Federal Register, Volume 77 Issue 222 (Friday, November 16, 2012)

[Federal Register Volume 77, Number 222 (Friday, November 16, 2012)]
[Rules and Regulations]
[Pages 68892-69373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26900]

[[Page 68891]]

Vol. 77

Friday,

No. 222

November 16, 2012

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; Revisions to Payment Policies Under the Physician Fee
Schedule, DME Face-to-Face Encounters, Elimination of the Requirement
for Termination of Non-Random Prepayment Complex Medical Review and
Other Revisions to Part B for CY 2013; Final Rule

Federal Register / Vol. 77 , No. 222 / Friday, November 16, 2012 /
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 410, 414, 415, 421, 423, 425, 486, and 495

[CMS-1590-FC]
RIN 0938-AR11

Medicare Program; Revisions to Payment Policies Under the
Physician Fee Schedule, DME Face-to-Face Encounters, Elimination of the
Requirement for Termination of Non-Random Prepayment Complex Medical
Review and Other Revisions to Part B for CY 2013

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

ACTION: Final rule with comment period.

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SUMMARY: This major final rule with comment period addresses changes to
the physician fee schedule, payments for Part B drugs, 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 implements provisions of the Affordable Care Act
by establishing a face-to-face encounter as a condition of payment for
certain durable medical equipment (DME) items. In addition, it
implements statutory changes regarding the termination of non-random
prepayment review. This final rule with comment period also includes a
discussion in the Supplementary Information regarding various programs
. (See the Table of Contents for a listing of the specific issues
addressed in this final rule with comment period.)

DATES: Effective date: The provisions of this final rule with comment
period are effective on January 1, 2013 with the exception of
provisions in Sec. 410.38 which are effective on July 1, 2013. The
incorporation by reference of certain publications listed in the rule
was approved by the Director of the Federal Register on May 16, 2012.
Comment date: To be assured consideration, comments must be
received at one of the addresses provided below, no later than 5 p.m.
on December 31, 2012. (See the SUPPLEMENTARY INFORMATION section of
this final rule with comment period for a list of the provisions open
for comment.)

ADDRESSES: In commenting, please refer to file code CMS-1590-FC.
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 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-1590-FC, 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-1590-FC, 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) 786-7195 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:

Elliott Isaac, (410) 786-4735, for any physician payment issue not
identified below.
Ryan Howe, (410) 786-3355, for issues related to practice expense
methodology and direct practice expense inputs, telehealth services,
and issues related to primary care and care coordination.
Sara Vitolo, (410) 786-5714, for issues related to potentially
misvalued services, malpractice RVUs, molecular pathology, and payment
for new preventive service HCPCS G-codes, and the sustainable growth
rate.
Carol Schwartz, (410) 786- 0576, for issues related to colonoscopy and
preventive services.
Ken Marsalek, (410) 786-4502, for issues related to the multiple
procedure payment reduction and payment for the technical component of
pathology services.
Craig Dobyski, (410) 786-4584, for issues related to geographic
practice cost indices.
Pam West, (410) 786-2302, for issues related to therapy services.
Chava Sheffield, (410) 786-2298, for issues related to certified
registered nurse anesthetists scope of benefit.
Roberta Epps, (410) 786-4503, for issues related to portable x-ray.
Anne Tayloe-Hauswald, (410) 786-4546, for issues related to ambulance
fee schedule and Part B drug payment.
Amanda Burd, (410) 786-2074, for issues related to the DME provisions.
Debbie Skinner, (410) 786-7480, for issues related to non-random
prepayment complex medical review.
Latesha Walker, (410) 786-1101, for issues related to ambulance
coverage--physician certification statement.
Alexandra Mugge, (410) 786-4457, for issues related to physician
compare.
Christine Estella, (410) 786-0485, for issues related to the physician
quality reporting system, incentives for e-prescribing, and Medicare
shared savings program.
Pauline Lapin, (410) 786-6883, for issues related to the chiropractic
services demonstration budget neutrality issue.
Gift Tee, (410) 786-9316, for issues related to the physician feedback
reporting program and value-based payment modifier.
Jamie Hermansen, (410) 786-2064, for issues related to Medicare
coverage for hepatitis B vaccine.
Andrew Morgan, (410) 786-2543, for issues related to e-prescribing
under Medicare Part D.

SUPPLEMENTARY INFORMATION:

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Provisions open for comment: We will consider comments that are
submitted as indicated above in the ``Dates'' and ``Addresses''
sections on the following subject areas discussed in this final rule
with comment period:
Interim final work, practice expense, and malpractice RVUs
(including physician time, direct practice expense (PE) inputs, and the
equipment utilization rate assumption) for new, revised, potentially
misvalued, and certain other CY 2013 HCPCS codes as indicated in the
sections that follow and listed in Addendum C to this final rule with
comment period; and
The appropriate direct PE inputs for establishing
nonfacility PE RVUs for CPT code 63650 (Percutaneous implantation of
neurostimulator electrode array, epidural).
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 following Web
site as soon as possible after they have been received:
www.regulations.gov. 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.

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 VIII.
of this final rule with comment period.

I. Executive Summary and Background
II. Provisions of the Final Rule With Comment Period
A. Resource-Based Practice Expense (PE) Relative Value Units
(RVUs)
B. Potentially Misvalued Codes Under the Physician Fee Schedule
C. Malpractice RVUs
D. Geographic Practice Cost Indices (GPCIs)
E. Medicare Telehealth Services for the Physician Fee Schedule
F. Extension of Payment for Technical Component of Certain
Physician Pathology Services
G. Therapy Services
H. Primary Care and Care Coordination
I. Payment for Molecular Pathology Services
J. Payment for New Preventive Services HCPCS G Codes
K. Certified Registered Nurse Anesthetists Scope of Benefit
L. Ordering of Portable X-Ray Services
M. Addressing Interim Final Relative Value Units (RVUs) From CY
2012 and Establish Interim Final Rule RVU's for CY 2013
N. Allowed Expenditures for Physicians' Services and the
Sustainable Growth Rate
III. Other Provisions of the Final Rule With Comment Period
A. Ambulance Fee Schedule
B. Part B Drug Payment: Average Sales Price (ASP) Issues
C. Durable Medical Equipment (DME) Face-to-Face Encounters and
Written Orders Prior to Delivery
D. Elimination of the Requirement for Termination of Non-Random
Prepayment Complex Medical Review
E. Ambulance Coverage-Physician Certification Statement
F. Physician Compare Web Site
G. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
H1. Electronic Prescribing (eRx) Incentive Program
H2. The PQRS-Medicare EHR Incentive Pilot
I. Medicare Shared Savings Program
J. Discussion of Budget Neutrality for the Chiropractic Services
Demonstration
K. Physician Value-Based Payment Modifier and the Physician
Feedback Reporting Program
L. Medicare Coverage of Hepatitis B Vaccine
M. Updating Existing Standards for E-Prescribing Under Medicare
Part D and Lifting the LTC Exemption
IV. Additional Provisions
A. Waiver of Deductible for Surgical Services Furnished on the
Same Date as a Planned Screening Colorectal Cancer Test and
Colorectal Cancer Screening Test Definition--Technical Correction
B. Physician Self-Referral Prohibition: Annual Update to the
List of CPT/HCPCS Codes
V. Collection of Information Requirements
VI. Waiver of Proposed Rulemaking
VII. Response to Comments
VIII. Regulatory Impact Analysis

Acronyms

Because of the many organizations and terms to which we refer by
acronym in this final rule with comment period, we are listing these
acronyms and their corresponding terms in alphabetical order below:

AHRQ [HHS] Agency for Healthcare Research and Quality
AMA American Medical Association
AMA RUC AMA [/Specialty Society] Relative [Value] Update Committee
ARRA American Recovery and Reinvestment Act (Pub. L. 111-5)
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 Statistics
BN Budget neutrality
CAH Critical access hospital
CBSA Core-Based Statistical Area
CF Conversion factor
CfC Conditions for Coverage
CFR Code of Federal Regulations
CNS Clinical nurse specialist
CoPs Conditions of Participation
CORF Comprehensive Outpatient Rehabilitation Facility
CPI Consumer Price Index
CPT [Physicians] Current Procedural Terminology (CPT codes,
descriptions and other data only are copyright 2012 American Medical
Association. All rights reserved.)
CRNA Certified registered nurse anesthetist
CY Calendar year
DHS Designated health services
DME Durable medical equipment
DMEPOS Durable medical equipment, prosthetics, orthotics, and
supplies
DOTPA Development of Outpatient Therapy Payment Alternatives
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
E/M Evaluation and management
EHR Electronic health record
eRx Electronic prescribing
FFS Fee-for-service
FR Federal Register
GAF Geographic adjustment factor
GAO [U.S.] Government Accountability Office
GPRO Group Practice Reporting Option
GPCI Geographic practice cost index
HAC Hospital-acquired conditions
HCPCS Healthcare Common Procedure Coding System
HHA Home health agency
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)
HPSA Health Professional Shortage Area
ICD International Classification of Diseases
IMRT Intensity Modulated Radiation Therapy
IOM Internet-only Manual
IPCI Indirect practice cost index
IPPS Inpatient prospective payment system
IWPUT Intra-service work per unit of time
MAC Medicare Administrative Contractor
MCTRJCA Middle Class Tax Relief and Job Creation Act of 2012 (Pub.
L. 112-96)
MEDCAC Medicare Evidence Development and Coverage Advisory Committee

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(formerly the Medicare Coverage Advisory Committee)
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
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)
MPPR Multiple procedure payment reduction
MQSA Mammography Quality Standards Act of 1992 (Pub. L. 102-539)
NP Nurse practitioner
NPP Nonphysician practitioner
OACT [CMS] Office of the Actuary
OBRA Omnibus Budget Reconciliation Act (Pub. L. 101-239)
OIG [HHS] Office of Inspector General
PA Physician assistant
PC Professional component
PE Practice expense
PE/HR Practice expense per hour
PERC Practice Expense Review Committee
PFS Physician Fee Schedule
PGP [Medicare] Physician Group Practice
PLI Professional liability insurance
PPS Prospective payment system
PQRS Physician Quality Reporting System
PRA Paperwork Reduction Act
PPTRA Physician Payment and Therapy Relief Act of 2010 (Pub. L. 111-
286)
PVBP Physician and Other Health Professional Value-Based Purchasing
Workgroup
RAC [Medicare] Recovery Audit Contractor
RFA Regulatory Flexibility Act
RIA Regulatory impact analysis
RVU Relative value unit
SBRT Stereotactic body radiation therapy
SGR Sustainable growth rate
TC Technical component
TIN Tax identification number
TPTCCA Temporary Payroll Tax Cut Continuation Act of 2011 (Pub. L.
112-78)
TRHCA Tax Relief and Health Care Act of 2006 (Pub. L. 109-432)
VBP Value-based purchasing

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, effective with the CY 2012
PFS final rule with comment period, the PFS Addenda 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 final rule with comment period are available
through the Internet on the CMS Web site at 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 2013 PFS
final rule with comment period, refer to item CMS-1590-FC. Readers who
experience any problems accessing any of the Addenda or other documents
referenced in this final rule with comment period and posted on the CMS
Web site identified above should contact Elliott Isaac at (410) 786-
4735.

CPT (Current Procedural Terminology) Copyright Notice

Throughout this final rule with comment period, we use CPT codes
and descriptions to refer to a variety of services. We note that CPT
codes and descriptions are copyright 2012 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. Executive Summary and Background

A. Executive Summary

1. Purpose
This major final rule with comment period revises payment policies
under the Medicare Physician Fee Schedule (PFS) and makes other policy
changes related to Medicare Part B payment. These changes are
applicable to services furnished in CY 2013. It also implements
provisions of the Affordable Care Act by establishing a face-to-face
encounter as a condition of payment for certain durable medical
equipment (DME) items. In addition, it implements statutory changes
regarding the termination of non-random prepayment review.
2. Summary of the Major Provisions
The Social Security Act (Act) requires us to establish payments
under the PFS based on national uniform relative value units (RVUs) and
the relative resources used in furnishing a service. The Act requires
that national RVUs be established for physician work, practice expense
(PE), and malpractice expense. In this major final rule with comment
period, we establish payment rates for CY 2013 for the PFS, payments
for Part B drugs, and other Medicare Part B payment policies to ensure
that our payment systems are updated to reflect changes in medical
practice and in the relative value of services. It also implements
provisions of the Affordable Care Act by establishing a face-to-face
encounter as a condition of payment for certain durable medical
equipment (DME) items, and by removing certain regulations regarding
the termination of non-random prepayment review. It also establishes
new claims-based data reporting requirements for therapy services to
implement a provision in the Middle Class Tax Relief and Jobs Creation
Act (MCTRCA). In addition, this rule:
Identifies Potentially Misvalued Codes to be Evaluated.
Establishes Additional Multiple Procedure Payment
Reductions (MPPR).
Expands Medicare Telehealth Services.
Implements Regulatory Changes Regarding Payment for
Technical Component of Certain Physician Pathology Services to Conform
to Statute.
Requires the Inclusion of Specific Information on Claims
for Therapy Services.
Establishes New Transitional Care Management Services.
Clarifies Services Included in the Certified Registered
Nurse Anesthetists Scope of Benefit.
Modifies Ordering Requirements for Portable X-ray
Services.
Updates the Ambulance Fee Schedule.
Sets Part B Drug Payment Rates for 2013.
Addresses Ambulance Coverage--Physician Certification
Statement.
Updates policies regarding the--
++ Physician Compare Web site.
++ Physician Quality Reporting System.
++ Electronic Prescribing (eRx) Incentive Program.
++ Electronic Health Record (EHR) Incentive Program.
++ Medicare Shared Savings Program.
Discusses Budget Neutrality for the Chiropractic
Demonstration.
Addresses Implementation of the Physician Value-Based
Payment Modifier and the Physician Feedback Reporting Program.
Establishes Medicare Coverage of Hepatitis B Vaccine.
Updates Existing Standards for e-prescribing under
Medicare Part D and Lifting the LTC Exemption.
3. Summary of Costs and Benefits
The statute requires that we establish by regulation each year
payment amounts for all physicians' service. These payment amounts are
required to be adjusted to reflect the variations in

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the costs of providing services in different geographic areas. The
statute also requires that annual adjustments to the RVUs not cause
annual estimated expenditures to differ by more than $20 million from
what they would have been had the adjustments not been made. If
adjustments to RVUs would cause expenditures to change by more than $20
million, we must make adjustments to preserve budget neutrality.
Several changes affect the specialty distribution of Medicare
expenditures. This final rule with comment period reflects the
Administration's priority to improve payment for primary care services.
As described in Section II.N, in the absence of Congressional action,
an overall reduction of 26.5 percent will be imposed in the conversion
factor used to calculate payment for physicians' services on or after
January 1, 2013 due to the Sustainable Growth Rate (SGR). To isolate
the impact of changes that we are proposing in this final rule with
comment period, we analyze and discuss the policies' impact with a
constant conversion factor. In the absence of a change in the
conversion factor, payments to primary care specialties will increase
and payments to select other specialties will decrease due to several
changes in how we calculate payments for CY 2013.
The largest payment increase for primary care specialties overall
will result from a new payment for managing a beneficiary's care when
the beneficiary is discharged from an inpatient hospital, a SNF, an
outpatient hospital observation, partial hospitalization services, or a
community mental health center. Payments to primary care specialties
also will increase due to redistributions from changes in payments for
services furnished by other specialties. Because of the budget-neutral
nature of this system, decreases in payments for one service result in
increases in payments in others.
Payments to primary care specialties are also impacted by the
completion of the 4-year transition to new PE RVUs using the new
Physician Practice Information Survey (PPIS) data that was adopted in
the CY 2010 PFS final rule with comment period. The projected impacts
of using the new PPIS data are generally consistent with the impacts
discussed in the CY 2012 final rule with comment period (76 FR 72452).
Several types of providers are projected to see decreases in
Medicare PFS payments, mainly as a result of the potentially misvalued
codes initiative. We have received numerous new codes with new values
and revised codes with new values for CY 2013 as a result of our
ongoing misvalued codes initiative, an effort to improve payment
accuracy. Many of the new and revised codes that we valued on an
interim basis for CY 2013 originated with the potentially misvalued
codes initiative. Reductions for pathology, neurology, and independent
laboratories are a result of the misvalued code initiative. In the case
of independent laboratories, we note that independent laboratories
receive the majority of the Medicare revenue from the Clinical Lab Fee
Schedule, which is unaffected by the misvalued code initiative.
Radiation therapy centers will see an overall decrease of 9 percent
primarily as a result of the PPIS transition discussed above and a
change in the interest rate assumption used to calculate PE. Radiation
oncology sees a 7 percent decrease for the same reasons as radiation
therapy centers.

B. Background

We note that throughout this final rule with comment period, 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 clinical social workers) who are
permitted to bill Medicare under the PFS for their services. Since
January 1, 1992, Medicare has paid for physicians' services under
section 1848 of the Act, ``Payment for Physicians' Services.'' The Act
requires that CMS make payments under the PFS using 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, PE, and malpractice expense.
Before the establishment of the resource-based relative value system,
Medicare payment for physicians' services was based on reasonable
charges.
1. Development of the Relative Value System
a. 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.
The physician work RVUs established for the implementation of the
fee schedule in January 1992 were 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 (HHS). 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 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/Specialty Society Relative Value Update Committee
(AMA RUC).
b. Practice Expense Relative Value Units (PE RVUs)
Initially, only the physician work RVUs were resource-based, and
the PE and malpractice RVUs were based on average allowable charges.
Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103-
432), and 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 and
required us to develop resource-based PE RVUs for each physicians'
service. We were to consider general categories of expenses (such as
office rent and wages of personnel, but excluding malpractice expenses)
comprising PEs.
We established the resource-based PE RVUs for each physicians'
service in a final rule, published November 2, 1998 (63 FR 58814),
effective for services furnished in 1999. Separate PE RVUs are
established for procedures that can be furnished 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
furnishing the service, apart from payment under the PFS. The
nonfacility

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RVUs reflect all of the direct and indirect PEs of furnishing a
particular service. Based on the BBA 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. Panels of physicians, practice administrators, and
nonphysician health professionals (for example, registered nurses
(RNs)), who were nominated by physician specialty societies and other
groups identified the direct inputs required for each physicians'
service. (We have since refined and revised these inputs based on
recommendations from the AMA RUC.) Aggregate specialty-specific
information on hours worked and PEs was obtained from the AMA's
Socioeconomic Monitoring System (SMS).
Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA)
(Pub. L. 106-113) directed us 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 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. We adopted a 4-
year transition to the new PE RVUs. This transition was completed in CY
2010. Direct PE RVUs were calculated for CY 2013 using this
methodology, unless otherwise noted.
In the CY 2010 PFS final rule with comment period, we updated the
practice expense per hour (PE/HR) data that are used in the calculation
of PE RVUs for most specialties (74 FR 61749). 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 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 2013, the final year of the
transition, PE RVUs are calculated based on the new data.
c. 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 with comment period published
November 2, 1999 (64 FR 59380). The malpractice RVUs were based on
malpractice insurance premium data collected from commercial and
physician-owned insurers.
d. 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. Prior to CY 2013, we conducted
separate periodic reviews of work RVUs and PE RVUs. 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, 2007. The Fourth Five-
Year Review of Work RVUs was published in the CY 2012 PFS final rule
with comment period (76 FR 73026).
Initially refinements to the direct PE inputs relied on input from
the AMA RUC-established the Practice Expense Advisory Committee (PEAC).
Through March 2004, the PEAC provided recommendations to CMS for more
than 7,600 codes (all but a few hundred of the codes included in the
AMAs 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 the specialty-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 2012 PFS final rule with comment period (76 FR 73057), we
finalized a proposal to consolidate reviews of work and PE RVUs under
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued
codes under section 1848(c)(2)(K) of the Act into one annual process.
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 the amendments to Section 1848 of
the Act, as enacted 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 PEs; (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 fee schedule
(the so-called `Harvard valued codes'); and (7) other codes determined
to be appropriate by the Secretary.
e. Application of Budget Neutrality to Adjustments of RVUs
Budget neutrality (BN) 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

[[Page 68897]]

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 would 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.
2. Components of the Fee Schedule Payment Amounts
To calculate the payment for each physicians' service, the
components of the fee schedule (work, PE, and malpractice RVUs) are
adjusted by geographic practice cost indices (GPCIs). 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.
3. Most Recent Changes to the Fee Schedule
The CY 2012 PFS final rule with comment period (76 FR 73026)
implemented changes to the PFS and other Medicare Part B payment
policies. It also finalized many of the CY 2011 interim RVUs and
implemented interim RVUs for new and revised codes for CY 2012 to
ensure that our payment systems are updated to reflect changes in
medical practice and the relative values of services. In the CY 2012
PFS final rule with comment period, we announced the following for CY
2012: the total PFS update of -27.4 percent; the initial estimate for
the sustainable growth rate (SGR) of -16.9 percent; and the conversion
factor (CF) of $24.6712. These figures were calculated based on the
statutory provisions in effect on November 1, 2011, when the CY 2012
PFS final rule with comment period was issued.
A correction notice was issued (77 FR 227) to correct several
technical and typographical errors that occurred in the CY 2012 PFS
final rule with comment period.
On December 23, 2011, the Temporary Payroll Tax Cut Continuation
Act of 2011 (TPTCCA) (Pub. L. 112-78) was signed into law. Section 301
of the TPTCCA specified a zero percent update to the PFS from January
1, 2012 through February 29, 2012. As a result, the CY 2012 PFS
conversion factor was revised to $34.0376 for claims with dates of
service on or after January 1, 2012 through February 29, 2012. In
addition, the TPTCCA extended several provisions affecting Medicare
services furnished on or after January 1, 2012 through February 29,
2012, including:
Section 303--the 1.0 floor on the physician work
geographic practice cost index;
Section 304--the exceptions process for outpatient therapy
caps;
Section 305--the payment to independent laboratories for
the technical component (TC) of physician pathology services furnished
to certain hospital patients, and
Section 307--the 5 percent increase in payments for mental
health services.
On February 22, 2012, the Middle Class Tax Relief and Job Creation
Act of 2012 (Pub. L. 112-96) (MCTRJCA) was signed into law. Section
3003 of the MCTRJCA extended the zero percent PFS update to the
remainder of CY 2012. As a result of the MCTRJCA, the CY 2012 PFS CF
was maintained as $34.0376 for claims with dates of service on or after
March 1, 2012 through December 31, 2012. In addition:
Section 3004 of MCTRJCA extended the 1.0 floor on the
physician work geographic practice cost index through December 31,
2012;
Section 3006 continued payment to independent laboratories
for the TC of physician pathology services furnished to certain
hospital patients through June 30, 2012; and
Section 3005 extended the exceptions process for
outpatient therapy caps through CY 2012 and made several other changes
related to therapy claims and caps.

II. Provisions of the Final 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, amended section
1848(c)(2)(C)(ii) of the Act to require 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 otherwise 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 explanation 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 involved with furnishing 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 PEs incurred per hour worked 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

[[Page 68898]]

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 the CY 2010 PFS for almost all of the
Medicare-recognized specialties that participated in the survey.
When we began using 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 1848(c)(2)(H)(i) of the Act 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 and
spine surgery since these specialties currently are not separately
recognized by Medicare, nor do we have a method to blend these data
with Medicare-recognized specialty data. Similarly, we do not use the
PPIS data for sleep medicine since there is not a full year of Medicare
utilization data for that specialty given when the specialty code was
created.
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 for
physician time.
For registered dietician services, the 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 were five specialties whose utilization data were newly
incorporated into ratesetting for CY 2012. In accordance with the final
policies adopted in the CY 2012 final rule with comment period (76 FR
73036), we use proxy 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; Intensive Cardiac
Rehabilitation from Cardiology, and Certified Nurse Midwife from
Obstetrics/gynecology.
For CY 2013, there are two specialties whose utilization data will
be newly incorporated into ratesetting. We proposed to use proxy PE/HR
values for these specialties by crosswalking values from other
specialties that furnish similar services as follows: Cardiac
Electrophysiology from Cardiology; and Sports Medicine from Family
Practice. These proposed changes are reflected in the ``PE HR'' file
available on the CMS Web site under the supporting data files for the
CY 2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/.
We did not receive any comments regarding our proposal to use these
proxy PE/HR values for these specialties, and we continue to believe
that the values crosswalked from other specialties that furnish similar
services are appropriate. Therefore, we are finalizing our CY 2013
proposals to update the PE/HR data as reflected in the ``PE HR'' file
available on the CMS Web site under the supporting data files for the
CY 2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
As provided in the CY 2010 PFS final rule with comment period (74
FR 61751), CY 2013 is the final year of the 4-year transition to the PE
RVUs calculated using the PPIS data. Therefore, the CY 2013 PE RVUs are
developed based entirely on the PPIS data, except as noted in this
section.
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 involved with furnishing 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 final rule with comment period describes
the current data sources for specialty-specific indirect costs used in
our PE calculations. We allocated 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 incorporated the

[[Page 68899]]

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 furnish the service to determine an initial indirect
allocator. For example, if the direct portion of the PE RVUs for a
given service was 2.00 and direct costs, on average, represented 25
percent of total costs for the specialties that furnished the service,
the initial indirect allocator would be 6.00 since 2.00 is 25 percent
of 8.00 and 6.00 is 75 percent of 8.00.
Next, we 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.
Next, 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
furnishing the first service with an allocator of 10.00 was half of the
average indirect cost of the specialties furnishing 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 furnished independently or by different providers, or they
may be furnished 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.
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 1, the formulas
were divided into two parts for each service.

