based on the 
typical case for a procedure, and includes preoperative visits, intra-
operative services, and complications following surgery, postoperative 
visits, postsurgical pain management, supplies, and miscellaneous other 
services such as dressing changes and removal of sutures or staples. 
Medicare makes a single payment to the treating physician (or group 
practice) for the surgical procedure and any of the pre- and 
postoperative services typically associated with the surgical procedure 
provided within the global surgical period (10 or 90-days). The same 
section of the Claims Processing Manual (100-04 chapter 12 Physician/
Nonphysician Practitioners) also discusses the services that are not 
included in payment for the global surgical period. In general, these 
services are unrelated to the surgery, are diagnostic or are part of 
the decision to pursue surgery, or are related to the surgery but are 
so significant they warrant an additional payment. Some examples of 
services not included in payment for the global surgical period include 
the initial evaluation of the problem by the surgeon to determine the 
need for major surgery; services of another physician; visits unrelated 
to the diagnosis for the surgical procedure unless the visits occur due 
to surgical complications; treatment that is not part of the normal 
recovery from surgery; diagnostic tests; distinct surgical procedures 
that are not re-operations; treatment for postoperative complications 
that require a return trip to the operating room; critical care 
unrelated to the surgery where a seriously injured or burned patient is 
critically ill and requires the constant attention of the physician; 
and immunosuppressive therapy for organ transplants.
    The time frames for application of the 3-day payment window and the 
global surgical package could overlap. In some cases, the application 
of the 3-day payment window is straightforward. For example, a patient 
could have minor surgery in a wholly owned or wholly operated 
physician's office and, due to complications, need to be admitted 
within 3-days to an acute care hospital paid under the IPPS for follow-
up surgery. Under the 3-day payment window policy, the practice expense 
portion of the initial surgery and any pre- and postoperative visits 
associated with the surgery (both those subject to the global surgery 
rules and separate diagnostic procedures) should be included on the 
hospital's Part A claim for the inpatient admission. The wholly owned 
or wholly operated physician practice would bill for the surgery 
performed for the inpatient as well as for the initial surgical 
procedure performed in the physician practice that started the global 
period. The wholly owned or wholly operated physician practice would 
apply the HCPCS modifier that CMS would pursue to implement the 3-day 
payment window to each of these services HCPCS code. Medicare would pay 
the physician practice for the initial surgical procedure and the 
related procedure following inpatient admission at the facility rate. 
Finally, any preadmission diagnostic tests conducted by the wholly 
owned or wholly operated physician practice in the 3-day payment window 
would be included on the physician practice's claim with the 
anticipated HCPCS modifier, and Medicare would pay the wholly owned or 
wholly operated physician practice only the professional portion of the 
service.
    However, the situation could arise where a global surgical period 
overlaps with the 3-day payment window, but the actual surgical 
procedure with the global surgical package occurred before the 3-day 
payment window. In this case, several post-operative services, such as 
follow-up visits, would occur during the global period, but the surgeon 
w