[[Page 68900]]

The first part does not vary by service and is the
indirect percentage (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 furnished
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 in order to redistribute RVUs from step 18 to all PE RVUs in
the PFS and 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.

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[dash]orthotist.
58........................... Individuals not included in 55, 56, or 57.
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.

[[Page 68901]]

3............................ Medical supply company with pedorthic personnel.
----------------------------------------------------------------------------------------------------------------

In the CY 2013 PFS proposed rule, we proposed to calculate the
specialty mix for low volume services (fewer than 100 billed services
in the previous year) using the same methodology we used for non-low
volume services. We currently use the survey data from the dominant
specialty for these low volume services. We proposed to calculate a
specialty mix for these services rather than use the dominant specialty
in order to smooth year-to-year fluctuations in PE RVUs due to changes
in the dominant specialty. However, the PE RVUs for the affected HCPCS
codes were inadvertently displayed in Addendum B for the CY 2013 PFS
proposed rule using our previously established methodology of using the
dominant specialty for these services. While we received comments on
our proposal, including some suggesting alternative methods for
handling low volume services, we do not believe that it would be
appropriate to make changes to the current methodology since the
correct impact of the proposed calculation was not reflected in the
displayed PE RVUs. We appreciate the commenters' perspective on the
proposal, and will take those comments into account as we consider the
best methodology for calculating the specialty mix for low volume
services in future rulemaking.
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 consistent with current payment policy as
implemented in claims processing. 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. Similarly, for those services to which volume
adjustments are made to account for the payment modifiers, time
adjustments are applied as well. For time adjustments to surgical
services, the intraoperative portion in the physician time file is
used; where it is not present, the intraoperative percentage from the
payment files used by Medicare contractors to process Medicare claims
is used instead. Where neither is available, we use the payment
adjustment ratio to adjust the time accordingly. Table 2 details the
manner in which the modifiers are applied.

Table 2--Application of Payment Modifiers to Utilization Files
----------------------------------------------------------------------------------------------------------------
Modifier Description Volume adjustment Time adjustment
----------------------------------------------------------------------------------------------------------------
80, 81, 82................... Assistant at Surgery. 16%.................. Intraoperative portion.
AS........................... Assistant at Surgery-- 14% (85% * 16%)...... Intraoperative portion.
Physician Assistant.
50 or LT and RT.............. Bilateral Surgery.... 150%................. 150% of physician time.
51........................... Multiple Procedure... 50%.................. Intraoperative portion.
52........................... Reduced Services..... 50%.................. 50%.
53........................... Discontinued 50%.................. 50%.
Procedure.
54........................... Intraoperative Care Preoperative + Preoperative + Intraoperative
only. Intraoperative portion.
Percentages on the
payment files used
by Medicare
contractors to
process Medicare
claims.
55........................... Postoperative Care Postoperative Postoperative portion.
only. Percentage on the
payment files used
by Medicare
contractors to
process Medicare
claims.
62........................... Co-surgeons.......... 62.5%................ 50%.
66........................... Team Surgeons........ 33%.................. 33%.
----------------------------------------------------------------------------------------------------------------

We also make adjustments to volume and time that correspond to
other payment rules, including special multiple procedure endoscopy
rules and multiple procedure payment reductions (MPPR) including the
final ophthalmology and cardiovascular diagnostic services MPPR
discussed in section II.B.4. of this final rule with comment period. We
note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced
payments for multiple imaging procedures and multiple therapy services
from the budget-neutrality calculation under section
1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the
development of the RVUs.
For anesthesia services, we do not apply adjustments to volume
since the average allowed charge is used when simulating RVUs and
therefore includes all discounts. A time adjustment of 33 percent is
made only for medical direction of two to four cases since that it is
the only occasion where time units are duplicative.
Comment: One commenter expressed concern regarding the accuracy of
the 33 percent time adjustment made for these services.
Response: We note that we did not make any proposals regarding the
33 percent time adjustment for medical direction in the CY 2013 PFS
proposed rule. As such, we do not believe it would be appropriate to
modify that

[[Page 68902]]

figure in this final rule. However, we would welcome any independently
verifiable data that could inform the accuracy of our assumption
regarding duplicative time units. The 33 percent time adjustment
effectively assumes medical direction of three cases. We would consider
any such data for future rulemaking.
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)[supcaret] 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 = 0.5 is the standard 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).
price = price of the particular piece of equipment.
interest rate = sliding scale (see proposal below)
life of equipment = useful life of the particular piece of
equipment.
maintenance = factor for maintenance; 0.05.

The interest rate we have previously used was proposed and finalized
during rulemaking for CY 1998 PFS (62 FR 33164). In the CY 2012
proposed rule (76 FR 42783), we solicited comment regarding reliable
data on current prevailing loan rates for small businesses. In response
to that request, the AMA RUC recommended that rather than applying the
same interest rate across all equipment, CMS should consider a
``sliding scale'' approach which varies the interest rate based on the
equipment cost, useful life, and SBA (Small Business Administration)
maximum interest rates for different categories of loan size and
maturity. The maximum interest rates for SBA loans are as follows:
Fixed rate loans of $50,000 or more must not exceed Prime
plus 2.25 percent if the maturity is less than 7 years, and Prime plus
2.75 percent if the maturity is 7 years or more.
For loans between $25,000 and $50,000, maximum rates must
not exceed Prime plus 3.25 percent if the maturity is less than 7
years, and Prime plus 3.75 percent if the maturity is 7 years or more.
For loans of $25,000 or less, the maximum interest rate
must not exceed Prime plus 4.25 percent if the maturity is less than 7
years, and Prime plus 4.75 percent, if the maturity is 7 years or more.

The current Prime rate is 3.25 percent.
Based on that recommendation, for CY 2013, we proposed to use a
``sliding scale'' approach based on the current SBA maximum interest
rates for different categories of loan size (price of the equipment)
and maturity (useful life of the equipment). Additionally, we proposed
to update this assumption through annual PFS rulemaking to account for
fluctuations in the Prime rate and/or changes to the SBA's formula to
determine maximum allowed interest rates.
Comment: Both MedPAC and the AMA RUC supported the proposal. MedPAC
stated:

We support CMS's proposal to use more accurate interest rate
information because this will improve the accuracy of practice expense
payment rates and redistribute dollars from overvalued codes to
undervalued codes.
The AMA RUC commented:
The RUC appreciates that CMS intends to adopt the RUC
recommendation of implementing a ``sliding scale'' for the interest
rate utilized in computing equipment costs.
Other commenters, also supported the proposal. However, while
physician organizations that represent specialties that provide medical
equipment intensive services and medical equipment manufacturers
generally acknowledged that the interest rate used in the calculation
had not been updated in over 12 years, they did not support the
specific proposed update approach. These commenters assertions
included: The proposal is ``overly complicated'' to administer since
the interest rates vary by loan size and maturity, and interest rates
can fluctuate; the SBA loan program is designed to encourage loans to
small businesses so the SBA rates are below market rates unrelated to
the cost of capital for physician practices; the proposed methodology
may be inconsistent with the statute since it does not reflect relative
resources; CMS should factor in the opportunity cost for practices that
pay cash for the equipment (a weighted average cost of capital (WACC)
approach) using WACC measures available in the private sector; CMS
should transition this policy given the investments in equipment that
have already been made; CMS should use a multiyear average of the Prime
rate rather than the most recent Prime rate in the calculation; and,
CMS should only update the interest rate every few years to help ensure
more stable practice expenses.
Response: We agree with MedPAC, the AMA RUC, and the commenters who
supported our proposed approach for the interest rate calculation. Our
proposed approach recognizes that the goal of the practice expense
methodology is to calculate, as accurately as possible given the
available data sources, the relative resources required to furnish
services that are paid under the physician fee schedule. To continue to
use an 11 percent interest rate assumption in the calculation of the
equipment portion of the practice expense RVUs when this rate does not
reflect a market rate would unnecessarily distort this relativity. We
are unaware of, nor did commenters suggest, a readily available and
transparent data source that specifically provides nationally
representative data on the typical interest rates charged to physicians
when obtaining financing for medical equipment. We believe that the use
of the SBA maximum loan rates leads to a more reasonable estimate of
relative resource used across the fee schedule and, consistent with the
MedPAC comment, that the continued use of an 11 percent interest rate
would inappropriately skew physician fee schedule relativity towards
equipment intensive services.
Additionally, we disagree that the maximum SBA loan rates are not
sufficient as an assumption for the rate at which a typical physician
practice would obtain financing, nor did the commenters offer
nationally representative data indicating that this is the case.
We agree with commenters that, in an ideal world, the interest rate
assumption used in the equipment calculation would explicitly factor in
the opportunity costs for practices that pay cash for the equipment (a
WACC approach) and not just the cost of financing. However, as with the
interest rates typically charged to physicians for medical equipment
financing, we are unaware of any nationally representative data source
that would provide the opportunity cost for physician practices
deciding on purchasing medical equipment. Some commenters suggested we
use proprietary WACC measures designed for industry and company stock
valuations. We do not believe it would be appropriate to use
proprietary measures in this calculation, nor do we believe that
measures developed to value the stock prices of individual medical
equipment companies or the medical device industry are necessarily
applicable to the opportunity costs of

[[Page 68903]]

typical medical practices. Also, we do not agree that the opportunity
cost of a physician practice purchase of medical equipment, if known or
estimable, would exceed the SBA maximum loan rates.
We also do not believe that our proposal is overly complicated to
administer. The Prime rate is readily available, as are the SBA loan
maximums. As such, we believe our proposal is a very transparent
approach. We stated that we would update the rate through our annual
PFS rulemaking process. In response to comments on this aspect of our
proposal, we are clarifying that we generally intend to update the
interest rate calculation through future rulemaking when we broadly
update one or more of the other direct practice expense inputs, such as
pricing or labor wage rates, to maintain relatively between the
practice expense components. Given that we do not anticipate updating
the interest rate assumption every year, we do not believe it is
necessary to use a rolling average in the calculation. Periodic updates
using the most recent Prime rate will balance commenters' desire for
stability in the PE RVUs with the need to maintain appropriate
relativity under the PFS. We also do not believe a transition is
appropriate in this situation. We believe it is important to update the
interest rate assumptions to appropriately adjust the relativity of
equipment in relation to other PE inputs and the relation of equipment
intensive services to other services on the PFS.
In summary, we are finalizing without modification our proposal to
use a ``sliding scale'' approach based on the current SBA maximum
interest rates for different categories of loan size (price of the
equipment) and maturity (useful life of the equipment). We will update
the interest rate assumption through PFS rulemaking to account for
fluctuations in the Prime rate and/or changes to the SBA's formula to
determine maximum allowed interest rates. We are clarifying that we
generally intend to update the interest rate calculation through future
rulemaking only in years when we broadly update one or more of the
other direct practice expense inputs. Accordingly, we anticipate
updating the interest rate calculation less frequently than annually.
The effects of this policy on direct equipment inputs are reflected
in the CY 2013 direct PE input database, available on the CMS Web site
under the downloads for the CY 2013 PFS final rule with comment period
at http://www.cms.gov/PhysicianFeeSched/. Additionally, we note that
the PE RVUs included in Addendum B reflect this policy.
BILLING CODE 4120-01-P

[[Page 68904]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.000

[[Page 68905]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.001

[[Page 68906]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.002

[[Page 68907]]

BILLING CODE 4120-01-C
3. Changes to Direct PE Inputs for Specific Services
In this section, we discuss other specific CY 2013 proposals and
changes related to direct PE inputs for specific services. The changes
we proposed and are finalizing are included in the final rule CY 2012
direct PE database, which is available on the CMS Web site under the
supporting data files for the CY 2012 PFS final rule with comment
period at www.cms.gov/PhysicianFeeSched/. We note that we address
comments on the interim direct PE inputs established in the CY 2012 PFS
final rule with comment period in section II.M. of this final rule with
comment period.
a. Equipment Minutes for Interrogation Device Evaluation Services
It has come to our attention that the pacemaker follow-up system
(EQ138) associated with two interrogation device management service
codes does not have minutes allocated in the direct PE input database.
Based on our analysis of these services, we believed that 10 minutes
should be allocated to the equipment for each of the following CPT
codes: 93294 (Interrogation device evaluation(s) (remote), up to 90
days; single, dual, or multiple lead pacemaker system with interim
physician analysis, review(s) and report(s)), and 93295 (Interrogation
device evaluation(s) (remote), up to 90 days; single, dual, or multiple
lead implantable cardioverter-defibrillator system with interim
physician analysis, review(s) and report(s)). Therefore, the direct PE
input database was modified to allocate 10 minutes to the pacemaker
follow-up system for CPT codes 93294 and 93295.
Comment: One commenter expressed support for this modification.
Response: We appreciate the support for the modification and will
maintain the allocated equipment minutes in the final direct PE input
database.
b. Clinical Labor for Pulmonary Rehabilitation Services (HCPCS Code
G0424)
It has come to our attention that the direct PE input database
includes 15 minutes of clinical labor time in the nonfacility setting
allocated for a CORF social worker/psychologist (L045C) associated with
HCPCS code G0424 (Pulmonary rehabilitation, including exercise
(includes monitoring), one hour, per session, up to two sessions per
day). Based on our analysis of this service, we believed that these 15
minutes should be added to the 15 minutes currently allocated to the
Respiratory Therapist (L042B) associated with this service. Therefore,
we proposed to modify the direct PE input database to allocate 15
additional minutes to the Respiratory Therapist (L042B) (for a total of
30 minutes) and to delete the CORF social worker/psychologist (L045C)
associated with HCPCS code G0424.
Comment: One commenter supported the modification as accurate and
fair. Another commenter suggested that the appropriate clinical staff
time for the code should be 60 minutes since the code describes an hour
long session. Furthermore, the same commenter expressed opposition to
reassigning the 15 minutes to the Respiratory Therapist because the
rate per minute of the Respiratory Therapist is lower than the rate per
minute of the CORF social worker/psychologist and the change, however
modest, may potentially reduce the PE RVUs for the service.
Response: We appreciate the support for the modification and
understand the commenter's concerns. We recognize that for many
services with code descriptors that include procedure time assumptions,
the number of clinical labor minutes allocated during the service
period corresponds to the time as described by the code. However, as we
explained in the CY 2011 PFS final rule with comment period (75 FR
73299), because pulmonary rehabilitation services reported under HCPCS
code G0424 can be furnished either individually or in groups, we
believe that 30 minutes of respiratory therapist time would be more
appropriate for valuing the typical pulmonary rehabilitation service.
We also recognize that reclassifying the direct PE input labor category
from CORF social worker/psychologist to Respiratory Therapist for 15
minutes will reduce the direct labor costs used in calculating PE RVUs
for the service. However, we continue to believe that the Respiratory
Therapist is the most appropriate labor category to include as a direct
PE input for this service.
After consideration of the comments we received, we are finalizing
the modification of the direct PE labor inputs for this service to
allocate 15 additional minutes to the Respiratory Therapist (L042B)
(for a total of 30 minutes) and to delete the CORF social worker/
psychologist (L045C) associated with HCPCS code G0424.
c. Transcranial Magnetic Stimulation Services
For CY 2011, the CPT Editorial Panel converted Category III CPT
codes 0160T and 0161T to Category I status (CPT codes 90867
(Therapeutic repetitive transcranial magnetic stimulation (TMS)
treatment; initial, including cortical mapping, motor threshold
determination, delivery and management), and 90868 (Therapeutic
repetitive transcranial magnetic stimulation (TMS) treatment;
subsequent delivery and management, per session)), which were
contractor priced on the PFS. For CY 2012, the CPT Editorial Panel
modified CPT codes 90867 and 90868, and created CPT code 90869
((Therapeutic repetitive transcranial magnetic stimulation (TMS)
treatment; subsequent motor threshold re-determination with delivery
and management.) In the CY 2012 PFS final rule with comment period, we
established interim final values based on refinement of RUC-recommended
work RVUs, direct PE inputs, and malpractice risk factor crosswalks for
these services (76 FR 73201).
Subsequent to the development of interim final PE RVUs, it came to
our attention that the application of our usual PE methodology resulted
in anomalous PE values for these services. As we explain in section
II.A.2.c.2 of this final rule with comment period, for a given service,
we use the direct costs associated with a service (clinical staff,
equipment, and supplies) and the average percentage that direct costs
represent of total costs (based on survey data) across the specialties
that furnish the service to determine an initial indirect allocator.
For services almost exclusively furnished by one specialty, the
average percentage of indirect costs relative to direct costs would
ordinarily be used to determine the initial indirect allocator. For
specialties that typically incur significant direct costs relative to
indirect costs, the initial indirect allocator for their services is
generally lower than for the specialties that typically incur lower
direct costs relative to indirect costs. Relative to direct costs, the
methodology generally allocates a greater proportion of indirect PE to
services furnished by psychiatrists, for example, than to services
furnished by specialties that typically incur significant direct costs,
such as radiation oncologists. In the case of TMS, however, the direct
costs incurred by psychiatrists reporting the codes far exceed the
direct costs typical to any other service predominantly furnished by
psychiatrists. This drastic difference in the direct costs of TMS
relative to most other services furnished by psychiatrists, results in
anomalous PE values since code-level indirect PE allocation relies on
typical resource costs for the specialties that furnish the service. In
other words, the amount of indirect PE allocated to TMS services is

[[Page 68908]]

based on the proportion of indirect expense to direct expense that is
typical of other psychiatric services, and is not on par with other
services that require similar investments in capital equipment and
high-cost, disposable supplies.
Historically, we have contractor-priced (meaning our claims
processing contractors develop payment rates) for services with
resource costs that cannot be appropriately valued within the generally
applicable PE methodology used to price services across the PFS.
Because there is no mechanism to develop appropriate payment rates for
these services within our current methodology, we proposed to
contractor price these codes for CY 2013.
Comment: One commenter objected to the proposal to contractor price
these codes for CY 2013 and suggested that CMS should establish PE RVUs
using the generally applicable PE methodology and must endeavor in
ensuing rulemaking to revise the methodology to refine any values the
agency views as ``anomalous.'' The commenter also questioned CMS's
assumption that the direct costs for psychiatrists who furnish these
services ``far exceed'' the direct costs for psychiatrists who do not
furnish these services. The commenter stated that CMS made this
assessment without any empirical support and that CMS needs to conduct
a survey or obtain other data from psychiatrists before drawing any
conclusions regarding the appropriateness of Medicare payment rates on
this basis.
Response: We understand the commenter's objections, but as we
explained in the proposal, we do not believe that there is a mechanism
within the current methodology that allows us to develop appropriate
payment rates for these services. We agree with the commenter that it
may be appropriate to consider potential changes to the practice
expense methodology to accommodate changing circumstances of medical
practice. We do not agree with the commenter, however, that we have no
means to pay appropriately for services when we recognize areas where
the practice expense methodology is inadequate and that we must
establish national RVUs based on that methodology, even when it does
not accommodate the unique circumstances of particular services.
Instead, we believe that in outlier cases, contractor pricing allows
Medicare to pay more appropriately for particular services furnished to
beneficiaries.
In our proposal, we pointed out that the direct costs incurred by
psychiatrists reporting the codes far exceed the direct costs typical
to any other service predominantly furnished by psychiatrists. The
commenter objected to this assertion and claimed it was made without
any empirical support. We made that assertion based on comparing the
direct practice expense input costs for transcranial magnetic
stimulation services and the current direct practice expense input
costs in the direct PE database for services predominantly furnished by
the specialty based on Medicare claims data. In our examination of 20
frequently billed psychiatry services (where greater than half of the
Medicare allowed services were reported by psychiatrists), the total
direct costs (clinical labor, disposable medical supplies, or medical
equipment) in the direct PE input database summed to under $10 for all
but 3 of these 20 services. Examples of these services include CPT
codes 90807 (Individual psychotherapy, insight oriented, behavior
modifying and/or supportive, in an office or outpatient facility,
approximately 45 to 50 minutes face-to-face with the patient; with
medical evaluation and management services), 90862 (Pharmacologic
management, including prescription, use, and review of medication with
no more than minimal medical psychotherapy), and 90845
(Psychoanalysis). For the three where the direct PE input costs summed
to greater than $10, HCPCS code M0064 (Brief office visit for the sole
purpose of monitoring or changing drug prescriptions used in the
treatment of mental psychoneurotic and personality disorders), and CPT
codes 90865 (Narcosynthesis for psychiatric diagnostic and therapeutic
purposes (eg, sodium amobarbital (Amytal) interview)), and 90870
(Electroconvulsive therapy (includes necessary monitoring)), the
service with the highest direct cost sum was $32.24. In contrast, the
transcranial magnetic stimulation services treatment delivery (CPT code
90867) included direct PE inputs that summed to direct costs of
$145.19. The disparity between the TMS direct costs and the direct
costs in other frequent psychiatry codes was the basis for our
assertion that the direct costs for this service far exceeded the
direct costs typical to any other service predominantly furnished by
psychiatrists. Thus, we continue to believe our decision to contractor
price these codes is the proper one.
Comment: Another commenter requested that CMS use the existing
methodology to price the codes or contractor price the codes. This
commenter also urged CMS to consider alternate sources of data for
resource costs as they become available, or to make appropriate future
refinements to the practice expense methodology.
Response: We appreciate the commenter's support for our proposal as
a suitable means of pricing the services. We will consider appropriate
means to develop national prices for these services in the context of
potential changes to the practice expense methodology and the
availability of new data sources.
After consideration of these public comments, we are finalizing our
proposal to contractor price CPT codes 90867, 90868, and 90869 for CY
2013.
d. Spinal Cord Stimulation Trial Procedures in the Nonfacility Setting
Stakeholders have recently brought to our attention that CPT code
63650 (Percutaneous implantation of neurostimulator electrode array,
epidural) is frequently furnished in the physician office setting but
is not priced in that setting. We note that the valuation of a service
under the PFS in particular settings does not address whether those
services are medically reasonable and necessary in the case of
individual patients, including being furnished in a setting appropriate
to the patient's medical needs and condition. However, because these
services are being furnished in the nonfacility setting, we believed
that CPT code 63650 should be reviewed to establish appropriate
nonfacility inputs. We proposed to review CPT code 63650 and requested
recommendations from the AMA RUC and other public commenters on the
appropriate physician work RVUs (as measured by time and intensity),
and facility and nonfacility direct PE inputs for this service. We
understand that disposable leads comprise a significant resource cost
for this service and are currently separately reportable to Medicare
for payment purposes when the service is furnished in the physician
office setting. Disposable medical supplies are not considered
prosthetic devices paid under the Durable Medical Equipment,
Prosthetic/Orthotic, and Supplies (DMEPOS) fee schedule and generally
are incorporated as nonfacility direct PE inputs to PE RVUs. We sought
comment on establishing nonfacililty PE RVUs for CPT code 63650.
Comment: Several commenters expressed concerns regarding the
possibility of establishing nonfacility PE RVUs for this service based
on the assumption that the nonfacility PFS payment rate would be lower
than the rate paid by the Medicare hospital outpatient prospective
payment system

[[Page 68909]]

(OPPS). These commenters stated that the supply, personnel, and
administration costs are higher in the non-facility setting than in the
facility setting and that current Medicare payment for L8680 under the
DMEPOS fee schedule offsets the difference in costs between the
facility and nonfacility setting. Many of these commenters also stated
that it is more cost effective for the Medicare program for these
services to be furnished in the nonfacility setting. These commenters
also stated that it is more convenient for patients to receive this
service in the nonfacility setting, so that Medicare should not
implement nonfacility payment rates because doing so might discourage
practitioners from furnishing the service in the nonfacility setting.
Response: We understand the commenters' interest in ensuring that
Medicare beneficiaries retain access to the service in the nonfacility
setting. We do not agree with the commenters' underlying assumption
that developing accurate payment rates for the service in the
nonfacility setting will necessarily deter practitioners from
furnishing the service to Medicare beneficiaries outside the facility
setting. Additionally, we do not know how to reconcile the
contradictory contentions of many individual commenters that the costs
of furnishing the services in the nonfacility setting are greater so
that payment rates should be higher, but furnishing services there
would still be more cost effective for Medicare.
Comment: One commenter supported the proposal to create nonfacility
RVUs for this service since it would reduce overutilization of the
service and lower the likelihood of fraud.
Response: We appreciate the support for the proposal, and we
generally agree that developing accurate payment rates encourages
appropriate utilization.
Comment: One commenter stated that CMS should continue to provide
payment for HCPCS code L8680 until non-facility PE inputs for CPT code
63650 including the leads have been developed.
Response: We appreciate the commenter's concerns. We would continue
a mechanism to provide payment for the disposable leads used in
furnishing the service while we develop non-facility PE inputs. We also
agree that once a practice expense payment reflects these disposable
leads, that a separate payment mechanism would no longer be necessary.
Comment: The AMA RUC agreed that the direct practice expense inputs
for the service should be reviewed to establish appropriate inputs in
both the facility and nonfacility setting.
After consideration of the comments we received regarding our
proposal to establish nonfacility PE RVUs for CPT code 63650
(Percutaneous implantation of neurostimulator electrode array,
epidural), we continue to believe that it would be appropriate to do so
since these services are being furnished in the nonfacility setting.
The AMA RUC expects to review the direct PE inputs for this service
during CY 2013. We anticipate receiving recommendations from the AMA
RUC for the CY 2014 PFS, and we request comments from other
stakeholders regarding the appropriate direct PE inputs for this
service

B. Potentially Misvalued Codes Under the Physician Fee Schedule

1. Valuing Services Under the PFS
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.'' 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 II.B.1.b. and II.B.1.c. of this
final rule with comment period, 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)(1)(C) of the Act defines the malpractice component as ``the
portion of the resources used in furnishing the service that reflects
malpractice expenses in furnishing the service.'' Clause (ii) and
clause (iii) of section 1848 (c)(2)(C) of the Act specify that PE and
malpractice expense RVUs shall be determined based on the relative PE/
malpractice expense resources involved in furnishing the service.
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 potentially misvalued codes and make appropriate adjustments
to the relative values of those services identified as being
potentially misvalued. Section 1848(c)(2)(K) to the Act 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 1848(c)(2)(L) of the Act
requires the Secretary to develop a process to validate the RVUs of
certain potentially misvalued codes under the PFS, identified using the
same criteria used to identify potentially misvalued codes, and to make
appropriate adjustments.
As discussed in section I.B.1.a. of this final rule with comment
period, each year we develop and propose appropriate adjustments to the
RVUs, taking into account the recommendations provided by the American
Medical Association Specialty Society Relative Value Scale Update
Committee (AMA RUC), the Medicare Payment Advisory Commission (MedPAC),
and others. For many years, the AMA RUC has provided us with
recommendations on the appropriate relative values for new, revised,
and potentially misvalued PFS services. We review these recommendations
on a code-by-code basis and consider these recommendations in
conjunction with the recommendations of other public commenters, and
with analyses of data sources, such as claims data, to inform the
decision-making process as authorized by the law. We may also consider
analyses of physician time, work RVUs, or direct PE inputs using other
data sources, such as 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. In addition to considering the most recently available data,
we also assess the results of physician surveys and specialty
recommendations submitted to us by the AMA RUC. We conduct a clinical
review to assess the appropriate RVUs in the context of contemporary
medical practice. 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

[[Page 68910]]

results of consultations with organizations representing physicians. In
accordance with section 1848(c) of the Act, we determine appropriate
adjustments to the RVUs, explain the basis of these adjustments, and
respond to public comments in the PFS proposed and final rules.
2. Identifying, Reviewing, and Validating the RVUs of Potentially
Misvalued Services on 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 PFS, 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 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 as physicians build experience
furnishing that service. Services can also become overvalued when PEs
decline. This can happen when the costs of equipment and supplies fall,
or when equipment is used more frequently than is estimated in the PE
methodology, reducing its cost per use. Likewise, services can become
undervalued when physician work increases or PEs 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 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 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 and families of codes that have experienced
substantial changes in PEs;
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 PFS (the so-called `Harvard-valued codes'); and
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 any RVU 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 PFS.
In addition to these requirements, section 3003(b)(1) of the Middle
Class Tax Relief and Job Creation Act of 2012 (MCTRJCA) (Pub. L. 112-
96), requires that the Secretary conduct a study that examines options
for bundled or episode-based payment to cover physicians' services
currently paid under the PFS under section 1848 of the Act for one or
more prevalent chronic conditions or episodes of care for one or more
major procedures. In conducting the study, the Secretary shall consult
with medical professional societies and other relevant stakeholders.
Additionally, the study shall include an examination of related private
payer payment initiatives. This section also requires that not later
than January 1, 2013, the Secretary submit to certain committees of the
Congress a report on the study. The report shall include
recommendations on suitable alternative payment options for services
paid under the PFS and on associated implementation requirements.
Bundling is one method for aligning incentives for hospitals, post-
acute care providers, physicians, and other practitioners to partner
closely across all specialties and settings that a patient may
encounter to improve the patient's experience of care. The typical
goals of developing an effective bundled payment system are to improve
quality, reduce costs, and promote efficiency. Current work on bundling
services paid under the PFS to date has been limited to targeting
specific codes and sets of codes and repackaging those codes into
``bundles.'' As detailed above, through the potentially misvalued codes
initiative we are currently identifying for review codes that are
frequently billed together and codes with low relative values billed in
multiples. Many of the codes identified through these screens have been
referred to the CPT Editorial Panel for the development of a
comprehensive or bundled code, and several bundled codes have already
been created and valued. However, we believe that we now need to move
beyond this ``repackaging'' of codes and examine the potential of a
larger bundled payment within the PFS. In response to section
3003(b)(1) of the MCTRJCA, we have consulted with medical professional
societies, private payers, healthcare system administrators, and other
stakeholders; met with other CMS staff involved in other bundling
initiatives; and performed an extensive literature review.
Additionally, we have had representatives of specialty groups such as
radiation oncologists volunteer to work with us to create a bundled
payment for their services. If we were to engage in a bundling project
for radiation therapy, we would want to do more than provide a single
episode payment for the normal course of radiation therapy that
aggregates the sum of the individual treatments. Radiation therapy has
many common side effects that can vary based on the type of cancer the
patient has and how it is being treated. Common side effects associated
with radiation therapy include fatigue, skin problems, eating problems,
blood count changes, emotional issues such as depression, etc* * * If
we were to engage in a bundling project that includes radiation
therapy, we would be interested in exploring whether it could also
include treating and managing the side effects

[[Page 68911]]

that result from radiation therapy in addition to the radiation therapy
itself. Such an episode-based payment would allow Medicare to pay for
the full course of the typical radiation therapy as well as the many
medical services the patient may be receiving to treat side effects.
We will continue to examine options for bundled or episode-based
payments and will include our recommendations and implementation
options in our report to the Congress. Following completion of this
report, we will look forward with interest to the view of stakeholders
that are interested in testing some of these concepts within the PFS.
b. Progress in Identifying and Reviewing Potentially Misvalued Codes
In accordance with our statutory mandate, we have 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. In the current process, we
identify potentially misvalued codes for review, and request
recommendations from the AMA RUC and other public commenters on revised
work RVUs and direct PE inputs for those codes. The AMA RUC, through
its own processes, identifies potentially misvalued codes for review,
and through our public nomination process for potentially misvalued
codes established in the CY 2012 PFS final rule, other individuals and
stakeholder groups submit nominations for review of potentially
misvalued codes as well.
Since CY 2009, as a part of the annual potentially misvalued code
review and Five-Year Review processes, we have reviewed over 1,000
potentially misvalued codes to refine work RVUs and direct PE inputs.
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 have included codes in all seven categories specified in
section 1848(c)(2)(K)(ii) of the Act, listed above. A more detailed
discussion of the extensive prior reviews of potentially misvalued
codes is included in the CY 2012 PFS final rule with comment period (76
FR 73052 through 73055).
In the CY 2012 final rule with comment period, under the
potentially misvalued codes category of ``Other codes determined to be
appropriate by the Secretary,'' we finalized our proposal to review a
list of the highest PFS expenditure services, by specialty, that had
not been recently reviewed (76 FR 73059 through 73068). In the CY 2012
final rule with comment period we also finalized policy to consolidate
the periodic reviews of physician work and PE at the same time (76 FR
73055 through 73958), and established a process for the annual public
nomination of potentially misvalued services to replace the Five-Year
review process (76 FR 73058 through 73059). Below we discuss the CY
2013 PFS proposals that support our continuing efforts to appropriately
identify, review, and adjust values for potentially misvalued codes.
c. Validating RVUs of Potentially Misvalued Codes
In addition to identifying and reviewing potentially misvalued
codes, section 1848(c)(2)(L) of the Act specifies that the Secretary
shall establish a formal process to validate RVUs 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 also include validation of the pre-, post-, and intra-
service time components of work. The Secretary is directed, as part of
the validation, 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) and CY 2012 PFS
proposed rule (76 FR 42790), we solicited public comments on possible
approaches, methodologies, and data sources that we should consider for
a validation process. A summary of the comments along with our
responses are included in the CY 2011 PFS final rule with comment
period (75 FR 73217) and the CY 2012 PFS final rule with comment period
(77 FR 73054 through 73055). In September 2012 we entered into two
contracts to assist us in validating RVUs of potentially misvalued
codes; the implementation details for these contracts are currently
under development. Contractors will explore models for the validation
of physician work under the PFS, both for new and existing services. We
plan to discuss these models further in future rulemaking.
d. Improving the Valuation of the Global Surgical Package
(1) Background
We applied the concept of payment for a global surgical package
under the PFS at its inception on January 1, 1992 (56 FR 59502). For
each global surgical procedure, we establish a single payment, which
includes payment for a package of all related services typically
furnished by the surgeon furnishing the procedure during the global
period. Each global surgery is paid on the PFS as a single global
surgical package. Each global surgical package payment rate is based on
the work necessary for the typical surgery and related pre- and post-
operative work. The global period may include 0, 10, or 90 days of
post-operative care, depending on the procedure. For major procedures,
those with a 90-day global period, the global surgical package payment
also includes services typically furnished the day prior to the day of
surgery.
Some global surgical packages have been valued by adding the RVU of
the surgical procedure and all pre- and post-operative evaluation and
management (E/M) services included in the global period. Others have
been valued using magnitude estimation, in which case the overall RVU
for the surgical package was determined without factoring in the
specific RVUs associated with the E/M services in the global period.
The number and level of E/M services identified with a global surgery
payment are based on the typical case. Even though a surgical package
may have been developed with several E/M services included, a physician
is not required to furnish each pre- or post-operative visit to bill
for the global surgical package.
Similar to other bundled services on the PFS, when a global surgery
code is billed, the bundled pre- and post-operative care is not
separately payable; surgeons or other physicians billing a surgical
procedure, cannot separately bill for the E/M services that are
included in the global surgical package.
(2) Measuring Post-Operative Work
The use of different methodologies for valuing global surgical
packages since 1992 has created payment rates that reflect a wide range
of E/M services within the post-operative period. This is especially
true among those with 90-day global periods. More recently reviewed
codes tend to have fewer E/M services in the global period, and the
work RVUs of those E/M services are often

[[Page 68912]]

accounted for in the value for the global surgical package. The values
of global surgical packages reviewed less recently frequently do not
appear to include the full work RVUs of each E/M service in the global
surgical package, and the numbers of E/M services included in the post-
operative period can be inconsistent within a family of procedures.
In 2005, the HHS Office of Inspector General (OIG) examined whether
global surgical packages are appropriately valued. In its report on eye
and ocular surgeries, ``National Review of Evaluation and Management
Services Included in Eye and Ocular Adnexa Global Surgery Fees for
Calendar Year 2005'' (A-05-07-00077), the OIG reviewed a sample of 300
eye and ocular surgeries, and counted the actual number of face-to-face
services in the surgeons' medical records to establish whether the
surgeon furnished post-operative E/M services. The OIG findings show
that surgeons typically furnished fewer E/M services in the post-
operative period than were identified with the global surgical package
payment for each procedure. A smaller percentage of surgeons furnished
more E/M services than were identified with the global surgical package
payment. The OIG could only review the number of face-to-face services
and was not able to review the level of the E/M services that the
surgeons furnished due to a lack of documentation in surgeons' medical
records. The OIG concluded that the RVUs for the global surgical
package are too high because they include the work of E/M services that
are not typically furnished within the global period for the reviewed
procedures.
Following the 2005 report, the OIG continued to investigate E/M
services furnished during the global surgical period. In May 2012, the
OIG published a report titled ``Musculoskeletal Global Surgery Fees
Often Did Not Reflect the Number of Evaluation and Management Services
Provided'' (A-05-09-00053). For this investigation, the OIG sampled 300
musculoskeletal global surgeries and again found that, for the majority
of sampled surgeries, physicians furnished fewer E/M services than were
identified as part of the global period for that service. Once again, a
smaller percentage of surgeons furnished more E/M services than were
identified with the global surgical package payment. The OIG concluded
that the RVUs for the global surgical package are too high because they
include the work of E/M services that are not typically furnished
within the global period for the reviewed procedures.
In both reports, the OIG recommended that we adjust the number of
E/M services identified with the global surgical payments to reflect
the number of E/M services that are actually being furnished. Under the
PFS, we do not ask surgeons to detail the component bundled services on
their claim when billing for the global surgical package as we do
providers furnishing bundled services under other Medicare payment
systems. Since it is not necessary for a surgeon to identify the level
or CPT code of the E/M services actually furnished during the global
period, there is very limited documentation on the frequency or level
of post-operative services. Without sufficient documentation, a review
of the medical record cannot accurately determine the number or level
of E/M services furnished in the post-operative period. This is an area
of concern, and is discussed in more detail later in this section.
As noted above, section 1848(c)(2)(K) of the Act, which codified
and expanded the potentially misvalued codes initiative that CMS had
begun, requires that the Secretary identify and review potentially
misvalued services with an emphasis on several categories, and
recognizes the Secretary's discretion to identify additional
potentially misvalued codes. Several of the categories of potentially
misvalued codes support better valuation of global surgical package
codes. We have made efforts to prioritize the review of RVUs for
services on the PFS that have not been reviewed recently or for
services where there is a potential for misuse. One of the priority
categories for review of potentially misvalued codes is services that
have not been subject to review since the implementation of the PFS
(the so-called ``Harvard-valued codes''). In the CY 2009 PFS proposed
rule, we requested that the AMA RUC engage in an ongoing effort to
review the remaining Harvard-valued codes, focusing first on the high-
volume codes (73 FR 38589). For the Fourth Five-Year Review (76 FR
32410), we requested that the AMA RUC review services that have not
been reviewed since the original implementation of the PFS with
utilization greater than 30,000 (Harvard-valued--Utilization > 30,000).
In the CY 2013 PFS proposed rule, we proposed to review Harvard-valued
services with annual allowed charges that totaled at least $10,000,000
(Harvard-valued--Allowed charges >=$10,000,000), and requested
recommendations from the AMA RUC and other public commenters on
appropriate values for these services (77 FR 44741).
Of the more than 1,000 identified potentially misvalued codes, just
over 650 are surgical services with a global period of 0, 10, or 90
days. We have completed our review of 450 of these potentially
misvalued surgical codes. As we stated in the CY 2013 PFS proposed
rule, these efforts are important, but we believe the usual review
process does not go far enough to assess whether the valuation of
global surgical packages reflects the number and level of post-
operative services that are typically furnished. To support our
statutory obligation to identify and review potentially misvalued
services and to respond to the OIG's concern that global surgical
package payments are misvalued, we believe that we should gather more
information on the E/M services that are typically furnished with
surgical procedures. Information regarding the typical work involved in
surgical procedures with a global period is necessary to evaluate
whether certain surgical procedures are appropriately valued. While the
AMA RUC reviews and recommends RVUs for services on the PFS, we
complete our own assessment of those recommendations, and may adopt
different RVUs. However, for procedures with a global period, the lack
of detail in claims data and documentation restrict our ability to
review and assess the appropriateness of their RVUs.
In the CY 2013 proposed rule, we requested comments on methods of
obtaining accurate and current data on E/M services furnished as part
of a global surgical package. We stated that we were especially
interested in and invited comments on a claims-based data collection
approach that would include reporting E/M services furnished as part of
a global surgical package, as well as other valid, reliable,
generalizable, and robust data to help us identify the number and level
of E/M services typically furnished in the global surgical period for
specific procedures.
The following is summary of the comments we received regarding the
methods of obtaining accurate and current data on E/M services
furnished as part of a global surgical package proposal.
Comment: Several commenters stated that the global payment
methodology has restricted CMS' ability to audit the accuracy of the
current value of services as well as the accuracy of the AMA RUC
recommendations for services with a global period. Many commenters
offered recommendations on how CMS could validate the current global
surgical packages or obtain accurate and current data on E/M services
furnished as a part

[[Page 68913]]

of the global surgical package. Some commenters recommended that CMS
establish auditable documentation requirements for inpatient and
outpatient post-operative visits, and many believed that these
auditable post-operative visit notes should follow E/M documentation
guidelines. Other commenters suggested that CMS adjust all surgical
services to a 0-day global period, require surgeons to bill post-
operative E/M services separately for payment purposes, and subject
those billings to the same coding and documentation standards and
audits to which other practitioners are already subject. Several
commenters noted that CMS could validate the global surgical packages
with the hospital Diagnosis-Related Group (DRG) length of stay data,
and that CMS could explore the use of surgical specialties' registries
to collect data on services furnished within the global period.
Commenters also suggested that CMS could draw upon the OIG's approach
and review the medical record for a statistically valid sample of
claims and then extrapolate those results to clinically similar
families of codes. One commenter suggested that CMS could establish G-
codes through which a large sample of surgeons might report the number
and intensity of post-operative visits.
In response to our request for comments on methods of obtaining
accurate and current data on E/M services furnished as part of a global
surgical package, some commenters stated that they believe post-
operative work is appropriately surveyed, vetted and valued by the AMA
RUC during its ongoing reviews of surgical procedures, and therefore,
claims-based reporting is unnecessary in order to verify that the
number of visits assigned to global surgical procedures is accurate.
Some commenters stated that if CMS has concerns with a specific code,
or group of codes, regarding the number of E/M visits valued within the
physician work RVU, CMS should work with the AMA RUC to review these
services. One commenter noted that there are 4,258 CPT codes on the PFS
with a global period, but that only 271 of these CPT codes are billed
more than 10,000 times annually, and most of the 271 CPT codes have
been reviewed by CMS and the AMA RUC since 2005.
Response: We thank the commenters for their recommendations on this
important issue. We will carefully weigh all comments received as we
consider how best to measure the number and level of visits that occur
during the global period.
In addition to the broader comments on measuring post-operative
work, we also received a comment from the AMA RUC noting that the
hospital and discharge management services included in the global
period for many surgical procedures may have been inadvertently removed
from the time file in 2007. With its comment letter, the AMA RUC sent
us a revised time file with updated post-operative visits for the
services that may be incorrectly displayed with zero visits. We are
reviewing this file, and if appropriate, we intend to propose
modifications to the physician time file in the CY 2014 PFS proposed
rule. We note that should time have been removed from the physician
time file inadvertently, it would not have affected the physician work
RVUs or direct practice expense inputs for these services. It would
have a small impact on the indirect allocation of practice expense at
the specialty level, which we will review when we explore this
potential time file change.
3. CY 2013 Identification and Review of Potentially Misvalued Services
a. Public Nomination of Potentially Misvalued Codes
In the CY 2012 PFS final rule, we finalized a public nomination
process for potentially misvalued codes (76 FR 73058). Under the
previous Five-Year Reviews for PE and work, we invited the public 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 established a process by which the
public can submit codes, along with documentation supporting the need
for review, on an annual basis. Stakeholders may nominate potentially
misvalued codes for review 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. Supporting
documentation for codes nominated for the annual review of potentially
misvalued codes may include 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; and
physician time.
Evidence of an anomalous relationship between the code
being proposed for review and other codes.
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 System
(PQRS) databases).
National surveys of physician time and intensity from
professional and management societies and organizations, such as
hospital associations.
Under this newly established process, 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 evaluate the
supporting documentation and assess whether the submitted codes appear
to be potentially misvalued codes appropriate for review under the
annual process. In the following year's PFS proposed rule, we publish
the list of nominated codes, and propose -which nominated codes will be
reviewed as potentially misvalued. We encourage the public to submit
nominations for potentially misvalued codes in the 60-day comment
period following the publication of this CY 2013 PFS final rule with
comment period.

[[Page 68914]]

Table 4--CPT Codes Nominated as Potentially Misvalued for CY 2013
Rulemaking
------------------------------------------------------------------------
CPT Code Short descriptor CMS Action
------------------------------------------------------------------------
33282.................... Implant pat-active Establish nonfacility
ht record. inputs, and review the
work, facility and
nonfacility inputs
together. Not
considered a
potentially misvalued
code.
33284.................... Remove pat-active Establish nonfacility
ht record. inputs, and review the
work, facility and
nonfacility inputs
together. Not
considered a
potentially misvalued
code.
36819.................... Av fuse uppr arm Review as a potentially
basilic. misvalued code.
36825.................... Artery-vein Review as a potentially
autograft. misvalued code.
53445.................... Insert uro/ves nck Interim Final in CY
sphincter. 2012, Final for CY
2013. Comments
addressed in section
II.M.2.a. of this CY
2013 PFS final rule
with comment period.
77336.................... Radiation physics Review as a potentially
consult. misvalued code.
94762.................... Measure blood Adopt direct PE
oxygen level. revisions discussed
below on an interim
final basis for CY
2013.
28820.................... Amputation of toe.. Last reviewed for CY
2012. No further review
required at this time.
28825.................... Partial amputation Last reviewed for CY
of toe. 2012. No further review
required at this time.
35188.................... Repair blood vessel Last reviewed for CY
lesion. 2012. No further review
required at this time.
35612.................... Artery bypass graft Last reviewed for CY
2012. No further review
required at this time.
35800.................... Explore neck Last reviewed for CY
vessels. 2012. No further review
required at this time.
35840.................... Explore abdominal Last reviewed for CY
vessels. 2012. No further review
required at this time.
35860.................... Explore limb Last reviewed for CY
vessels. 2012. No further review
required at this time.
43283.................... Lap esoph Last reviewed for CY
lengthening. 2012. No further review
required at this time.
43327.................... Esoph fundoplasty Last reviewed for CY
lap. 2012. No further review
required at this time.
43328.................... Esoph fundoplasty Last reviewed for CY
thor. 2012. No further review
required at this time.
43332.................... Transab esoph hiat Last reviewed for CY
hern rpr. 2012. No further review
required at this time.
43333.................... Transab esoph hiat Last reviewed for CY
hern rpr. 2012. No further review
required at this time.
43334.................... Transthor diaphrag Last reviewed for CY
hern rpr. 2012. No further review
required at this time.
43335.................... Transthor diaphrag Last reviewed for CY
hern rpr. 2012. No further review
required at this time.
43336.................... Thorabd diaphr hern Last reviewed for CY
repair. 2012. No further review
required at this time.
43337.................... Thorabd diaphr hern Last reviewed for CY
repair. 2012. No further review
required at this time.
43338.................... Esoph lengthening.. Last reviewed for CY
2012. No further review
required at this time.
47563.................... Laparo Last reviewed for CY
cholecystectomy/ 2012. No further review
graph. required at this time.
49507.................... Prp i/hern init Last reviewed for CY
block >5 yr. 2012. No further review
required at this time.
49521.................... Rerepair ing hernia Last reviewed for CY
blocked. 2012. No further review
required at this time.
49587.................... Rpr umbil hern Last reviewed for CY
block > 5 yr. 2012. No further review
required at this time.
49652.................... Lap vent/abd hernia Last reviewed for CY
repair. 2012. No further review
required at this time.
49653.................... Lap vent/abd hern Last reviewed for CY
proc comp. 2012. No further review
required at this time.
49654.................... Lap inc hernia Last reviewed for CY
repair. 2012. No further review
required at this time.
49655.................... Lap inc hern repair Last reviewed for CY
comp. 2012. No further review
required at this time.
60220.................... Partial removal of Last reviewed for CY
thyroid. 2012. No further review
required at this time.
60240.................... Removal of thyroid. Last reviewed for CY
2012. No further review
required at this time.
60500.................... Explore parathyroid Last reviewed for CY
glands. 2012. No further review
required at this time.
95800.................... Slp stdy unattended Last reviewed for CY
2012. No further review
required at this time.
------------------------------------------------------------------------

In the 60 days following the release of the CY 2012 PFS final rule
with comment period, we received nominations and supporting
documentation for review of the codes listed above in Table 4. A total
of 36 CPT codes were nominated. The majority of the nominated codes
were codes for which we finalized RVUs in the CY 2012 PFS final rule.
That is, the RVUs were interim in CY 2011 and finalized for CY 2012, or
proposed in either the Fourth Five-Year Review of Work or the CY 2012
PFS proposed rule and finalized for CY 2012. In the CY 2013 proposed
rule, we noted that under this annual public nomination process it
would be highly unlikely that we would determine that a nominated code
is appropriate for review under the potentially misvalued codes
initiative if it had been reviewed in the years immediately preceding
its nomination since we believe that the best information on the level
of physician work and PE inputs already would have been available
through that recent review. We stated that, nonetheless, we would
evaluate the supporting documentation for each nominated code to
ascertain whether the submitted information demonstrated that the code
is potentially misvalued.
CPT codes 33282 (Implantation of patient-activated cardiac event
recorder) and 33284 (Removal of an implantable, patient-activated
cardiac event recorder) were nominated for review as potentially
misvalued codes. The requestor stated that CPT codes 33282 and 33284
are misvalued in the nonfacility setting because these CPT codes
currently are only priced in the facility setting even though
physicians furnish these services in the office setting. The requestor
asked that we establish appropriate payment for the services when
furnished in a physician's office. Specifically, the requestor asked
that CMS establish nonfacility PE RVUs for these services. In the CY
2013 proposed rule, we stated that we do not consider the lack of
pricing in a particular setting as an indicator of a potentially
misvalued code. However, given that these services are now furnished in
the nonfacility setting, we believe that CPT codes 33282 and 33284
should be reviewed to establish appropriate nonfacility inputs. We
noted, as did the requestor, that the valuation of a service under the
PFS in a particular setting does not address whether those services and
the setting in which they are furnished are medically reasonable and
necessary for a patient's medical needs and condition. We proposed to
review CPT codes 33282 and 33284 and requested recommendations from the
AMA RUC and other public commenters on the appropriate physician work
RVUs (as measured by time and intensity), and facility and nonfacility
direct PE inputs for these services.
Like CPT codes 33282 and 33284, stakeholders requested that we
establish appropriate payment for CPT code 63650 (Percutaneous
implantation of neurostimulator electrode array, epidural) when
furnished in an office

[[Page 68915]]

setting. In the CY 2013 proposed rule, we noted that this request was
not submitted as a potentially misvalued code nomination. However,
given that these services are now furnished in the nonfacility setting,
we stated that we believed CPT code 63650 should be reviewed to
establish appropriate nonfacility inputs. Please see section III.A.3
(Changes to Direct Inputs for Specific Services) for a discussion of
spinal code stimulation trial procedures in the nonfacility setting.
The following is a summary of the comments we received in response
to our proposal to review the physician work, facility, and nonfacility
direct PE inputs for CPT codes 33282 and 33284.
Comment: Several commenters did not support our proposal to review
CPT codes 33282 and 33284. Commenters stated that the very low
utilization in the nonfacility setting does not justify a review of the
codes for nonfacility PE inputs. One commenter noted that physicians
are not interested in furnishing these services in the nonfacility
setting due to concerns for patient safety. Commenters recommended that
we not consider establishing nonfacility PE RVUs for these CPT codes
until additional studies indicate a clinical need to furnish these
services in the nonfacility setting. Additionally, commenters stated
that they do not believe it is necessary to review physician work and
PE in the facility setting, as that was not the concern that the
stakeholder brought forward. The AMA RUC stated that it continues to
support the current work RVUs and facility PE inputs for these
services.
Another commenter recommended that CMS finalize the proposal to
revalue CPT codes 33282 and 33284 in order to establish nonfacility PE
RVUs. The commenter stated that the lack of nonfacility PE RVUs
prevents physicians from furnishing these services in the office for
select patients for whom this setting of care is safe and appropriate.
This commenter recommended that CMS maintain the existing work RVUs,
and focus the revaluation on the nonfacility PE inputs. The commenter
requested that CMS remain flexible in its approach to nominated codes
and allow for more expeditious review of codes by not requiring full
provider surveys.
Response: After reviewing the comments received, we are finalizing
our proposal to review the physician work, and facility and nonfacility
direct PE inputs for CPT codes 33282 and 33284. We acknowledge that we
received very few Medicare claims for these services in the nonfacility
setting in CY 2011; nonetheless, we believe it is appropriate to
consider the relative resources involved in furnishing this service in
the nonfacility setting. We reiterate that the valuation of a service
under the PFS in a particular setting does not address whether those
services and the setting in which they are furnished are medically
reasonable and necessary for a patient's medical needs and condition.
We acknowledge that commenters support the current work and
facility RVUs, however, it is our policy generally to review the
physician work, facility, and nonfacility direct PE inputs for each
service together to ensure consistency in the inputs used to value the
service. Based on information provided by the requestor and the 2011
nonfacility utilization for this code, we believe it is appropriate to
review this service for nonfacility PE inputs. As explained above, we
intend to review the work and facility inputs as well. Additionally, we
note that the physician work and facility PE inputs for these two
services have not been reviewed in over a decade, so we believe it is
reasonable to assess whether the inputs on which the current payment
rates are based accurately reflect the resources involved in furnishing
these services today. Accordingly, we are finalizing our proposal to
review the physician work, and facility and nonfacility direct practice
expense inputs for CPT codes 33282 and 33284, and request comments on
the appropriate physician work, and facility and nonfacility direct
practice expense inputs for these services.
Traditionally, we have received recommendations from the AMA RUC on
the appropriate physician work, PE, and malpractice inputs for services
CMS plans to review and revalue. However, we understand that the AMA
RUC may not issue recommendations for all codes under review by CMS. In
addition to requesting recommendations from the AMA RUC on services we
intend to review, we request and encourage recommendations on these
services from other public commenters as well. We acknowledge the
requestor's comment that CMS remain flexible in its approach to
nominated codes and not require full practitioner surveys for CPT codes
33282 and 33284. We understand that practitioner surveys regarding
work, malpractice, and PE are not always available, practical, or
reliable. We encourage commenters to submit the best data available on
the appropriate valuation and inputs for the services under review,
including the information listed above under supporting documentation
for the nomination of potentially misvalued codes.
In the CY 2013 proposed rule, we stated that we did not consider
CPT codes 36819 (Arteriovenous anastomosis, open; by upper arm basilic
vein transposition) and 36825 (Creation of arteriovenous fistula by
other than direct arteriovenous anastomosis (separate procedure);
autogenous graft) to be potentially misvalued because these codes were
last reviewed and valued for CY 2012 and the supporting documentation
did not provide sufficient evidence to demonstrate that the codes
should be reviewed as potentially misvalued for CY 2013 or CY 2014. The
following is a summary of the comments we received in response to our
proposal not to review CPT codes 36819 and 36825 as potentially
misvalued codes.
Comment: One commenter reiterated its belief that CPT codes 36819
and 36825 are potentially misvalued because the work RVUs finalized by
CMS in CY 2012 place these services out of rank order with services
that involve similar resources. To support this position, the commenter
provided a list showing these services relative to all services with a
similar global period, intra-service time, and work RVU. The commenter
also restated the rationale previously submitted to CMS when it
nominated these services as potentially misvalued. The commenter
requested that CMS reconsider the work RVUs of these two services.
Response: After reviewing the comments received and conducting a
clinical review of CPT codes 36819 and 36825 alongside similar
services, we agree with the commenter that these services may be out of
rank order and are potentially misvalued. Therefore, we are modifying
our proposal to not review CPT codes 36819 and 36825 as potentially
misvalued codes. We will review CPT codes 36819 and 36825 along with
their code families, which include CPT codes 36818 through 36821 and
CPT codes 36825 through 36830, as potentially misvalued. We thank
commenters for the additional supporting documentation provided, and
request additional comments on the appropriate physician work and
direct PE inputs for these services.
CPT code 53445 (Insertion of inflatable urethral/bladder neck
sphincter, including placement of pump, reservoir, and cuff) was
nominated for review as a potentially misvalued code. CPT code 53445
was identified through the site-of-service anomaly potentially
misvalued code screen for CY 2008. We completed our review and
established RVUs for this

[[Page 68916]]

code on an interim basis for CY 2012 subject to public comment. In the
CY 2013 proposed rule, we stated that we would consider the supporting
documentation submitted under the potentially misvalued code nomination
process for CPT code 53445 as comments on the CY 2012 interim final
value, and would address the comments in the CY 2013 PFS final rule
with comment period when we address the final value of the CPT code. A
summary of the comments received on CPT code 53445 and our response to
those comments is included in section II.M.2 of this final rule with
comment period.
CPT code 77336 (Continuing medical physics consultation, including
assessment of treatment parameters, quality assurance of dose delivery,
and review of patient treatment documentation in support of the
radiation oncologist, reported per week of therapy) was nominated for
review as a potentially misvalued code. The requestor stated that CPT
code 77336 is misvalued because changes in the technique for furnishing
continuing medical physics consultations have resulted in changes to
the knowledge required, time, and effort expended, and complexity of
technology associated with the tasks performed by the physicist and
other staff. Additionally the requestor stated that the direct PE
inputs no longer accurately reflect the resources used to deliver this
service and may be undervalued. CPT code 77336 was last reviewed for CY
2003. In the CY 2013 proposed rule, we stated that after evaluating the
detailed supporting information that the commenter provided, we
believed there may have been changes in technology and other PE inputs
since we last reviewed the service, and that further review is
warranted. As such, we proposed to review CPT code 77336 as potentially
misvalued and requested recommendations from the AMA RUC and other
public commenters on the direct PE inputs for this service and for the
other services within this family of CPT codes.
The following is a summary of the comments we received in response
to our proposal to review CPT code 77336 as potentially misvalued.
Comment: Commenters supported the CMS proposal to review CPT code
77336 and urged CMS to finalize it. The AMA RUC stated that it would
review this service and provide recommendations to CMS on its
valuation. Several commenters reiterated their rationale for why they
believe CPT code 77336 is potentially misvalued and provided supporting
documentation. Additionally, commenters indicated that the American
Society for Physicists in Medicine (AAPM) would submit information on
practice expense inputs and other data to support the revaluation of
this CPT code, and expressed appreciation that CMS is willing to
consider data and input from professional medical societies that do not
participate in the AMA RUC process.
Response: After reviewing the comments received, we continue to
believe that changes in technology may have altered the direct practice
expense inputs associated with CPT code 77336 and are finalizing our
proposal to review this service as potentially misvalued. We thank
commenters for the supporting documentation provided, and request
additional comments on the appropriate direct PE inputs for this
service, as well as any other services that may be within this family
of CPT codes.
CPT code 94762 (Noninvasive ear or pulse oximetry for oxygen
saturation; by continuous overnight monitoring (separate procedure))
was nominated for review as a potentially misvalued code. Requestors
stated that CPT code 94762 is misvalued because the time currently
allocated to the various direct PE inputs does not accurately reflect
current practice. Requestors also stated that independent diagnostic
testing facilities are not appropriately accounted for in the current
indirect PE methodology. In the CY 2013 proposed rule, we stated that,
in response to these stakeholder concerns, we reviewed the PE inputs
for CPT code 94762, which was last reviewed for CY 2010. We believed
that CPT code 94762 is misvalued, and we proposed changes to the PE
inputs for CY 2013. We stated that, following clinical review, we
believed that the current time allocated to clinical labor and supplies
appropriately reflects current practice. However, we believed that 480
minutes (8 hours) of equipment time for the pulse oximetry recording
slot and pulse oximeter with printer are more appropriate for this
overnight monitoring procedure code. As such, we proposed this
refinement to the direct PE inputs for CPT code 94762 for CY 2013.
These proposed adjustments were reflected in the CY 2013 proposed
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
The following is a summary of the comments received regarding the
proposed direct PE adjustments to CPT code 94762.
Comment: Many commenters agreed with CMS' proposal to refine the
equipment minutes for this service to 480 minutes. One commenter
suggested that CMS should increase the proposed allocation of minutes
to account for the time that the equipment is unavailable for use
because the patient has yet to return it to the office.
Response: We appreciate the support for the proposal. We believe
that the appropriate allocation of minutes for the equipment is the sum
of the times within 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. However, we also note that the equipment cost per
minute calculation incorporates a utilization rate assumption that
appropriately accounts for the time the equipment cannot be used
because it is being transported to and from the office or between
patients. Therefore, we are not revising our proposed adjustment to the
equipment time.
Comment: Several commenters supported the proposed allocation of
minutes to the equipment and also submitted invoices and other evidence
for updating the direct PE inputs for the service. The AMA RUC and
others submitted information to update the pulse oximeter and the
recording software used in the service. The information submitted by
the AMA RUC reflects a pulse oximeter priced at $1,418 and recording
software priced at $990. Other commenters submitted various disposable
supplies that might be used to furnish the service, including varying
types of batteries, oximeter cables, and wristbands that might be used
when furnishing this service.
Response: We appreciate the updated information furnished to us by
stakeholders and other commenters. While we generally urge stakeholders
to submit such price update requests through the process for updating
supply and equipment prices we established for CY 2011, because we made
a proposal specifically related to the equipment minutes allocated for
this procedure, we believe it would be appropriate to consider the
supplies and equipment price inputs associated with the service in
conjunction with the proposal to change the equipment minutes. Based on
the invoice information we received from commenters, we will update the
price of the `pulse oximetry recording software (prolonged monitoring)'
(EQ212) and include a new equipment item ``Pulse Oximeter 920 M Plus''
priced at $1,418 as equipment inputs for

[[Page 68917]]

the code. In reviewing the requested supply items to include, we
believe that it would be appropriate to include 6 AA batteries (SK095)
as a disposable supply for the service as well as incorporate a new
item, a disposable oximeter cable, priced at $11.08.
Based on these comments and our clinical review, we are adopting
these direct PE inputs, including our adjusted allocation of equipment
minutes, on an interim basis for CY 2013. These values are reflected in
the CY 2013 PFS direct PE input database available under downloads for
the CY 2013 PFS final rule with comment period on the CMS Web site at:
http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage. We also
note that the PE RVUs included in Addenda B and C reflect these interim
direct PE inputs.
In the CY 2013 proposed rule, we stated that we did not consider
the nominated codes that were last reviewed and valued for CY 2012 to
be potentially misvalued because the supporting documentation did not
provide sufficient evidence to demonstrate that the codes should be
reviewed as potentially misvalued for CY 2013 or CY 2014. The
supporting documentation for these services generally mirrored the
public comments previously submitted, to which CMS has already
responded. Below is a summary of the comments we received in response
to our proposal to not review the CPT codes listed above in Table 4 not
discussed above.
Comment: We received a few limited comments on the nominated codes
not previously discussed above, however, like the code nominations, the
comments and supporting documentation for these services mirrored the
public comments previously submitted, to which CMS has already
responded.
Response: Having received no new information on the CPT codes
listed in Table 4 not previously discussed, we are finalizing our
proposal not to review those services as potentially misvalued.
b. Potentially Misvalued Code Lists
As mentioned above, in the last several annual PFS proposed rules
we have identified lists of potentially misvalued codes for review. We
believe it is imperative that we continue to identify new lists of
potentially misvalued codes for review to appropriately identify,
review, and adjust values for potentially misvalued codes for CY 2013.
(1) Review of Harvard-Valued Services With Medicare Allowed Charges of
$10,000,000 or More
For many years, we have been reviewing `Harvard-valued' CPT codes
through the potentially misvalued code initiative. The RVUs for
Harvard-valued CPT codes have not been reviewed since they were
originally valued in the early 1990s at the beginning of the PFS. While
the principles underlying the relative value scale have not changed,
over time the methodologies we use for valuing services on the PFS have
changed, potentially disrupting the relativity between the remaining
Harvard-valued codes and other codes on the PFS. At this time, nearly
all CPT codes that were Harvard-valued and had Medicare utilization of
over 30,000 allowed services per year have been reviewed. In the CY
2013 PFS proposed rule, we proposed to review Harvard-valued services
with annual Medicare allowed charges of $10 million or greater. The CPT
codes meeting these criteria have relatively low Medicare utilization
(as we have reviewed the services with utilization over 30,000), but
account for significant Medicare spending annually and have never been
reviewed. In the CY 2013 proposed rule, we noted that several of the
CPT codes meeting these criteria have already been identified as
potentially misvalued through other screens and were scheduled for
review for CY 2013. We also recognized that other codes meeting these
criteria had been referred by the AMA RUC to the CPT Editorial Panel.
We stated that, in these cases, we were not proposing re-review of
these already identified services, but for the sake of completeness, we
included those codes as a part of this category of potentially
misvalued services. In our proposal, we recognized that the relatively
low Medicare utilization for these services may make gathering
information on the appropriate physician work and direct PE inputs
difficult. We requested recommendations from the AMA RUC and other
public commenters, and stated that we appreciate efforts expended to
provide RVU and input recommendations to CMS for these lower volume
services. Because survey sample sizes could be small for these lower
volume services, we encouraged the use of valid and reliable
alternative data sources and methodologies when developing recommended
values. In sum, we proposed to review Harvard-valued CPT codes with
annual allowed charges of $10 million or more as a part of the
potentially misvalued codes initiative. In the CY 2013 proposed rule,
we stated that the following codes met the criteria for this screen and
proposed to review these CPT codes as potentially misvalued services.

Table 5--Proposed Harvard-Valued CPT Codes With Annual Allowed Charges
>=$10,000,000
------------------------------------------------------------------------
CPT Code Short descriptor
------------------------------------------------------------------------
13152 *.............................. Repair of wound or lesion.
27446................................ Revision of knee joint.
29823................................ Shoulder arthroscopy/surgery.
36215 **............................. Place catheter in artery.
36245 **............................. Ins cath abd/l-ext art 1st.
43264 **............................. Endo cholangiopancreatograph.
50360................................ Transplantation of kidney.
52353 *.............................. Cystouretero w/lithotripsy.
64450 *.............................. N block other peripheral.
64590................................ Insrt/redo pn/gastr stimul.
66180................................ Implant eye shunt.
67036................................ Removal of inner eye fluid.
67917................................ Repair eyelid defect.
92286 **............................. Internal eye photography.
92982 *.............................. Coronary artery dilation.
95860 *.............................. Muscle test one limb.
------------------------------------------------------------------------
* Scheduled for CY 2012 AMA RUC Review.
** Referred by the AMA RUC to the CPT Editorial Panel.

The following is summary of the comments we received in response to
our proposal to review Harvard-valued CPT codes with annual allowed
charges of $10 million or more as a part of the potentially misvalued
codes initiative.
Comment: Comments on this proposal were specific to the CPT codes
we proposed to review under this potentially misvalued code screen. A
few commenters noted that CPT code 64590 (Insertion or replacement of
peripheral or gastric neurostimulator pulse generator or receiver,
direct or inductive coupling) does not have annual allowed charges that
meet the threshold of $10 million and stated that the code should be
removed from the list. These commenters requested that CMS reexamine
this list to ensure all codes meet the specified criteria. Other
commenters pointed out that certain codes on the list are already
scheduled for review by the medical specialty societies and the AMA
RUC, and that some codes are scheduled for deletion by the CPT
Editorial Panel. The AMA RUC stated that it would discuss the list of
codes that meet the criteria for this screen and would determine the
next steps in the AMA RUC's review of these services.
Response: After reviewing the comments received, and reexamining
the Medicare claims data, we agree with commenters that CPT code 64590
does not have annual Medicare allowed charges of $10 million or
greater, nor do CPT codes 29823 (Arthroscopy,

[[Page 68918]]

shoulder, surgical; debridement, extensive) and 95860 (Needle
electromyography; 1 extremity with or without related paraspinal
areas). In compiling the list, we inadvertently included allowed
charges incurred in the ambulatory surgical center setting. We thank
commenters for bringing this to our attention. Therefore, we have
removed these three services from the proposed list of CPT codes that
are Harvard-value with annual allowed charges of $10 million or
greater.
In the CY 2013 proposed rule, we noted that several codes that met
the criteria for this potentially misvalued code screen were currently
under review for CY 2013 and others were scheduled for review by the
CPT Editorial Panel. CPT codes 13152 (Repair, complex, eyelids, nose,
ears and/or lips; 2.6 cm to 7.5 cm), 52353 (Cystourethroscopy, with
ureteroscopy and/or pyeloscopy; with lithotripsy (ureteral
catheterization is included)), 64450 (Injection, anesthetic agent;
other peripheral nerve or branch), 92286 (Special anterior segment
photography with interpretation and report; with specular endothelial
microscopy and cell count), and 95860 (Needle electromyography; 1
extremity with or without related paraspinal areas) were reviewed for
CY 2013. A discussion of the interim final values for those services is
in section III.M.3. of this final rule with comment period. CPT code
92982 (Percutaneous transluminal coronary balloon angioplasty; single
vessel) has been deleted by the CPT Editorial Panel for CY 2013. We
have updated the list of CPT codes meeting this potentially misvalued
code screen to show the review status of the codes, and to remove the
three CPT codes mentioned above that do not meet the parameters of the
screen. We are finalizing the list of Harvard-valued CPT codes with
annual allowed charges of $10 million or more in Table 6, and for CY
2014, we will review the services not already reviewed. We request
public comments on the appropriate work RVUs and direct practice
expense inputs for these services.

Table 6--Harvard-Valued CPT Codes With Annual Allowed Charges >=$10,000,000
----------------------------------------------------------------------------------------------------------------
CPT code Short descriptor Review status
----------------------------------------------------------------------------------------------------------------
13152.......................... Repair of wound or lesion. Interim Final for CY 2013.
27446.......................... Revision of knee joint.... Review for CY 2014.
36215.......................... Place catheter in artery.. Review for CY 2014.
36245.......................... Ins cath abd/l-ext art 1st Review for CY 2014.
43264.......................... Endo Review for CY 2014.
cholangiopancreatograph.
50360.......................... Transplantation of kidney. Review for CY 2014.
52353.......................... Cystouretero w/lithotripsy Interim Final for CY 2013.
64450.......................... N block other peripheral.. Interim Final for CY 2013.
66180.......................... Implant eye shunt......... Review for CY 2014.
67036.......................... Removal of inner eye fluid Review for CY 2014.
67917.......................... Repair eyelid defect...... Review for CY 2014.
92286.......................... Internal eye photography.. Interim Final for CY 2013.
92982.......................... Coronary artery dilation.. Deleted for CY 2013.
----------------------------------------------------------------------------------------------------------------

(2) Review of Services With Stand Alone PE Procedure Time
Improving the accuracy of procedure time assumptions used in PFS
ratesetting continues to be a high priority of the potentially
misvalued codes initiative. Procedure time is a critical measure of the
resources typically used in furnishing particular services to Medicare
beneficiaries, and procedure time assumptions are an important
component in the development of work and PE RVUs. Discussions in the
academic community have indicated that certain procedure times used for
PFS ratesetting are overstated (McCall, N., J. Cromwell, et al. (2006).
``Validation of physician survey estimates of surgical time using
operating room logs.'' Med Care Res Rev 63(6): 764-777. Cromwell, J.,
S. Hoover, et al. (2006). ``Validating CPT typical times for Medicare
office evaluation and management (E/M) services.'' Med Care Res Rev
63(2): 236-255. Cromwell, J., N. McCall, et al. (2010). ``Missing
productivity gains in the Medicare physician fee schedule: where are
they?'' Med Care Res Rev 67(6): 236-255.) MedPAC and others have
emphasized the importance of using the best available procedure time
information in establishing accurate PFS payment rates. (MedPAC, Report
to the Congress: Aligning Incentives in Medicare, June 2010, p. 230)
In recent years, CMS and the AMA RUC have taken steps to consider
the accuracy of available data regarding procedure times used in the
valuation of the physician work component of PFS payment. Generally,
the AMA RUC derives estimates of physician work time from survey
responses, and the AMA RUC reviews and analyzes those responses as part
of its process for developing a recommendation for physician work.
These procedure time assumptions are also used in determining the
appropriate direct PE input values used in developing nonfacility PE
RVUs. Specifically, physician intra-service time serves as the basis
for allocating the appropriate number of minutes within the service
period to account for the time used in furnishing the service to the
patient. The number of intra-service minutes, or occasionally a
particular proportion thereof, is allocated to both the clinical staff
that assists the physician in furnishing the service and to the
equipment used by either the physician or the staff in furnishing the
service. This allocation reflects only the time the beneficiary
receives treatment and does not include resources used immediately
prior to or following the service. Additional minutes are often
allocated to both clinical labor and equipment resources in order to
account for the time used for necessary preparatory tasks immediately
preceding the procedure or tasks typically performed immediately
following it. For codes without physician work, the procedure times
assigned to the direct PE inputs for such codes assume that the
clinical labor performs the procedure. For these codes, the number of
intra-service minutes assigned to clinical staff is independent and not
based on any physician intra-service time assumptions. Consequently,
the procedure time assumptions for these kinds of services have not
been subject to all of the same mechanisms recently used by the AMA RUC
and physician community in providing recommendations to CMS, and by CMS
in the valuation of the physician work component of PFS payment. These

[[Page 68919]]

independent clinical labor time assumptions largely determine the RVUs
for the procedure. To ensure that procedure time assumptions are as
accurate as possible across the Medicare PFS, we believe that codes
without physician work should be examined with the same degree of
scrutiny as services with physician work.
For CY 2012, a series of radiation treatment services were reviewed
as part of the potentially misvalued code initiative. Among these were
intensity modulated radiation therapy (IMRT) delivery services and
stereotactic body radiation therapy (SBRT) delivery services reported
with CPT codes 77418 (Intensity modulated treatment delivery, single or
multiple fields/arcs, via narrow spatially and temporally modulated
beams, binary, dynamic MLC, per treatment session) and 77373
(Stereotactic body radiation therapy, treatment delivery, per fraction
to 1 or more lesions, including image guidance, entire course not to
exceed 5 fractions), respectively. CPT code 77418 (IMRT treatment
delivery) had been identified as potentially misvalued based on
Medicare utilization data that indicated both fast growth in
utilization and frequent billing with other codes. We identified this
code as potentially misvalued in the CY 2009 PFS proposed rule (73 FR
38586). CPT code 77373 (SBRT treatment delivery) had been identified as
potentially misvalued by the RUC as a recently established code
describing services that use new technologies. There is no physician
work associated with either of these codes since other codes are used
to bill for planning, dosimetry, and radiation guidance. Both codes are
billed per treatment session. Because the physician work associated
with these treatments is reported using codes distinct from the
treatment delivery, the primary determinant of PE RVUs for these codes
is the number of minutes allocated for the procedure time to both the
clinical labor (radiation therapist) and the resource-intensive capital
equipment included as direct PE inputs.
In the CY 2012 PFS final rule with comment period, we received and
accepted without refinement PE recommendations from the AMA RUC for
these two codes. (We received the recommendation for CPT code 77418
(IMRT treatment delivery) too late in 2010 to be evaluated for CY 2011
and it was therefore included in the CY 2012 rulemaking cycle.) The AMA
RUC recommended minor revisions to the direct PE inputs for the code to
eliminate duplicative clinical labor, supplies, and equipment to
account for the frequency with which the code was billed with other
codes. For CPT code 77373 (SBRT treatment delivery), the RUC
recommended no significant changes to the direct PE inputs.
Subsequent to the publication of the final rule, the AMA RUC and
other stakeholders informed CMS that the direct PE input recommendation
forwarded to CMS for IMRT treatment delivery (CPT code 77418)
inadvertently omitted seven equipment items typically used in
furnishing the service. These items had been used as direct PE inputs
for the code prior to CY 2012. There is broad agreement among
stakeholders that these seven equipment items are typically used in
furnishing the services described by CPT code 77418. We were unable to
reincorporate the items for CY 2012. These omitted items are listed in
Table 7. In consideration of the comments from the AMA RUC and other
stakeholders, we proposed to include the seven equipment items omitted
from the RUC recommendation for CPT code 77418. These proposed
adjustments were reflected in the CY 2013 proposed direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS proposed rule with comment period at http://www.cms.gov/PhysicianFeeSched/. We note that the proposed PE RVUs included in
Addendum B reflected the proposed updates.

Table 7--Equipment Inputs Omitted From RUC Recommendation for CPT Code
77418 (IMRT Treatment Delivery)
------------------------------------------------------------------------
Equipment code Equipment description
------------------------------------------------------------------------
ED011............................. computer system, record and verify.
ED035............................. video camera.
ED036............................. video printer, color (Sony medical
grade).
EQ139............................. intercom (incl. master, pt
substation, power, wiring).
ER006............................. IMRT physics tools.
ER038............................. isocentric beam alignment device.
ER040............................. laser, diode, for patient
positioning (Probe).
------------------------------------------------------------------------

It has come to our attention that there are discrepancies between
the procedure time assumptions used in establishing nonfacility PE RVUs
for these services and the procedure times made widely available to
Medicare beneficiaries and the general public. Specifically, the direct
PE inputs for IMRT treatment delivery (CPT code 77418) reflect a
procedure time assumption of 60 minutes. These procedure minutes were
first assigned to the code for CY 2002 based on a recommendation from
the AMA RUC indicating that the typical treatment time for the IMRT
patient was 40 to 70 minutes. The most recent RUC recommendation that
CMS received for CY 2012 rulemaking supported the procedure time
assumption of 60 minutes.
Information available to Medicare beneficiaries and the general
public indicates that IMRT sessions typically last between 10 and 30
minutes. For example, the American Society for Radiation Oncology
(ASTRO) publishes a patient fact sheet that explains that for all
external beam radiation therapy, including IMRT, ``treatment is
delivered in a series of daily sessions, each about 15 minutes long.''
[``Radiation Therapy for Prostate Cancer: Facts to Help Patients Make
an Informed Decision'' available for purchase at www.astro.org/MyASTRO/Products/Product.aspx?AstroID=6901.] This fact sheet is intended for
patients with prostate cancer, the typical diagnosis for Medicare
beneficiaries receiving IMRT. Similarly, the American College of
Radiology (ACR) and the Radiological Society of North America (RSNA)
co-sponsor a Web site for patients called http://radiologyinfo.org that
states that IMRT ``treatment sessions usually take between 10 and 30
minutes.''
The direct PE inputs for SBRT treatment delivery (CPT code 77373)
reflect a procedure time assumption of 90 minutes. These procedure
minutes were first assigned to the code for CY 2007 based on a
recommendation from the AMA RUC. The most recent RUC recommendation
that CMS received for CY 2012 rulemaking supported continuing that
procedure time assumption.
In 2012, information available to Medicare beneficiaries and the
general public states that SBRT treatment typically lasts no longer
than 60 minutes. For example, the American College of Radiology (ACR)
and the Radiological Society of North America (RSNA) Web site, http://radiologyinfo.org, states that SBRT ``treatment can take up to one
hour.''
Given the importance of the procedure time assumption in the
development of RVUs for these services, using the best available
information is critical to ensuring that these services are valued
appropriately. We believe medical societies and practitioners strive to
offer their cancer patients accurate information regarding the IMRT or
SBRT treatment experience. Therefore, we believe that the typical
procedure time for IMRT delivery is between 10 and 30 minutes and that
the

[[Page 68920]]

typical procedure time for SBRT delivery is under 60 minutes. The
services are currently valued using procedure time assumptions of 60
and 90 minutes, respectively. We believe these procedure time
assumptions, distinct from necessary preparatory or follow-up tasks by
the clinical labor, are outdated and need to be updated using the best
information available.
While we generally have not used publicly available resources to
establish procedure time assumptions, we believe that the procedure
time assumptions used in setting payment rates for the Medicare PFS
should be derived from the most accurate information available. In the
case of these services, we believe that the need to reconcile the
discrepancies between our existing assumptions and more accurate
information outweighs the potential value in maintaining relativity
offered by only considering data from one source. We proposed to adjust
the procedure time assumption for IMRT delivery (CPT code 77418) to 30
minutes. We proposed to adjust the procedure time assumption for SBRT
delivery (CPT code 77373) to 60 minutes. These procedure time
assumptions reflect the maximum number of minutes reported as typical
in publicly available information. We note that in the case of CPT code
77418, the `accelerator, 6-18 MV' (ER010) and the `collimator,
multileaf system w-autocrane' (ER017) are used throughout the procedure
and currently have no minutes allocated for preparing the equipment,
positioning the patient, or cleaning the room. Since these clinical
labor tasks are associated with related codes typically reported at the
same time, we also proposed to allocate minutes to these equipment
items to account for their use immediately before and following the
procedure. All of these proposed adjustments are reflected in the CY
2013 proposed direct PE input database, available on the CMS Web site
under the downloads for the CY 2013 PFS final rule with comment period
at http://www.cms.gov/PhysicianFeeSched/. We also note that the
proposed PE RVUs included in Addendum B reflect the proposed updates.
We requested recommendations from the AMA RUC and other public
commenters on the direct PE inputs for these services.
While we recognize that using these procedure time assumptions will
result in payment reductions for these particular services, we believe
such changes are necessary to appropriately value these services.
Recent attention from popular media sources like the Wall Street
Journal (online.wsj.com/article/SB10001424052748703904804575631222900534954.html December 7, 2010) and
the Washington Post (www.washingtonpost.com/wp-dyn/content/article/2011/02/28/AR2011022805378.html) February 28, 2011 has encouraged us to
consider the possibility that potential overuse of IMRT services may be
partially attributable to financial incentives resulting from
inappropriate payment rates. In its 2010 Report to Congress, MedPAC
referenced concerns that financial incentives may influence how cancer
patients are treated. In the context of the growth of ancillary
services in physicians' offices, MedPAC recommended that improving
payment accuracy for discrete services should be a primary tool used by
CMS to mitigate incentives to increase volume (Report to Congress:
Aligning Incentives in Medicare, June 2010, p. 225). We note that in
recent years, PFS nonfacility payment rates for IMRT treatment delivery
have exceeded the Medicare payment rate for the same service paid
through the hospital Outpatient Prospective Payment System (OPPS),
which includes packaged payment for image guidance also used in
treatment delivery. We believe that such high-volume services that are
furnished in both nonfacility and facility settings are unlikely to be
more resource-intensive in freestanding radiation therapy centers or
physicians' offices than when furnished in facilities like hospitals
that generally incur higher overhead costs, maintain a 24 hour, 7 day
per week capacity, are generally paid in larger bundles, and generally
furnish services to higher acuity patients than the patients who
receive services in physicians' offices or freestanding clinics. Given
that the OPPS payment rates are based on auditable data on hospital
costs, we believe the relationship between the OPPS and nonfacility PFS
payment rates reflects inappropriate assumptions within the current
direct PE inputs for CPT code 77418. The AMA RUC's most recent direct
PE input recommendations reflect the same procedure time assumptions
used in developing the recommendations for CY 2002. However, we believe
that using procedure time assumptions that reflect the maximum times
reported as typical to Medicare beneficiaries will improve the accuracy
of those inputs and the resulting nonfacility payment rates.
We received many comments regarding our proposal to change the
direct PE inputs for CPT codes 77418 and 77373 based on amended
procedure time assumptions and consideration of the comments from the
AMA RUC and other stakeholders to include the seven equipment items
omitted from the previous AMA RUC recommendation for CPT code 77418.
The following is summary of the comments we received and our responses
to those comments.
Comment: Several commenters agreed with CMS' proposal to add the
equipment items omitted from the AMA RUC recommendation for CPT code
77418 to the code.
Response: We appreciate the support for that aspect of the
proposal.
Comment: Many commenters disagreed with CMS' proposal to adjust the
procedure time assumptions for these services. Some of these commenters
stated that 35 minutes was a more appropriate estimate, but none
presented alternative sources of objective information for determining
accurate procedure time assumptions. Many commenters objected to CMS'
proposal on the basis that the agency used publicly available
information to adjust procedure times assumptions instead of basing its
proposal on information developed through the AMA RUC process. These
commenters stated that CMS should not finalize its proposed procedure
time assumptions for one of four reasons: publicly available procedure
time information does not consider the time resources required prior to
or following the procedure, that educational information for patients
is an inappropriate data source because such material is not subject to
the same degree of scrutiny by the medical community as the information
presented to the AMA RUC, that CMS only has the authority to review or
revalue PFS services through the AMA RUC process, or that time has been
universally inflated by the AMA RUC so that using more accurate time
assumptions in setting the RVUs for these services would distort their
value relative to other PFS services.
Response: We appreciate the commenters' interest in CMS using the
best available data to identify the time resources required to furnish
services to Medicare beneficiaries. We address commenters' objections
to using these patient education materials in the comment summaries and
response paragraphs that follow.
Comment: Many commenters stated that patient education materials
are not an appropriate source of data because the procedure times
conveyed through such materials may not fully account for the time
spent positioning the patient for treatment, performing safety checks
or the work that occurs before and after treatment. Several commenters
explicitly stated that it is highly likely

[[Page 68921]]

that the patient education materials describe only the time the patient
is on the treatment table.
Response: We understand that the procedure times cited in the
patient education materials may not include the full time for preparing
the equipment, positioning the patient or other necessary work required
prior to or following the procedure. The procedure time assumptions
used in developing direct PE inputs only account for a portion of the
service period minutes allocated to the clinical labor or the equipment
direct PE inputs. For example, in our proposal to reduce procedure time
assumptions for CPT code 77418, we allocated an additional seven
minutes to the equipment beyond the procedure time assumption for
additional tasks. These minutes reflect the standard minutes usually
recommended by the RUC for these tasks. For example, for CY 2013 the
AMA RUC recommended these minutes for direct PE inputs for CPT code
31231 (Nasal endoscopy, diagnostic, unilateral or bilateral (separate
procedure), CPT code 52287 (Cystourethroscopy with injection(s) for
chemodenervation of the bladder), CPT code 65800 (Paracentesis of
anterior chamber of eye (separate procedure); with diagnostic
aspiration of aqueous), and CPT code 11311 (Shaving of epidermal or
dermal lesion, single lesion, face ears, eyelid, nose, lips, mucous
membrane; lesion diameter 0.6 to 1.0 cm).
We also note that the direct PE inputs for codes describing imaging
guidance services that are typically reported at the same time-include
minutes for the radiation therapist to prepare the room, position the
patient, and clean the room. Similarly, the proposed direct PE inputs
for CPT code 77373 incorporate clinical labor and equipment minutes
that exceed the minutes assumed for the procedure itself: 24 minutes of
additional nurse time, 24 minutes of additional time for the radiation
therapist, and 15 additional minutes for the medical physicist for pre-
service and post-service tasks. On the basis of these tasks, the
equipment associated with the code has also been allocated 24 minutes
beyond the procedure time assumption for pre-service and post-service
work. Therefore, we do not agree with commenters who suggested that our
proposed revisions are inappropriate because the procedure time
reported in the patient education materials may underestimate the
procedure time assumptions used in developing direct PE inputs.
Instead, we believe that the typical procedure time described in the
patient education material is generally equivalent to the minutes
incorporated in the service period for performing the procedure. We
already have incorporated additional minutes of clinical labor time
into the direct PE inputs for both CPT codes 77418 and 77373 to account
for tasks like preparing the equipment and cleaning the room in
addition to the minutes allocated for the procedure time assumptions.
This reflects the direct PE inputs used for most services, where we
allocate minutes to clinical labor and medical equipment for
preparatory or follow-up tasks in addition to the equipment time
allocated based on the procedure time assumption. While many commenters
stated that the procedure times reported in the publicly available
information do not include necessary preparatory or follow-up tasks, we
received no comments with specific objections to the number of minutes
allocated for such tasks in conjunction with our proposal.
Comment: The AMA RUC and some medical specialty societies expressed
opposition to CMS using patient education materials in the process of
setting Medicare payment rates. These commenters claimed that such
information is not evaluated by the same standards applied to the
extant data used as part of the AMA RUC process, so that CMS' use of
these materials is ill-conceived.
Response: As we stated previously, we believe medical societies and
practitioners strive to offer their cancer patients accurate
information regarding the IMRT or SBRT treatment experience. We believe
that such information, especially for high-volume services, is more
likely to reflect typical treatment times than information proffered
solely for the purpose of developing payment rates. While many
commenters objected in principle to the validity of the patient
education materials, we do not believe that medical specialty societies
and providers of care would broadly inform their patients that IMRT
treatment would last between 10 and 30 minutes per session if the
typical treatment session actually lasted for one hour or that SBRT
treatment would last for no more than one hour if it typically takes 90
minutes.
Comment: Many commenters claimed that CMS has the responsibility to
conduct a comprehensive, empirical review of those procedure time
assumptions utilizing the AMA RUC if CMS has concerns with those
assumptions.
Response: We agree that AMA RUC review and recommendations are one
important component in constructing payment rates under the physician
fee schedule. While we do not agree with the commenters' statement that
CMS has a responsibility to conduct all reviews of potentially
misvalued codes through the AMA RUC process exclusively, we note the
AMA RUC reviewed both CPT codes 77418 and 77373 as recently as 2010.
Both of these services had been identified under our potentially
misvalued code initiative. As noted above, the AMA RUC recommended
minor revisions to the direct PE inputs for the code to eliminate
duplicative clinical labor, supplies, and equipment to account for the
frequency with which the code was billed with other codes. For CPT code
77373 (SBRT treatment delivery), the AMA RUC recommended no significant
changes to the direct PE inputs. We note that in response to this
proposal, the AMA RUC has recently informed us that since there is no
physician work associated with these codes, it has asked the relevant
specialty society to conduct a survey for clinical staff time, in order
to ensure accurate procedure times.
Comment: Some commenters stated that CMS should only consider the
accuracy of these procedure time assumptions relative to the procedure
time estimates for other services. Some of these commenters claimed
that procedure time assumptions for services across the PFS are
inflated so that CMS should not use procedure time assumptions for
these services that are also exaggerated.
Response: We appreciate the commenters' concerns with maintaining
the relativity of time used in developing relative value units. We
understand that procedure times may be overestimated for some other PFS
services. While we agree that maintaining the resource relativity of
services within the payment system is very important, we also believe
that there is no practical means for CMS or stakeholders to engage in a
complete simultaneous review of time assumptions across all payable
codes. As such, we must evaluate times (and other factors) and make
adjustments in smaller increments when we find that adjustments are
warranted. We strive to maintain relativity by reviewing all RVU
components for a code or reviewing all codes within families where
appropriate. Furthermore, we believe that our proposal to use more
accurate procedure time assumptions for these services should be
considered in the context of broader efforts to improve the accuracy of
PFS relative values, where time is a significant component of
developing relative values.
Since MedPAC's March 2006 Report to the Congress, CMS has
implemented a potentially misvalued codes initiative

[[Page 68922]]

and has taken significant steps to identify and address potentially
misvalued codes, including establishing physician times that accurately
reflect the resources involved in furnishing the service. For example,
CMS has reduced the physician times for services that were originally
valued in the inpatient setting but now are frequently performed in the
outpatient setting, services that are frequently performed together or
in multiple units, and services billed on the same day as an E/M
service. Furthermore, in addition to our proposal to review services
with stand-alone procedure time, in this CY 2013 PFS final rule with
comment period, we also discuss recommendations on how best to
accurately measure post-operative work in the global surgical period,
and finalize several proposals to adjust times for services with
anomalous times in the physician time file. Moreover, in September
2012, we entered into two contracts to assist us in validating RVUs of
potentially misvalued codes, which may include the validation of
physician time elements.
Additionally, we do not agree with the commenters' assertion that
if time is distorted across the PFS, it is likely to be distorted with
consistent proportionality. While the distortions may be relatively
consistent for surveys taken at similar times or data gathered through
similar methods, the procedure time assumptions used in developing
practice expense inputs have not originated from consistent sources.
The 60 minute procedure time assumption for IMRT treatment delivery,
for example, was originally developed based on a specialty society
survey for CY 2002.
Through our misvalued codes initiative and other efforts, we strive
to prioritize and review values for codes each year and work toward
achieving greater calibration of values across the PFS over time.
Comment: MedPAC commented that CMS should implement its proposal to
reduce the time estimates for these codes based on the credible
evidence presented in the proposed rule. The commission stated further
that if stakeholders object to these changes, they should provide
objective, valid evidence to CMS that the agency's proposed time
estimates are too low. Furthermore, the commission expressed concerns
about using physician surveys to develop time estimates since physician
medical societies have a financial stake in the process. Therefore,
MedPAC recommended that the AMA RUC should seek evidence other than the
surveys conducted by specialty societies and that CMS may need to
regularly collect data on service time and other variables to establish
more accurate RVUs for practice expense and physician work.
Response: We appreciate MedPAC's support for the proposal. We agree
that there are many means to measure time other than through survey
methodology, and we are open to considering robust data on procedure
time from many sources.
Comment: Many commenters objected to CMS' proposal to update the
procedure time assumptions used in determining the direct PE inputs for
these services since CMS did not propose corresponding updates to other
direct PE inputs for the services.
Response: We appreciate the commenters' interest in CMS' use of the
most accurate and up-to-date information in establishing practice
expense RVUs for these services. We note that we recently received
direct PE input recommendations from the AMA RUC for these services and
used them to establish interim final direct PE inputs for CY 2012. We
also note that in the CY 2011 PFS final rule (75 FR 73205 through
73207) we established a public process for updating prices for supplies
and equipment used as direct PE inputs. Prior to making our CY 2013
proposal regarding procedure times for the IMRT and SBRT codes, we had
received no requests to update prices for the inputs associated with
these codes.
Comment: Several commenters submitted specific information
regarding appropriate input revisions for CPT codes 77418 and 77373.
Several commenters (including the AMA RUC) suggested that IMRT
treatment requires two radiation therapists, working simultaneously, to
furnish the service safely. Others suggested that the linear
accelerator (ER010) and collimator (ER017) used as direct PE inputs for
CPT code 77418 IMRT treatment are no longer typical. These commenters
submitted evidence, consisting of a collection of paid invoices, that
demonstrated that the typical accelerator used in IMRT includes the
functionality of the collimator and should be priced at $ 2,641,783 and
that the price of the ``laser, diode, for patient positioning (Probe)''
(ER040) should be $18,160. Several commenters also noted that two
equipment items included in many other radiation treatment codes, the
radiation treatment vault (ER056) and water chiller (ER065) ought to be
included in the equipment inputs for IMRT and SBRT treatment delivery.
Finally, several commenters suggested that the equipment items used in
these treatment delivery services require practitioners to purchase
maintenance and service contracts in addition to the price of the
equipment itself.
Response: We appreciate all the submitted information to assist us
in conducting a comprehensive update of the appropriate direct PE
inputs for these services. We agree with the commenters that we should
use the best information available in developing direct PE inputs for
PFS services. Based on this information, we believe it would be
appropriate to include two radiation therapists as direct PE inputs for
CPT code 77418. We also believe it would be appropriate to update the
current accelerator and collimator equipment inputs used in CPT code
77418 based on the invoices provided to us by commenters. While we
generally urge stakeholders to submit such requests through the process
we established for CY 2011, because we made a proposal specifically
related to the equipment minutes allocated for these procedures, we
believe it would be appropriate to consider the associated equipment
and prices. We have observed that some other radiation treatment codes
incorporate the water chiller and radiation treatment vault as direct
PE inputs. We believe it would be appropriate to incorporate the water
chiller as an equipment item into the IMRT and SBRT treatment delivery
codes for the sake of consistency with the other radiation treatment
codes. However, we question whether it is fully consistent with the
principles underlying the PFS PE methodology to continue to classify
the radiation treatment vault as medical equipment (a direct cost)
since it is difficult to distinguish the cost of the construction of
the vault from the cost of the construction of the building. The
submitted architectural invoices for vault construction illustrate the
difficulty in making that distinction. Furthermore, the typical
circumstances of the vault's use are unclear, especially regarding
whether or not the vault may be servicing multiple patients at the same
time. However, we do not believe that it would be appropriate to remove
the radiation treatment vault as a direct input for all PFS services
for CY 2013. We expect to address the status of the radiation treatment
vault as a direct PE input during CY 2014 rulemaking. For CY 2013, we
believe that it would be appropriate to include the radiation treatment
vault for CPT codes 77373 and 77418 to align the code with the similar
radiation treatment delivery codes. In terms of the maintenance and
service contract costs submitted to us by commenters, we remind
stakeholders

[[Page 68923]]

that we have generally not considered such costs as direct costs
attributable to furnishing services to individual Medicare
beneficiaries and that our standard equipment cost per minute
calculation includes a maintenance factor that adequately incorporates
such costs in amortizing the cost of the equipment itself.
Comment: A few commenters suggested that CMS should re-price the
capital equipment associated with CPT code 77373. However, none of
these commenters submitted invoices.
Response: We urge commenters to submit invoices and other evidence
appropriate for pricing the capital equipment used in SBRT delivery as
part of our public process for updating supply and equipment prices. We
direct interested stakeholders to the CY 2011 PFS final rule (75 FR
73205-73207) for information regarding that process. We also note that
as we explained in the CY 2012 PFS final rule with comment period (76
FR 73214), we could not accept the invoices accompanying the AMA RUC's
recommendation for CPT Code 77373 to update the price of the ``SRS
system, SBRT, six systems, average'' equipment (ER083). Each of these
invoices included line items that we would not accept as part of the
cost of the equipment, such as costs for training technologists to use
the equipment, and the prices for these items were not separately
identifiable. Therefore, we did not update the equipment price for
ER083 in establishing interim final direct PE inputs for CY 2012. Were
we to receive updated invoices through the process established during
CY 2012 that did not include embedded costs that we would not accept as
part of the cost of the equipment, we would consider those invoices in
rulemaking for CY 2014.
Comment: Many commenters suggested that reductions in Medicare
payment rates for these services would put serious financial strain on
community radiation oncology practices, and result in significant
negative impact on patient access to life-saving cancer treatment,
particularly in rural communities. One commenter provided the results
of an informal study that suggested that if the proposed RVUs become
effective for CY 2013, many providers will stop providing charity care,
lay off staff, limit hours of operation, refrain from purchasing new
equipment, limit or stop accepting Medicare patients, or consolidate or
close practice locations.
Response: We appreciate and share commenters' concerns regarding
Medicare beneficiaries' access to care for radiation treatment
services. While we share these concerns in general, we believe that
accurately valuing services promotes Medicare beneficiaries' access to
many different kinds of important services paid under the PFS,
including radiation treatment. We continue to be interested in
information related to beneficiaries' access to these kinds of
services, and we will monitor for evidence of such problems. We would
welcome being alerted to access problems, should they arise. At
present, we do not have reason to believe that the proposed changes in
procedure time assumptions, in conjunction with other corresponding
updates in the direct PE inputs for these services, will jeopardize
access to care for Medicare beneficiaries. We note that the final PE
RVUs for these services, based on direct PE inputs updated with
information provided by commenters, are significantly greater than
those reflected in the proposed rule. We also note that the specialty-
level impact of this final rule with comment period is significantly
reduced relative to the policy as proposed. We direct interested
readers to the section VIII.C. of this final rule with comment period
regarding the specialty-level impacts of this and other finalized
policies.
Comment: Many commenters objected to CMS' assumptions that the
services would be more costly for facilities such as hospital
outpatient departments that generally have Emergency Medical Treatment
and Labor Act (EMTALA) obligations and standby capacity than for free-
standing centers or offices. These commenters stated that the cost
structure and the services furnished in freestanding and hospital
outpatient settings are the same. These commenters stated that, while
outpatient hospital departments may have to maintain standby capacity,
they do not typically furnish IMRT 24 hours per day, seven days a week
nor do the radiation oncology departments of hospitals generally
furnish radiation treatment to higher acuity patients than the patients
who receive services in physicians' offices or freestanding clinics.
Several other commenters suggested that the payment decrease
expected to result from this proposal will force patients into the more
expensive hospital setting and patients will be steered toward
treatment options that result in greater financial returns. These
commenters stated that this migration will increase costs both to the
Medicare program and to patients through higher co-insurance payments.
Others suggested that significant differences between nonfacility PFS
and OPPS payment are likely to result in consolidation of free-standing
cancer centers and hospitals that will reduce competition, inhibit
access to care, and undermine focused care for cancer patients.
Response: As we stated in the proposal, we continue to believe that
high-volume services, such as IMRT, that are widely furnished in both
nonfacility and facility settings are highly unlikely to be more
resource-intensive in freestanding radiation therapy centers or
physicians' offices than when furnished in facilities like hospitals.
We agree with commenters that the direct costs of furnishing the
service may be similar, but we continue to believe that hospitals are
likely to incur additional indirect costs. For example, hospitals incur
greater costs for maintaining the capacity to furnish services 7 days
per week, 24 hours per day, even if IMRT delivery is not typically
furnished during all of those hours. As we have already noted, the
disparity between OPPS and PFS payment is even greater than a direct
comparison of the payment rates would suggest. OPPS payment for CPT
code 77148 includes packaged payment for image guidance, which is
almost always furnished and billed with CPT code 77418. The PFS
continues to make separate payment for several forms of image guidance.
We understand commenters' concerns regarding the inadvertent impact
that financial incentives may make on the usual site of service for
particular services. We believe that utilizing the most accurate cost
inputs possible is a reasonable approach to mitigating the impact of
such potential incentives.
As a result of the comments we received regarding our proposal to
change the procedure time assumptions used in determining direct PE
inputs for CPT codes 77418 and 77373, we are finalizing our proposals
to adjust the procedure time assumption for IMRT delivery (CPT code
77418) to 30 minutes and to adjust the procedure time assumption for
SBRT delivery (CPT code 77373) to 60 minutes. These codes continue to
include clinical labor time for preparatory and follow-up tasks in
addition to revisions to the procedure times. Based on comments
received regarding additional updates to the direct PE inputs for these
services, we are also adjusting other direct PE inputs for these
services on an interim final basis for CY 2013. Based on comments
received on our proposal, we are incorporating a second radiation
therapist for CPT code 77418. The second therapist will be allocated 30
minutes of service period time, consistent with the first. Furthermore,
we are incorporating a new equipment

[[Page 68924]]

item called ``IMRT accelerator'' to replace the linear accelerator
(ER010) and collimator (ER017) used as current direct PE inputs for CPT
code 77418. Based on the evidence submitted by commenters, the new
equipment item will be priced at $2,641,783 in the direct PE input
database. Additionally, we are incorporating the radiation treatment
vault (ER056) and water chiller (ER065) as direct PE inputs for both
CPT codes 77418 and 77373. We are also updating the price of the
``laser, diode, for patient positioning (Probe)'' (ER040) from $7,678
to $18,160. We are adopting these direct PE inputs on an interim basis
for CY 2013 and these values are reflected in the CY 2013 PFS direct PE
input database. That database is available under downloads for the CY
2013 PFS final rule with comment period on the CMS Web site at: http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage. We also note
that the PE RVUs included in Addenda B and C reflect these interim
direct PE inputs.
These two IMRT and SBRT treatment delivery codes are PE only codes
and are fairly unique in that the resulting RVUs are largely comprised
of resources for staff and equipment based on the minutes associated
with clinical labor. There are several other codes on the PFS
established through the same methodology. As we previously stated, we
believe that the procedure time assumptions for these kinds of services
have not been subject to all of the same mechanisms recently used by
CMS in the valuation of the physician work component of PFS payment. In
light of observations about publicly available procedure times for CPT
codes 77418 (IMRT treatment delivery) and 77373 (SBRT treatment
delivery) and public awareness of potential adverse financial
incentives associated with IMRT treatment delivery in particular, we
believe that similar codes may be potentially misvalued.
Therefore, consistent with the requirement in section
1848(c)(2)(K)(ii) of the Act to examine other codes determined to be
appropriate by the Secretary, we proposed to review and make
adjustments to CPT codes with stand-alone procedure time assumptions
used in developing nonfacility PE RVUs. These procedure time
assumptions are not based on physician time assumptions. We prioritized
for review CPT codes that have annual Medicare allowed charges of
$100,000 or more, include direct equipment inputs that amount to $100
or more, and have PE procedure times of greater than 5 minutes. We did
not propose to include in this category services with payment rates
subject to the OPPS cap (as specified in the statute under section
1848(b)(4) of the Act and listed in Addendum G to this proposed rule)
or services with PE minutes established through code descriptors. (For
example, an overnight monitoring code might contain 480 minutes of
monitoring equipment time to account for 8 hours of overnight
monitoring.) The CPT codes meeting these criteria appear in Table 8. We
recognized that there are other CPT codes that are valued in the same
manner. We may consider evaluating those services as potentially
misvalued codes in future rulemaking.
For the services in Table 8, we requested recommendations from the
AMA RUC and other public commenters on the appropriate direct PE inputs
for these services. We encourage the use of valid and reliable
alternative data sources when developing recommended values, including
electronic medical records (with personally-identifiable information
redacted) and other independent data sources. We note that many of the
CPT codes in Table 8 have been identified through other potentially
misvalued code screens and have been recently reviewed. Given our
concerns with the inputs for the recently reviewed IMRT and SBRT direct
PE inputs discussed above, we believe it is necessary to re-review
other recently reviewed services with stand-alone PE procedure time.

Table 8--Services with Stand-Alone PE Procedure Time
------------------------------------------------------------------------
CPT code Short descriptor
------------------------------------------------------------------------
77280................................ Set radiation therapy field.
77285................................ Set radiation therapy field.
77290................................ Set radiation therapy field.
77301................................ Radiotherapy dose plan imrt.
77338................................ Design mlc device for imrt.
77372................................ Srs linear based.
77373................................ Sbrt delivery.
77402................................ Radiation treatment delivery.
77403................................ Radiation treatment delivery.
77404................................ Radiation treatment delivery.
77406................................ Radiation treatment delivery.
77407................................ Radiation treatment delivery.
77408................................ Radiation treatment delivery.
77409................................ Radiation treatment delivery.
77412................................ Radiation treatment delivery.
77413................................ Radiation treatment delivery.
77414................................ Radiation treatment delivery.
77416................................ Radiation treatment delivery.
77418................................ Radiation tx delivery imrt.
77600................................ Hyperthermia treatment.
77785................................ Hdr brachytx 1 channel.
77786................................ Hdr brachytx 2-12 channel.
77787................................ Hdr brachytx over 12 chan.
88348................................ Electron microscopy.
------------------------------------------------------------------------

Comment: Several commenters objected to our proposal to review
these codes. Some of these commenters objected to the premise that the
procedure time assumptions for these services have not been subject to
the same scrutiny as for services with procedure time assumptions tied
directly to physician time. One of these commenters explained that the
AMA RUC process of reviewing direct practice expense inputs involves
three main levels of expert panel review: specialty society expert
panel review and attestation of the data provided; RUC Practice Expense
Subcommittee review; and full RUC member review. Other commenters
suggested that many of the identified services have procedure time
assumptions related to physician time and therefore should be removed
from the list. Another commenter claimed that services with
professional and technical components should be removed from the list
since services with professional components ought not to be considered
``stand-alone.'' Another commenter suggested that CPT code CPT Code
77600 should be removed from the list since few -TC claims had been
submitted. One commenter claimed that the AMA RUC had extensive
discussions regarding the procedure time assumptions used in developing
direct PE inputs for some of the codes, so that those codes should be
removed from the list.
Response: As we stated in the proposal, we believe that the
procedure time assumptions used in developing direct PE inputs for
these services have not been subject to the same rigor as other
recently-reviewed services. Procedure time assumptions developed and
validated by a series of expert panels have not generally been subject
to the same scrutiny as the times developed through survey data or data
gathered through electronic health records, for example. We identified
the services by calling the services ``stand-alone PE procedure time,''
because they are services that include significant amounts of time
resources allocated outside of physician time. We understand that some
of these codes may be ``technical only'' codes and that in other cases
these codes are used in reporting both the professional and technical
component using the -TC or -26 modifiers, but we do not believe the
divergent reporting mechanisms would mean that any services should be
removed from the list. For CPT code 77600, we note that while few
services were reported with the -TC modifier, many more services were
billed globally in the nonfacility setting, so we continue to believe
that the procedure time assumption that determines the inputs used in
valuing the technical

[[Page 68925]]

component of the payment remains relevant for prioritization.
While we assume that the AMA RUC deliberated on the procedure time
assumptions used in developing the direct PE input recommendations for
these services, we do not believe that extensive committee discussions
would mitigate the need for more extensive review of these services as
potentially misvalued since the assumptions that were developed through
discussion could benefit from the objective data of many kinds.
Comment: MedPAC supported CMS's proposal to review these services.
However, it expressed concern that CMS exempted imaging services that
are subject to the OPPS cap from this review. MedPAC pointed out that
the procedure time assumptions used in several high-priced and high-
expenditure imaging codes have not been reviewed by the AMA RUC since
2002 or 2003 and may be too high. MedPAC also noted that recent
advances in CT and MRI machines have made it possible to scan patients
faster and that even practitioners who are using older equipment could
be performing studies in less time as they become more familiar with
the procedures and equipment.
Response: We appreciate MedPAC's support for this proposal. We
agree that the procedure time assumptions used in imaging codes subject
to the OPPS cap may be inaccurate or outdated. We did not propose to
prioritize review of these procedure time assumptions since the
services are subject to the OPPS payment caps, but we will consider the
appropriate means for reviewing the procedure time assumptions for
those services in future rulemaking.
Based on the comments we received, we are finalizing our proposal
to review and make adjustments to CPT codes with stand-alone procedure
time assumptions used in developing nonfacility PE RVUs.
c. Services With Anomalous Time
Each year when we publish the PFS proposed and final rules, we
publish on the CMS Web site several files that support annual PFS
ratesetting. One of these supporting files is the physician time file,
which lists the physician time associated with the HCPCS codes on the
PFS. The physician time file associated with the CY 2013 PFS final rule
with comment period is available on the CMS Web site under the
downloads for the CY 2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
As we stated in the CY 2013 PFS proposed rule, in our review of
potentially misvalued codes and their inputs, we became aware of
several HCPCS codes that have anomalous times in our physician time
file. Physician work is a measure of physician time and intensity, so
there should be no services that have payable physician work RVUs but
no time in the physician time file, and there should be no payable
services with time in the physician time file and no physician work
RVUs. For CY 2013 we proposed to make the physician time file changes
detailed below to address these anomalous time file entries.
(1) Review of Services With Physician Work and No Listed Physician Time
CPT code 94014 (Patient-initiated spirometric recording per 30-day
period of time; includes reinforced education, transmission of
spirometric tracing, data capture, analysis of transmitted data,
periodic recalibration and physician review and interpretation) has a
physician work RVU of 0.52 and for CY 2012 was listed with 0 physician
time. CPT code 94014 is a global service that includes CPT code 94015
(Patient-initiated spirometric recording per 30-day period of time;
recording (includes hook-up, reinforced education, data transmission,
data capture, trend analysis, and periodic recalibration)) (the
technical component), and CPT code 94016 (Patient-initiated spirometric
recording per 30-day period of time; physician review and
interpretation only) (the professional component). We stated that we
believe it is appropriate for the physician time of CPT code 94014 to
match the physician time of the code's component professional service--
CPT code 94016. As such, for CPT code 94014 for CY 2013, we proposed to
assign 2 minutes of pre-service evaluation time, and 20 minutes of
intra-service time, which matches the times associated with CPT code
94016.
HCPCS codes G0117 (Glaucoma screening for high risk patients
furnished by an optometrist or ophthalmologist) and G0118 (Glaucoma
screening for high risk patient furnished under the direct supervision
of an optometrist or ophthalmologist) both have physician work RVUs
(0.45, and 0.17, respectively), but neither code was included in the CY
2012 physician time file. HCPCS codes G0117 and G0118 have a PFS
procedure status indicator of T indicating that these services are only
paid if there are no other services payable under the PFS billed on the
same date by the same provider.
In the CY 2002 PFS final rule (66 FR 55274), we crosswalked the
physician work of HCPCS code G0117 from CPT code 99212 (Level 2 office
or other outpatient visit, established patient), and we crosswalked the
physician work of HCPCS code G0118 from CPT code 99211 (Level 1 office
or other outpatient visit, established patient). Based on these
finalized physician work crosswalks, we proposed to assign HCPCS code
G0117 physician times matching CPT code 99212, and HCPCS code G0118
physician times matching CPT code 99211. Specifically, we proposed 2
minutes of pre-service time, 10 minutes of intra-service time, and 4
minutes of immediate post-service time for HCPCS code G0117, and 5
minutes of intra-service time, and 2 minutes of immediate post-service
time for HCPCS code G0118.
HCPCS code G0128 (Direct (face-to-face with patient) skilled
nursing services of a registered nurse provided in a comprehensive
outpatient rehabilitation facility, each 10 minutes beyond the first 5
minutes) currently has a physician work RVU (0.08), but was not listed
in the CY 2012 physician time file. In the CY 2013 proposed rule we
stated that, after review of this HCPCS code, we do not believe that
HCPCS code G0128 describes a service that includes physician work. Time
for a registered nurse to furnish the service is included in the PE for
the code. As such, for CY 2013, we proposed to remove the physician
work RVU for HCPCS code G0128. HCPCS code G0128 continues to have PE
and malpractice expense RVUs.
HCPCS codes 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

[[Page 68926]]

footwear; and (3) patient education), and 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 (that is, 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) have physician work RVUs of 0.88,
0.45, and 0.50, respectively, but were not listed in the CY 2012
physician time file. HCPCS codes G0245, G0246, and G0247 have a
procedure status indicator of R on the PFS indicating that coverage of
these services is restricted.
In the CY 2003 PFS final rule (67 FR 79990), we crosswalked the
physician work of HCPCS code G0245 from CPT code 99202 (Level 2 office
or other outpatient visits, new patient), we crosswalked the physician
work of HCPCS code G0246 from CPT code 99212, and we crosswalked the
physician work of HCPCS code G0257 from CPT code 11040 (Debridement;
skin; partial thickness). Based on these finalized physician work
crosswalks, we proposed to assign HCPCS code G0245 physician times
matching CPT code 99202, HCPCS code G0246 physician times matching CPT
code 99212, and HCPCS code G0247 physician times matching CPT code
11040. Specifically, for HCPCS code G0245 we proposed 2 minutes of pre-
service time, 15 minutes of intra-service time, and 5 minutes of
immediate post-service time. For HCPCS code G0246 we proposed 2 minutes
of pre-service time, 10 minutes of intra-service time, and 4 minutes of
immediate post-service time. For HCPCS code G0247 we proposed 7 minutes
of pre-service time, 10 minutes of intra-service time, and 7 minutes of
immediate post-service time.
HCPCS code G0250 (Physician review, interpretation, and patient
management of home INR (International Normalized Ratio) testing for
patient with either mechanical heart valve(s), chronic atrial
fibrillation, or venous thromboembolism who meets Medicare coverage
criteria; testing not occurring more frequently than once a week;
billing units of service include 4 tests) has a physician work RVU of
0.18 but was not listed in the CY 2012 physician time file. HCPCS code
G0250 has a procedure status indicator of R on the PFS indicating that
coverage of this service is restricted. In the CY 2003 final rule (67
FR 79991), we assigned HCPCS code G0250 a work RVU of 0.18, which
corresponds to the work RVU of CPT code 99211. While we did not
articulate this as a direct crosswalk in the CY 2003 final rule, after
clinical review we believe that HCPCS code G0250 continues to require
similar work as CPT code 99211, and should have the same amount of
physician time as CPT code 99211. As such, we proposed to assign HCPCS
code G0250 the same physician time as CPT code 99211. Specifically, for
HCPCS code G0250 we proposed 5 minutes of intra-service time and 2
minutes of immediate post-service time.
During our annual review of new, revised, and potentially misvalued
CPT codes, the assessment of physician time used to furnish a service
is an important part of the clinical review when determining the
appropriate work RVU for a service. However, the time in the physician
time file is not used to automatically adjust the physician work RVUs
outside of that clinical review process. As such, the proposed addition
of physician time to the HCPCS codes discussed above will have no
impact on the current physician work RVUs for these services.
The time data in the physician time file is used in the PE
methodology described in section II.A.2. In creating the indirect
practice cost index (IPCI), 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 furnished by the specialty. The proposed addition of
physician time to the HCPCS codes discussed above will affect the
aggregate pools of indirect PE at the specialty level. However because
the services discussed above have low utilization and low total time,
the impact of the physician time changes on the IPCI is negligible, and
likely would have a modest impact if any on the PE RVUs at the
individual code level.
Below is a summary of the comments we received on our proposed
changes for PFS services with physician work and no listed time in the
physician time file.
Comment: Commenters agreed with our proposed time changes for these
services. The AMA RUC noted that historically the AMA RUC has not
provided work or time recommendations for HCPCS G-codes, but that they
will update the AMA RUC database to reflect these new physician time
components.
Response: We thank commenters for their input on the times
associated with these services. We are finalizing our proposals without
modification. These proposed adjustments are reflected in the physician
time file associated with this CY 2013 final rule with comment period,
available on the CMS Web site under the downloads for the CY 2013 PFS
final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
(2) Review of Services With No Physician Work and Listed Time in the
Physician Time File
There are a number of services that have no physician work RVUs,
yet include time in the physician time file. Many of these services are
not payable under the PFS or are contractor priced services where the
physician time is not used to nationally price the services on the PFS.
We did not propose to remove the physician time from the time file for
these services as the time has no effect on the calculation of RVUs for
the PFS. However, there are several CPT codes, listed in Table 9, that
are payable under the PFS and have no physician work RVUs yet include
time in the physician time file. We proposed to remove the physician
time from the time file for these seven CPT codes.

Table 9--Payable CPT Codes With Physician Time and No Physician Work
------------------------------------------------------------------------
CY 2012 Total
CPT Code Short PFS Procedure physician time
descriptor status (minutes)
------------------------------------------------------------------------
22841............... Insert spine B (Bundled, not 5
fixation separately
device. payable).
51798............... Us urine A (Active, 9
capacity payable).
measure.
95990............... Spin/brain pump A (Active, 40
refill & main. payable).
96904............... Whole body R (Restricted 80
photography. coverage).
96913............... Photochemothera A (Active, 90
py uv-a or b. payable).
97545............... Work hardening. R (Restricted 120
coverage).

[[Page 68927]]

97602............... Wound(s) care B (Bundled, not 36
non-selective. separately
payable).
------------------------------------------------------------------------

As mentioned above and as discussed in section II.A.2. of this
final rule with comment period, to create the IPCI used in the PE
methodology, we calculated 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. As we stated in the CY 2013 PFS
proposed rule, the proposed removal of physician time from the CPT
codes discussed above will affect the aggregate pools of indirect PE at
the specialty level. However because the services discussed above have
low utilization and/or low total time, the impact of the physician time
changes on the IPCI is negligible, and likely will have a modest impact
if any on the PE RVUs at the individual code level.
Below is a summary of the comments we received on our proposed
changes for PFS services with no physician work and listed time in the
physician time file.
Comment: Commenters agreed with our proposal to remove the time
listed in the physician time file for CPT codes 22841 (Internal spinal
fixation by wiring of spinous processes (List separately in addition to
code for primary procedure)), 95990 (Refilling and maintenance of
implantable pump or reservoir for drug delivery, spinal (intrathecal,
epidural) or brain (intraventricular), includes electronic analysis of
pump, when performed;), 96904 (Whole body integumentary photography,
for monitoring of high risk patients with dysplastic nevus syndrome or
a history of dysplastic nevi, or patients with a personal or familial
history of melanoma), and 96913 (Photochemotherapy (Goeckerman and/or
PUVA) for severe photoresponsive dermatoses requiring at least 4-8
hours of care under direct supervision of the physician (includes
application of medication and dressings)). Commenters noted that CPT
code 51798 (Measurement of post-voiding residual urine and/or bladder
capacity by ultrasound, non-imaging) likely had time listed in the
physician time file because the AMA RUC had recommended work RVUs for
the service however CMS assigned only practice expense. Similarly,
commenters noted that CPT code 97602 (Removal of devitalized tissue
from wound(s), non-selective debridement, without anesthesia (eg, wet-
to-moist dressings, enzymatic, abrasion), including topical
application(s), wound assessment, and instruction(s) for ongoing care,
per session) likely had time included in the physician time final
because the AMA RUC HCPAC recommended work RVUs for the service,
however CMS assigned CPT code 97602 a bundled procedure status.
Commenters noted that CPT code 97545 (Work hardening/conditioning;
initial 2 hours) has a restricted procedure status, but inherently
involves 2 hours of work, and requested that CMS maintain the time
entry in the physician time file for this service to assist other
payers and stakeholder in making payment policy decisions.
Response: We thank commenters for their input on the times
associated with these services. After reviewing the comments, we are
finalizing our proposal to remove the time from the physician time file
for CPT codes 22841, 51798, 95990, 96913, and 97602. We will maintain
the time entry in the physician time file for CPT code 97545, as
requested; while this CPT code has a restricted procedure status
indicator, it is still payable in some circumstances. CPT code 96904
also has a restricted procedure status indicator and is payable in some
circumstances. For consistent treatment of these two CPT codes, we will
also maintain the time entry in the physician time file for CPT code
96904. These adjustments are reflected in the physician time file
associated with this CY 2013 PFS final rule with comment period,
available on the CMS Web site under the downloads for the CY 2013 PFS
final rule with comment period at http://www.cms.gov/PhysicianFeeSched/.
4. Expanding the Multiple Procedure Payment Reduction Policy
Medicare has long employed multiple procedure payment reduction
(MPPR) policies to adjust payment to more appropriately reflect reduced
resources involved with furnishing services that are frequently
furnished together. Under these policies, we reduce payment for the
second and subsequent services within the same MPPR category furnished
in the same session or same day. These payment reductions reflect
efficiencies that typically occur in either the practice expense (PE)
or professional work or both when services are furnished together. With
the exception of a few codes that are always reported along with
another code, the Medicare PFS values services independently to
recognize relative resources involved when the service is the only one
furnished in a session. While our general policy for MPPRs precedes the
Affordable Care Act, MPPRs address the fourth category of potentially
misvalued codes identified in section 1848(c)(2)(K) of the Act which is
``multiple codes that are frequently billed in conjunction with
furnishing a single service'' (see 75 FR 73216).
For CY 2013, we proposed to continue our work to recognize resource
efficiencies when certain services are furnished together. We proposed
to apply an MPPR to the technical component (TC) of certain
cardiovascular and ophthalmology diagnostic tests. As discussed in the
CY 2012 final rule with comment period (76 FR 73079), we are also
proceeding with applying the current MPPR policy for imaging services
to services furnished in the same session by physicians in the same
group practice.
a. Background
Medicare has a longstanding policy to reduce payment by 50 percent
for the second and subsequent surgical procedures furnished to the same
beneficiary by a single physician or physicians in the same group
practice on the same day, largely based on the presence of efficiencies
in the PE and pre- and post-surgical physician work. Effective January
1, 1995, the MPPR policy, with this 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, for CY 2006 PFS, we
extended the MPPR policy to the TC of certain

[[Page 68928]]

diagnostic imaging procedures furnished on contiguous areas of the body
in a single session (70 FR 70261). This MPPR policy recognizes that for
the second and subsequent imaging procedures furnished in the same
session, there are some efficiencies in clinical labor, supplies, and
equipment time. In particular, certain clinical labor activities and
supplies are not duplicated for subsequent imaging services in the same
session and, because equipment time and indirect costs are allocated
based on clinical labor time, we also reduced those 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 and only applied to procedures furnished in a single session
involving contiguous body areas within a family of codes, not across
families. Additionally, the MPPR policy originally applied to TC-only
services and to the TC of global services, but not to professional
component (PC) services.
There have been several revisions to this policy since it was
originally adopted. Under the current imaging MPPR policy, full payment
is made for the TC of the highest paid procedure, and payment for the
TC is reduced by 50 percent for each additional procedure subject to
this MPPR policy. 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 this new OPPS payment cap, we decided in the
PFS final rule with comment period for CY 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 BN provision. Effective July 1, 2010, section 1848(b)(4)(C) of the
Act increased 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. Section 1848(c)(2)(B)(v)(IV) of the Act exempted the
reduced expenditures attributable to this further change from the PFS
BN provision.
In the July 2009 U.S. Government Accountability Office (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 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 furnished to the same beneficiary in the same session,
regardless of the imaging modality, and is not limited to contiguous
body areas.
As we noted in the CY 2011 PFS final rule with comment period (75
FR 73228), while section 1848(c)(2)(B)(v)(VI) of the 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 BN adjustment, it does not apply to
reduced expenditures attributable to our policy change regarding
additional code combinations across code families (noncontiguous body
areas) that are subject to BN 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
1848(c)(2)(K) of the Act, on 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. As we explained in the CY
2011 PFS final rule with comment period (75 FR 73232), the therapy MPPR
does not apply to contractor-priced codes, bundled codes, and add-on
codes. The complete list of codes subject to the MPPR policy for
therapy services is included in Addendum H.
This MPPR for therapy services was first proposed in the CY 2011
proposed rule (75 FR 44075) as 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 beneficiary in a
single day. It applies to services furnished by an individual or group
practice or ``incident to'' a physician's service. 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 beneficiary 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 (PPTRA) (Pub. L. 111-286) revised the payment reduction
percentage from 25 percent to 20 percent for therapy services for which
payment is made under a fee schedule under section 1848 of the Act
(which are services furnished

[[Page 68929]]

in office settings, or non-institutional services). The payment
reduction percentage remains at 25 percent for therapy services
furnished in institutional settings. Section 4 of the PPTRA exempted
the reduced expenditures attributable to the therapy MPPR policy from
the PFS BN provision. Under our current policy as amended by the PPTRA,
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.
This MPPR policy applies to multiple units of the same therapy
service, as well as to multiple different ``always therapy'' services,
when furnished to the same beneficiary on the same day. The MPPR
applies when multiple therapy services are billed on the same date of
service for one beneficiary 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 that are
furnished in the office setting and paid under the PFS, as well as
institutional services that are furnished by outpatient hospitals, home
health agencies, comprehensive outpatient rehabilitation facilities
(CORFs), and other entities that are paid for outpatient therapy
services at rates based on the PFS.
In its June 2011 Report to Congress, MedPAC highlighted continued
growth in ancillary services subject to the in-office ancillary
services exception. The in-office ancillary exception to the general
prohibition under section 1877 of the Act as amended by the Ethics in
Patient Referrals Act, also known as the Stark law, allows physicians
to refer Medicare beneficiaries for designated health services,
including imaging, radiation therapy, home health care, durable medical
equipment, clinical laboratory tests, and physical therapy, to entities
with which they have a financial relationship under specific
conditions. MedPAC recommended that we apply a MPPR to the PC of
diagnostic imaging services furnished by the same practitioner in the
same session as one means to curb excess self-referral for these
services. The GAO already had made a similar recommendation in its July
2009 report.
In continuing to apply the provisions of section 1848(c)(2)(K) of
the Act regarding potentially misvalued codes that result from
``multiple codes that are frequently billed in conjunction with
furnishing a single service,'' in the CY 2012 final rule (76 FR 73071),
we expanded 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 applied (see Addendum F). Thus, this
MPPR policy now applies to the PC and the TC of certain diagnostic
imaging codes. Specifically, we expanded the payment reduction
currently applied to the TC to apply also to the PC of the second and
subsequent advanced imaging services furnished by the same physician
(or by two or more physicians in the same group practice) to the same
beneficiary in the same session on the same day. However, in response
to public comments, in the CY 2012 PFS final rule with comment period,
we adopted a 25 percent payment reduction to the PC component of the
second and subsequent imaging services.
Under this policy, full payment is made for the PC of the highest
paid advanced imaging service, and payment is reduced by 25 percent for
the PC for each additional advanced imaging service furnished to the
same beneficiary in the same session. This policy was 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, but with some efficiencies in the intraservice
period.
This policy 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
1848(c)(2)(K) of the Act. This policy is also consistent both with our
longstanding policy on surgical and nuclear medicine diagnostic
procedures, under which we apply a 50 percent payment reduction to
second and subsequent procedures. Furthermore, it was responsive to
continued concerns about significant growth in imaging spending, and to
MedPAC (March 2010 and June 2011) and GAO (July 2009) recommendations
regarding the expansion of MPPR policies under the PFS to account for
additional efficiencies.
In the CY 2012 proposed rule (76 FR 42812), we also invited public
comment on the following MPPR policies under consideration. We noted
that 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 furnished in the same session. Such an
approach could define imaging consistent with our existing definition
of imaging for purposes of the statutory cap on PFS 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
when multiple services are furnished together. 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 BN 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.
Such an approach would be based on efficiencies due to duplication
of physician work primarily in the pre- and post-service periods, with
smaller efficiencies in the intraservice period, when multiple services
are furnished together. 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 BN 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

[[Page 68930]]

encounter. 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
when multiple services are furnished together. The approach would apply
to approximately 700 HCPCS codes, including the approximately 560 HCPCS
codes that are currently subject to the OPPS cap. The savings would be
redistributed to other PFS services as required by the statutory PFS BN
provision.
b. MPPR Policy Clarifications
(1) Apply the MPPR to Two Nuclear Medicine Procedures
As indicated previously, effective January 1, 1995, we implemented
an MPPR for six nuclear medicine codes. Under the current policy, full
payment is made for the highest paid procedure, and payment is reduced
by 50 percent for the second procedure furnished to the same
beneficiary on the same day. As noted in the CY 2013 proposed rule (77
FR 44748), due to a technical error, the MPPR is not being applied to
CPT codes 78306 (Bone imaging; whole body) when followed by CPT code
78320 (Bone imaging; SPECT). We will apply the MPPR to these procedures
effective January 1, 2013. We received the following comment on this
provision:
Comment: A commenter indicated that continuing to apply and extend
the MPPR for nuclear medicine procedures is unwarranted and
inconsistent with CMS' aim to improve payment accuracy. The commenter
noted that decisions made in 1995 were based on qualitative assessments
rather than on rigorous data analysis. The commenter believes that with
the wealth of data now available, and improved techniques in data
analysis, careful evaluation of the applicability of the MPPR for all
six nuclear medicine procedures is merited.
Response: We acknowledge the commenter's concerns, but we neither
proposed discontinuing the MPPR on nuclear medicine procedures, nor
extending it to new codes. Rather, we noted that the MPPR under current
policy was, for technical reasons, not being applied to CPT code 78306
(Bone imaging; whole body) when followed by CPT code 78320 (Bone
imaging; SPECT), and provided notification that the MPPR would be
applied effective January 1, 2013. Accordingly, we are finalizing this
technical correction effective for services furnished on or after
January 1, 2013.
(2) Apply the MPPR to the PC and TC of Advanced Imaging Procedures to
Physicians in the Same Group Practice
As indicated in the CY 2012 final rule (76 FR 73077-73079), we
finalized a policy to apply the MPPR to the PC and TC of the second and
subsequent advanced imaging procedures furnished to the same
beneficiary in the same session by a single physician or by multiple
physicians in the same group practice. Due to operational limitations,
we did not apply this MPPR to multiple physicians in the same group
practice during CY 2012. In addition, after we issued the CY 2012 final
rule with comment period, some commenters stated that they had not
commented on the application of the MPPR to physicians in the same
group practice because that policy was not explicit in the CY 2012
proposed rule discussion expanding the MPPR for advanced imaging to the
PC. As noted in the CY 2013 proposed rule (77 FR 44748), we have
resolved the operational problems and, therefore, for services
furnished on or after January 1, 2013 we will apply the MPPR to both
the PC and the TC of advanced imaging procedures to multiple physicians
in the same group practice (same group NPI). Under this policy, the
MPPR will apply when one or more physicians in the same group practice
furnish services to the same beneficiary, in the same session, on the
same day. This policy is consistent with other PFS MPPR policies for
surgical and therapy procedures and, effective January 1, 2013, for
diagnostic cardiovascular and ophthalmology procedures. We continue to
believe that the typical efficiencies achieved when the same physician
is furnishing multiple procedures also accrue when different physicians
in the same group furnish multiple procedures involving the same
beneficiary in the same session. While we agree with commenters that
most physicians would not change the way they practice in order to
avoid application of the MPPR, we believe application of the imaging
MPPR to physicians in the same group practice will ensure that there is
no financial incentive for physicians in a group practice to change
their behavior to split imaging interpretation services for a
beneficiary among different physicians in the group. It is our
intention to apply this and future MPPRs to services furnished by one
or more physicians in the same group unless we determine for a specific
MPPR that the efficiencies associated with an individual physician
furnishing multiple procedures do not extend to multiple physicians in
the same group practice. We received the following comments on this
provision:
Comment: Most commenters opposed applying the MPPR on diagnostic
imaging to physicians in the same group practice, specifically to the
PC. While many commenters acknowledged minimal efficiencies in the PC
of second and subsequent procedures when furnished by the same
physician, they maintained that no such efficiencies exist when
furnished by multiple physicians.
Commenters maintained that CMS assumes efficiencies exist, but has
not presented any clinical evidence or comprehensive resource use
analysis to justify claims of efficiency. Commenters do not believe
that substantial economy of time or of effort exist. According to
commenters, each physician who reviews a beneficiary's imaging results
must review the beneficiary's medical history, examine the imaging
results, make diagnoses, draft a report, and enter communications with
other physicians in the beneficiary's medical chart. Commenters note
that none of these actions would take less time or effort when
performed by a second physician in the same practice. Commenters do not
believe this proposal reflects the true costs incurred by a practice
when multiple physicians furnish advanced imaging services to the same
beneficiary on the same day. Another commenter noted that cognitive
medicine, such as diagnostic imaging cannot have global efficiencies,
as every observer needs to independently investigate, collect data,
formulate an educated opinion, and furnish a professional assessment.
Commenters maintained that clinical best practice dictates that the
images are read by subspecialized, fellowship-trained radiologists,
trained to read specific body parts. For example, they stated,
radiologists are trained to read either breast, musculoskeletal, body,
neurology or oncology images. Commenters indicated that the proposal
would penalize or disincentivize practices from having the most
appropriate radiologist read the study, which may subject beneficiaries
to undue risks.
Commenters also noted that beneficiaries suffering from life-
threatening conditions such as trauma, heart attacks, and cancer often
require multiple imaging scans to accurately and fully assess extent of
injury and monitor disease progression and/or any improvements in
condition. This is not uncommon in an urban hospital serving high
acuity beneficiaries. Commenters maintained that as the complexity of
the

[[Page 68931]]

beneficiary case increases, the likelihood that multiple scans and/or
series will be needed in a given day increases, and thus the number of
physicians needed to review multiple scans and/or regions of the body
in a series of scans increases, requiring a variety of sub-specialty-
trained radiologists. Commenters concluded that the amount of work in
the form of time, effort, and skill, does not diminish in this
situation but rather has an additive effect, reflecting the clinical
complexity of the beneficiary situation, not a duplication of efforts.
A commenter noted that multi-modality images on a beneficiary are
not always interpreted at the same time or by the same physician.
According to the commenter, the beneficiary encounter that includes
multiple TCs is not directly related to the performance of the PCs by
the interpreting physician(s). The commenter indicated that through the
use of teleradiology, the interpretations often take place at separate
locations and by separate physicians. Finally, the commenter noted that
this process allows differently specialized radiologists to interpret
different images.
A commenter maintained that CMS' reliance on both the July 2009 GAO
report and the March 2010 MedPAC report to support its MPPR policies is
fundamentally flawed because such sources do not appear to justify the
proposals. The commenter noted that CMS also cites the June 2011 MedPAC
report as further support for its MPPR application to the PC of
diagnostic imaging services furnished by the same physician in the same
session. The commenter indicated that the report's policy
recommendation is for a multiple procedure payment reduction to the
professional component of diagnostic imaging services furnished by the
same practitioner in the same session. The commenter stated that it
could be unfair to apply the MPPR to physicians who share a practice.
A commenter recommended that CMS focus on applying the results of
the Medicare Imaging Demonstration, and pursuing options to encourage
use of appropriateness criteria, as the best solution to any problems
of under or overutilization of imaging.
Response: The policy of applying the imaging MPPR to physicians in
the same group practice is consistent with other MPPR policies for
surgical procedures and therapy services, and effective January 1,
2013, for diagnostic cardiovascular and diagnostic ophthalmology
procedures under the PFS. We continue to believe that the typical
efficiencies achieved when the same physician is furnishing multiple
procedures also accrue when different physicians in the same group
furnish multiple procedures involving the same beneficiary. We believe
that efficiencies exist in the parts of the service that deal directly
with patients, such as gowning and obtaining consent, as well as in the
interpretation, where the first completed interpretation is commonly
available to the second interpreting physician at the point of
interpretation. Although efficiencies may be less when one physician is
remote, we still believe that efficiencies are within the ranges that
will typically be seen across the many varied combinations of imaging
services subject to the MPPR.
We disagree that radiologists are routinely trained to only read
organ specific or technology specific images. Radiologists receive
broad training that allows them to provide services across multiple
technologies and organ systems. Some may choose to more narrowly focus
their practice, but in the typical radiology practice across the
country, many radiologists continue to provide a broad range of imaging
interpretation services.
We agree with the commenter that higher complexity patients may
require multiple scans. However, we disagree that this higher
complexity negates the efficiencies that are seen with less complex
patients. Duplication in technical component, such as greeting and
gowning, would continue irrespective of patient complexity. Higher
complexity patients, receiving multiple scans, provide greater support
for the proposed MPPR policy changes. Since interpretation of an image
builds on the clinical framework that the radiologist(s) develops for
each patient as she reviews each scan, we believe that interpretation
of multiple additional scans require diminishing marginal effort.
Finally, while we agree with commenters that most physicians would
not change the way they practice in order to avoid application of the
MPPR, we believe application of the imaging MPPR to physicians in the
same group practice will ensure that there is no financial incentive
for physicians in a group practice to change their behavior to split
imaging interpretation services for a beneficiary among different
physicians in the group.
It is our intention to apply this and future MPPR policies to
services furnished by one or more physicians in the same group. Future
modifications may be appropriate if we collect or are provided with
data that indicates that the efficiencies associated with an individual
physician furnishing multiple procedures do not extend to multiple
physicians in the same group practice.
We disagree that we have misinterpreted GAO and MedPAC policy
recommendations. MedPAC's June 2011 recommendation for an MPPR on the
professional component of imaging services is silent on application to
the group practice, but since then, MedPAC has not opposed our proposal
to apply the MPPR on the PC and TC of diagnostic imaging to physicians
in the same group practice. Finally, the Medicare Imaging Demonstration
is designed to test whether the use of decision support systems can
improve quality of care by diminishing patient exposure to potentially
harmful radiation caused by unnecessary over-utilization of advanced
imaging services. The 2-year demonstration has recently completed its
first year. The demonstration is a separate initiative and does not
specifically address MPPR policy.
Comment: Many commenters noted that administrative considerations
prevented us from implementing this policy effective January 1, 2012.
Commenters indicated that we have not provided a detailed explanation
of how such administrative concerns were rectified.
Response: Our administrative delay in implementing the policy did
not involve the merits of the policy but the practicality of
implementation. Medicare contractors were unable to make the necessary
changes to their systems to effectively operationalize the policy for
CY 2012. The necessary system changes have now been made in order for
this policy to be operational beginning on January 1, 2013.
Comment: Commenters expressed concern that using the NPI to define
a group practice may be inaccurate. Commenters indicated that some
diagnostic imaging practice members may belong to more than one NPI
group; whereas other practitioners may be part of a smaller NPI group
than their corporate structure would suggest. Commenters maintained
that attempts to apply the MPPR to physicians in the same group
practice using the NPI could lead to unfair application simply due to
corporate governance issues. Additionally, commenters noted that
radiologists in a group practice may also independently contract to
furnish outside interpretations for other groups. Finally, commenters
indicated that reliance on the NPI in these cases may lead to confusion
and potential compliance concerns.
Response: We have traditionally relied on the group NPI to identify

[[Page 68932]]

services furnished in the same group practice as a basis for group
practice-level edits across the physician fee schedule. We plan to use
the group NPI for applying the MPPR to advanced imaging services at the
group practice level beginning in 2013. We appreciate commenter input
on this issue and understand that physicians do not always furnish
services within their group practice and that the group NPI may reflect
several different organizational arrangements. Accordingly, we intend
to further explore the issues the commenters raised regarding use of
the group NPI to identify services furnished in the same group
practice. For example, we could consider using a provider Tax
Identification Number (TIN) as an alternative to the group NPI;
however, we would need to determine whether this would create other
operational problems. Medicare contractors would also require adequate
time to make the necessary systems changes. We will consider these
issues and make any changes in future rulemaking.
Comment: Various commenters had the following concerns about the
definition of a ``session'' and the use of modifier 59:
Physicians use the 59 modifier appropriately to bypass the
MPPR when multiple services are furnished to the same beneficiary in
separate sessions on the same day. However, the 59 modifier is also
used for the Correct Coding Initiative (CCI) edits, creating a conflict
between the two different uses of the modifier. For example, if an MRA
of the head and brain are furnished to the same beneficiary on the same
day, it may be appropriate to report modifier 59 to bypass the CCI
edit. However, the modifier 59 may also be interpreted to bypass the
MPPR, which would not be appropriate if the services were furnished in
the same session. They stated that this presents a quandary for both
radiology practices and Medicare Administrative Contractors.
CMS has provided no guidance on what constitutes a
separate session for professional interpretation, other than ``scans
interpreted at widely different times,'' leaving radiology practices
vulnerable to differing interpretations by Medicare contractors,
including Recovery Audit Contractors.
Whether CMS' use of the word ``encounter'' is synonymous
with ``session.''
Multiple physicians furnishing the PC on different studies
to the same beneficiary on the same day should constitute separate
sessions by definition.
Software programs in use for medical billing do not
adequately capture interpretation times, and therefore, do not track
whether the PC was performed in the same or different sessions and when
the 59 modifier is appropriate. Commenters expressed concern that they
will not be able to routinely identify when a Medicare beneficiary has
had multiple imaging scans on the same day, especially if reports are
generated in different locations, by different physicians, at different
times of day. Radiology workflow systems triage studies to subspecialty
radiologists who each separately interpret the studies and generate
reports. Billing systems submit separate claims for each study. If two
physicians read studies on the same beneficiary, coders and billing
systems will have significant difficulty attaching the 59 modifier to
the appropriate study, even if they are able to recognize that the 59
modifier should be applied. Hospital-based radiologists rely on data
feeds provided by their hospitals' information systems. These data-
feeds typically include beneficiary demographic information but not
image interpretation times. Because they are unable to track the time
of interpretation, coders and billers will be required to re-create the
timing of interpretative sessions to determine whether or not the
interpretation occurred in the same session.
Radiologists in small practices, or rural hospitals and
imaging facilities, are more likely to have only a few radiologists in
the office. Frequently in small practices, there will be instances
where beneficiaries have multiple advanced imaging services that are in
clinically separate sessions, but interpreted by the individual members
of the same small group of radiologists. It is not clear that there
will be a way for coders, CMS contractors and auditors to understand
and validate that these separate encounters constitute separate
sessions.
Contrary to CMS' claim, commenters expect there would be
frequent circumstances requiring the use of the 59 modifier, that is, a
distinct procedural service.
Response: We are aware of the conflict between use of modifier 59
for CCI edits and for purposes of bypassing the MPPR when multiple
procedures are furnished. We are considering creating a new modifier
for the MPPR to resolve this problem. In creating a new MPPR modifier,
we would refine the definition of what constitutes a session. We
believe that radiology imaging systems currently capture the time of
each image and that image time can be provided to the interpreting
radiologist(s). We also believe that radiology medical record systems
currently capture the time of each professional comment or
interpretation, and that the interpretation of the radiologist should
contain any clinical information necessary to identify when a separate
session has occurred. We believe that where billing systems currently
do not capture this information in a readily usable form, that they
will adapt to this policy and make this necessary billing information
readily accessible to coders. Thus, we believe that coders will be able
to determine when a separate session has occurred and will be able to
append a 59 modifier (or new MPPR modifier for different session) to
the claim line when such a modifier is justified.
Alternatively, we may consider modifying the MPPR policy to apply
to procedures furnished on the same day, rather than in the same
session. This would resolve some of the operational difficulties with
the use of ``session'' and conform to the policy for all other MPPRs.
If we were to modify this MPPR to apply to procedures furnished on the
same day rather than in the same session, we would do so through future
rulemaking and subject to public comment.
Comment: Commenters indicated that applying the MPPR for the PC of
advanced imaging procedures to physicians in the same group practice
would result in a payment reduction that would adversely affect both
the quality of care and access to care.
Response: We have no evidence to suggest any adverse impacts on
either the quality of care or the access to care have resulted from the
implementation of the MPPR to the TC of imaging in 2006 or the PC of
imaging in 2012. We have no evidence that beneficiaries have been
unable to obtain needed imaging, and we will continue to monitor access
to care. MedPAC's analysis in its June 2011 report indicates there has
been continued high annual growth in the use of imaging through 2009.
Further, in the absence of any evidence of inadequate access or safety
and quality concerns, declining growth in imaging services could be
interpreted as a return to a more appropriate level of imaging
utilization. Based on our experience with the MPPR on both the TC and
PC of advanced diagnostic imaging services, we have no reason to
believe that extending the imaging MPPR to physicians in the same group
practice will have a negative impact on quality or access to care.

[[Page 68933]]

c. Proposed MPPR for the TC of Cardiovascular and Ophthalmology
Services
As noted above, we continue to examine whether it would be
appropriate to apply MPPR policies to other categories of services that
are frequently billed together, including the TC for diagnostic
services other than advanced imaging services. For CY 2013, we examined
other diagnostic services to determine whether there typically are
efficiencies in the technical component when multiple diagnostic
services are furnished together on the same day. We have conducted an
analysis of the most frequently furnished code combinations for all
diagnostic services using CY 2011 claims data. Of the several areas of
diagnostic tests that we examined, we found that billing patterns and
PE inputs indicated that multiple cardiovascular and ophthalmology
diagnostic procedures, respectively, are frequently furnished together
and that there is some duplication in PE inputs when this occurs. For
cardiovascular diagnostic services, we reviewed the code pair/
combinations with the highest utilization in the CPT code ranges of
75600 through 75893, 78414 through 78496, and 93000 through 93990. For
ophthalmology diagnostic services, we reviewed the code pair/
combinations with the highest utilization in the CPT code ranges of
76510 through 76529 and 92002 through 92371. The cardiovascular and
ophthalmology diagnostic code combinations identified as most
frequently billed together are listed in Tables 14 and 15.
Under the resource-based PE methodology, specific PE inputs of
clinical labor, supplies, and equipment are used to calculate PE RVUs
for each individual service. When multiple diagnostic tests are
furnished to the same beneficiary on the same day, most of the clinical
labor activities and some supplies are not furnished twice. We have
identified the following clinical labor activities that typically would
not be duplicated for subsequent procedures:
Greeting and gowning the patient.
Preparing the room, equipment and supplies.
Education and consent.
Completing diagnostic forms.
Preparing charts.
Taking history.
Taking vitals.
Preparing and positioning the patient.
Cleaning the room.
Monitoring the patient.
Downloading, filing, identifying and storing photos
Developing film.
Collating data.
Quality Assurance documentation.
Making phone calls.
Reviewing prior X-rays, lab and echocardiograms.
We analyzed the CY 2011 claims data for the most frequently billed
cardiovascular and ophthalmology diagnostic code combinations to
determine the level of duplication present when multiple services are
furnished to the same beneficiary on the same day. Our MPPR
determination excludes the clinical staff minutes associated with the
activities that are not duplicated for subsequent procedures. For
purposes of this analysis, we retained the higher number of minutes for
each duplicated clinical activity, regardless of the code in the pair
with which those clinical labor minutes were associated. For example,
if code A and B had 6 and 3 minutes, respectively, of clinical labor
for preparing and positioning the beneficiary, we removed 3 minutes. If
code A and B had 2 and 4 minutes, respectively, of clinical labor for
preparing room, equipment and supplies, we removed 2 minutes. The lower
number of minutes was removed, regardless of the code. If one code had
no minutes for a particular clinical labor activity, then no minutes
were removed for that activity. Equipment time and indirect costs are
allocated based on clinical labor time; therefore, these inputs were
reduced accordingly. While we observed that some supplies are
duplicated, we did not factor these into our calculations because they
were low cost and had little impact on our estimate of the level of
duplication for each code pair.
When we removed the PE inputs for activities that are not
duplicated, and adjusted the equipment time and indirect costs, we
found support for payment reductions ranging from 8 to 57 percent for
second and subsequent cardiovascular procedures (volume-adjusted
average reduction across all code pairs of 25 percent); and payment
reductions ranging from 9 to 62 percent for second and subsequent
ophthalmology procedures (volume-adjusted average reduction across all
code pairs of 32 percent). Because we found a relatively wide range of
reductions by code pair, we believed that an across-the-board reduction
of 25 percent for second and subsequent procedures (which is
approximately the average reduction supported by our analysis) would be
appropriate. In the CY 2013 proposed rule (77 FR 44748-44752), we
proposed to apply an MPPR to TC-only services and to the TC portion of
global services for the procedures listed in Tables 12 and 13. The MPPR
would apply independently to second and subsequent cardiovascular
services and to second and subsequent ophthalmology services. We
proposed to make full payment for the TC of the highest priced
procedure and to make payment at 75 percent (that is, a 25 percent
reduction) of the TC for each additional procedure furnished by the
same physician (or physicians in the same group practice, that is, the
same group practice NPI) to the same beneficiary on the same day. We
did not propose to apply an MPPR to the PC for cardiovascular and
ophthalmology services at this time.
We believe that the proposed MPPR percentage represents an
appropriate reduction for the typical delivery of multiple
cardiovascular and ophthalmology services on the same day. Because the
reduction is based on discounting the specific PE inputs that are not
duplicated for second and subsequent services, the proposal is
consistent with our longstanding policies on surgical, nuclear medicine
diagnostic procedures, and advanced imaging procedures, which apply a
50 percent reduction to second and subsequent procedures, and our more
recent policy on therapy services, which applies a 20 or 25 percent
reduction depending on the setting.
Furthermore, it is consistent with section 1848(c)(2)(K) of the
Act, which 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.
Finally, it is responsive to continued concerns about significant
growth in spending on imaging and other diagnostic services, and to
MedPAC (March 2010) and GAO (July 2009) recommendations regarding the
expansion of MPPR policies under the PFS to account for additional
efficiencies. Savings resulting from this proposal would be
redistributed to other PFS services as required by the general
statutory PFS BN provision.
In summary, we proposed that for services furnished on or after
January 1, 2013, we will apply the MPPR to nuclear medicine procedures
to CPT code 78306 (Bone imaging; whole body) when followed by CPT code
78320 (Bone imaging; SPECT). We will apply the MPPR to the PC and the
TC of advanced imaging procedures when furnished by multiple physicians
in the same group practice (same group NPI). Therefore, the MPPR will
apply when

[[Page 68934]]

one or more physicians in the same group practice furnish services to
the same beneficiary, in the same session, on the same day. Finally, we
proposed to apply an MPPR to TC-only services and to the TC portion of
global services for diagnostic cardiovascular and ophthalmology
procedures. The reduction would apply independently to cardiovascular
and ophthalmology services. We proposed to make full payment for the TC
of the highest priced procedure and payment at 75 percent of the TC for
each additional procedure furnished by the same physician (or
physicians in the same group practice, that is, the same group practice
NPI) to the same beneficiary on the same day.
The following is a summary of the comments we received on this
proposal to apply the MPPR to diagnostic cardiovascular and
ophthalmology procedures:
Comment: MedPAC supported the proposal to expand the MPPR to
cardiovascular and ophthalmology diagnostic services. Furthermore,
MedPAC encouraged CMS to examine whether there are efficiencies in
physician work that occur when multiple tests are furnished in the same
session that would justify applying the MPPR to the PC of these
services. For example, when multiple tests are performed together,
certain physician activities (such as reviewing the beneficiary's
medical records and discussing the findings with the referring
physician) are likely to occur only once.
In the PFS proposed rule for CY 2012 (76 FR 42812-42813), CMS
solicited comments on whether the MPPR should be applied to the TC of
all diagnostic tests, rather than just imaging procedures. In response,
MedPAC examined Part B claims data from 2010 to look for diagnostic
tests that are frequently furnished more than once on the same day by
the same physician for the same beneficiary. MedPAC found that several
surgical pathology codes are frequently billed with more than one unit
of service on the same date. For example, one-third of the claims for
CPT code 88305 (Level IV, surgical pathology, gross and microscopic
examination) contained more than one unit of service for that code. In
addition, 57 percent of the claims for CPT code 88342
(immunohistochemistry, each antibody) contained more than one unit of
service for that code. In these cases, it appears that multiple
specimens from the same beneficiary were examined at the same time by
the same pathologist. MedPAC indicated that CMS should analyze whether
there are efficiencies in practice expense or physician work that occur
when multiple units of the same test are performed at the same time. If
so, MedPAC suggested that CMS should consider applying the MPPR policy
to these services or creating bundled codes that include multiple units
of the same test. MedPAC noted that these services account for a
substantial and growing amount of Medicare spending. In 2010, Medicare
spent $1.3 billion on CPT code 88305 and $241 million on CPT code
88342.
MedPAC noted that it has recommended expanding the MPPR to both the
TC and PC of all imaging services to account for efficiencies in
practice expense and physician work that occur when multiple studies
are furnished in the same session.
A few additional commenters either agreed with the principle of
applying the MPPR to cardiovascular and ophthalmology services or
concurred with our findings that efficiencies exist when multiple
diagnostic services are furnished on the same beneficiary on the same
day. Those commenters agreed that the application of the MPPR to the
additional cardiovascular and ophthalmic diagnostic procedures is an
appropriate way to recognize such efficiencies.
Response: We appreciate the support of MedPAC and other commenters
for our proposal to apply the MPPR to cardiovascular and ophthalmology
services. We agree that the MPPR is an appropriate mechanism to account
for efficiencies when multiple procedures are furnished to the same
beneficiary on the same day in order to ensure more accurate payments.
Comment: Most commenters opposed applying the MPPR to the TC of
diagnostic cardiovascular and ophthalmology services. Commenters
maintained that the assumption that there is major duplication in
clinical labor activities is false when two studies are done in the
same session, and especially when these services are done in separate
sessions on the same day. Commenters stated that CMS' methodology of
eliminating the smaller number of minutes assigned to one code in the
frequently performed together code pairs for clinical staff and
equipment is not appropriate for pairs of services that are: (1)
Furnished by different types of clinical staff, with different
expertise and training (for example, radiology technologists and
sonographers); (2) furnished in different types of rooms (for example,
angiography suites and vascular ultrasound lab rooms); and (3) stocked
with unique equipment. According to commenters, many of the clinical
labor activities considered redundant are performed multiple times, at
different times of day, and in different rooms.
As examples, commenters referenced the sample payment reduction
calculations in the proposed rule for cardiovascular and ophthalmology
services. Concerning CPT code 93306 (transthoracic echocardiography)
and CPT code 78452 (myocardial perfusion single-photon emission
computed tomography (SPECT)), commenters noted that different
physicians, each supported by separately specialized clinical staff
perform the service in different rooms on two different types of
equipment.
Commenters indicated that clinical teams for each test
independently greet and gown the patient, provide education, obtain
consent, review previous exam results and studies and position the
patient for the test. Commenters noted that the patient is positioned
multiple times on different exam tables. According to commenters, two
different clinical staff will independently review prior x-ray,
laboratory, echocardiography studies, and other studies. Also, separate
notes are made in the patient's records, different diagnostic forms are
completed, and different quality assurance regulatory compliance
information must be documented for each test. Commenters noted that two
different rooms with different specialized equipment in two different
parts of the facility are prepared and cleaned for the two unique and
different services. Finally, two different machines are utilized by two
differently credentialed support staff to acquire independent and
unrelated clinical testing data.
Concerning CPT code 92235 (Fluorescein Angiography) and CPT code
92250 (Fundus Photography), commenters maintained that the proposal was
based on an erroneous understanding of how services vary. Commenters
noted that ophthalmic diagnostic tests are not equivalent to x-ray or
fluoroscopic imaging, where the technician simply repositions the same
device over a nearby area of the patient's body. Commenters noted that
ophthalmic diagnostic tests range from imaging to psychophysical tests
using a number of different technologies and instruments that require
patient participation by responding to various stimuli to achieve an
objective functional measurement of the anatomical structures within
the eye. For such tests the patient must be taken to a second
instrument and positioned, substantially reducing any redundancy in
direct practice expenses.

[[Page 68935]]

Another commenter indicated that visual field testing equipment,
and other eye diagnostic equipment, do not share interfaces, space or
patient information. The commenter noted that each machine requires
independent input from the testing technician; including patient name,
date, birth date, verification of the eye being tested, and there is no
shared registration of data between the two services.
According to the commenter, visual field testing requires a
dedicated space and is typically not performed at the same time as
other diagnostic tests. Patients need a quiet area away from other
testing and patients to complete the test. Both eyes are tested, each
with their own input and varying lenses that must be inserted into the
equipment. The commenter maintained that these tests require
substantial clinical staff time, patient instruction and interaction.
Ophthalmology patients are typically elderly, often visually impaired
and in need of mobility and positioning assistance in order to perform
diagnostic eye testing. Finally, the commenter highlighted that the AMA
RUC recently removed clinical staff time from some of the codes
reviewed in our analysis.
Commenters disagreed that diagnostic test resource utilization for
multiple diagnostic tests is comparable to those required for multiple
surgeries. Commenters noted that surgical procedures generally have a
90-day global period where more than 50 percent of the payment is
related to postoperative care. Commenters also noted that in large
multi-specialty practice, technical resources are located in different
physical locations.
Commenters recommended that CMS conduct its study with a new
methodology that takes into account both the frequency and the
different types of clinical staff, and the different types of rooms
involved in the services that are performed together on the same day.
Finally, commenters noted that CMS' own analysis reveals payment
reductions as low as 8 percent, indicating that a payment reduction of
25 percent would be excessive for some of these services. A commenter
expressed concern that taking this ``average'' approach would have the
effect of discouraging cardiologists and ophthalmologists from
performing certain low overhead diagnostic procedures as the payment
will be far less than the practice costs. The commenter suggested that
in previous cases the identified savings were closer to the mean on
average and would not result in such dramatic effects. Other commenters
recommended that the MPPR reduction percentage should be code-specific
up to a maximum reduction of 25 percent.
Response: We appreciate the many comments submitted on this
proposal. However, we disagree with commenters' statements that there
are minimal or no efficiencies in the TC of diagnostic cardiovascular
and ophthalmology services.
Concerning CPT code 93306 (transthoracic echocardiography) and CPT
code 78452 (myocardial perfusion single-photon emission computed
tomography (SPECT)) referenced by commenters, we agree that some
cardiovascular centers might choose to employ two differently
specialized technicians; that is, nuclear medicine and
echocardiography; to allow two different clinical staff to
independently perform the studies; and to locate the different
specialized equipment in two different parts of the practice. However,
we continue to believe that is not the typical cardiovascular center or
practice. We believe that the typical cardiovascular center performing
these diagnostic tests commonly cross-train technicians to perform both
procedures and that a single cardiologist often performs both tests for
a single patient. In addition, we continue to believe that much of the
pre-service work such as greeting and gowning the patient and reviewing
medical records and previous images is redundant. We believe that some
of the equipment used in the top code pairs is portable and can be used
in the treatment room or other diagnostic room. We also do not believe
that multiple rooms dedicated to individual testing equipment is
typical such that room preparation, greeting and gowning, and cleaning
the room are never duplicated. Overall, commenters provided general
descriptions of practices using multiple rooms and technicians to
furnish these services, without sufficient information supporting a
multiple room, dedicated clinical labor model as typical outside the
facility setting. We would review generalizable, robust data
demonstrating that an extensive practice model of multiple rooms
dedicated to individual tests and distinct dedicated technicians
trained is typical practice.
Concerning CPT code 92235 (Fluorescein Angiography) and CPT code
92250 (Fundus Photography), we acknowledge that these tests are not
equivalent to other imaging procedures. However, we believe there are
still efficiencies when furnished to the same patient due to some
duplication of clinical labor. Concerning visual field testing, we
agree that this is an interactive test, requiring the technician to
teach the patient how to perform the test; however, the most intense
instruction only occurs the first time a patient has visual field
testing. Although not considered in our analysis, we also note that
once a patient is diagnosed with glaucoma the patient usually undergo
visual field testing for the rest of their life, and their familiarity
with the test reduces the clinical labor associated with providing this
service overtime. As for the other ophthalmology tests, we understand
them to be mostly passive with minimal patient instruction.
Commenters expressed concerns that there is wide variation in the
potential efficiencies among different code pairs; that such
variability precludes broad application of a single percentage
reduction; and, that establishing new combined codes is the only
mechanism for capturing accurate payment for multiple imaging services.
In general, we believe that MPPR policies capture efficiencies when
several services of the same type are furnished in the same session and
that it is appropriate to apply a single percentage reduction to second
and subsequent procedures to capture those efficiencies. Because of the
myriad potential combinations of diagnostic services, establishing new
combined codes for each combination of advanced imaging scans is
unwieldy and impractical. An MPPR policy reflects efficiencies in the
aggregate, such as common patient history, application of multiple
tests to the same anatomical structures by the same clinical labor,
frequently with the same modality, for the same patient.
As previously noted, we found support for payment reductions
ranging from 8 to 57 percent for second and subsequent cardiovascular
procedures (volume-adjusted average reduction across all code pairs of
25 percent); and payment reductions ranging from 9 to 62 percent for
second and subsequent ophthalmology procedures (volume-adjusted average
reduction across all code pairs of 32 percent). Based on this analysis,
and because we found a relatively wide range of reductions by code
pair, we believed that an across-the-board reduction of 25 percent for
second and subsequent procedures, which is approximately the average
reduction supported by our analysis, would be appropriate. Based on
subsequent public comments, we have conducted additional analysis on
ophthalmology code pairs discussed below. In response to comment that
this MPPR application to ophthalmic and cardiovascular diagnostic
testing is not the same as the MPPR for global surgery,

[[Page 68936]]

we agree. We have provided our analysis for why we proposed a 25
percent reduction on second and subsequent diagnostic tests rather than
a 50 percent reduction. We note that, as with many of our policies, we
will continue to review this MPPR policy and refine it as needed in
future years to ensure that we continue to provide accurate payments
under the PFS.
Comment: A commenter noted that several ophthalmology codes
included in our analysis have been reviewed by the AMA RUC within the
last year, which resulted in the recommended removal of several minutes
of clinical staff time for activities that the AMA RUC determined are
also included within an accompanying office visit code. The commenter
indicated that CMS' acceptance of the AMA RUC recommendation, as well
as applying the MPPR, would effectively double the practice expense
reductions. The codes reviewed by the AMA RUC for CY 2013 were: CPT
codes 92081-92083 (Visual field examinations), CPT code 92235
(Fluorescein angiography) and CPT code 92286 (Internal eye
photography). As discussed above, commenters noted that visual field
testing equipment and other eye diagnostic equipment do not share
interfaces, space or patient information, that there is no shared
information with other tests, that the tests required separate staff
time and clinical instruction, and that visual field testing happens in
a dedicated space away from other testing.
The commenter requested that any ophthalmic tests that had their
time reduced because of duplication with an office visit should be
removed from the list of codes subject to the MPPR. Specifically, the
commenter requested that the three visual field tests CPT codes 92081,
92082 and 92083 and CPT code 92235 (Fluorescein angiography) and CPT
code 92286 (Internal eye photography) for which minutes were reduced
that were not reflected in the CMS analysis should be removed from the
list. Additionally, the commenter indicated that CPT codes 92133, 92134
and 92285 all had their clinical staff labor times previously reduced
during the AMA RUC consideration and should not be included in the
MPPR.
Commenters also expressed concern about CPT codes that have
recently been reviewed or are in the process of being reviewed under
the various misvalued services screens. Commenters noted that these
codes have already been subjected to a process where duplicative
minutes have been reduced. Therefore, they requested that any codes for
procedures where the AMA RUC has reviewed the PE inputs in the last 2
years be removed from this proposed list of services.
Response: Our original proposed rule analysis for the subject
ophthalmology codes was based on the latest AMA RUC PE worksheets
available at that time. The PE worksheets are the basis for the direct
practice expense inputs used in the PE methodology. They delineate
minutes of the clinical staff time, equipment, and supplies for each
clinical labor activity, for each CPT code. We subsequently reviewed
the CY 2013 PE worksheets for the subject codes, which appeared in many
of the ophthalmology code combinations reviewed. The AMA RUC did not
reduce clinical labor minutes for CY 2013 for two of the reviewed code
pairs (76514 with 92286 and 92081 with 92285). The most significant
change in clinical labor activities for the other reviewed code pairs
was the reduction of time for preparing and positioning the patient
from either 7 or 10 minutes to 2 minutes. Because we never reduced this
activity by more than 2 minutes, the AMA RUC changes to this clinical
labor activity had no effect on our calculation. In all cases, the
subject codes are the highest paid codes in the code combination. The
payment reductions range from 9 to 62 percent for second and subsequent
ophthalmology procedures, noted in the proposed rule, remains
unchanged. However, the volume-adjusted average reduction across all
code pairs, originally calculated at 32 percent is revised to 22
percent.
We disagree that recently reviewed codes should be exempt from the
MPPR. However, we agree that the analysis establishing an MPPR should
be based on the most current practice expense data available, and that
the recent clinical labor reductions made to the subject codes should
be taken into account. Therefore, based on our revised analysis, we are
reducing the final MPPR on ophthalmology services from 25 percent to 20
percent to more accurately reflect the new data.
Comment: Commenters expressed concern about the lack of
transparency in the methodology and data sets used to develop the
proposed MPPR. Commenters noted that CMS did not post basic data files
on its Web site until August 10, 2012, less than 30 calendar days from
the comment deadline. Commenters also indicated that the posted data
did not enable them to understand the cuts or replicate the data used
to form the basis of the proposed MPPR. Commenters believed that this
unfairly hampered their ability to fully analyze the proposal.
Commenters urged us not to implement this proposed policy until full
access to the data used to develop the policy is provided.
Response: We have provided full access to the data that we used to
develop the policy. We have listed every code pair reviewed and every
clinical labor activity considered for duplication. In addition, we
provided a description of how the analysis was conducted, the range of
reductions found and the adjusted average reduction determined for
cardiovascular and ophthalmology services. We acknowledge that the PE
worksheets were not made available simultaneously with the publication
of the proposed rule. Upon receiving requests from various specialty
groups to supplement the information we provided in the proposed rule,
we posted the PE worksheets used in the analysis on our Web site. We
posted these data in August 2012, approximately one month before the
comment period ended. We believe the information provided in the
proposed rule would have been sufficient to permit full consideration
of our proposed policy, but agreed to provide greater detail to assist
commenters in further evaluating the proposal.
Comment: Commenters indicated that we stated in the proposed rule
that the code pairs published the MPPR analysis are frequently billed
together. However, the AMA RUC determined that only four of the
cardiology pairs (CPT codes 93320-93325, 93320-93351, 93965-93970 and
78452TC-93017), and only one ophthalmology code pair (CPT codes 92235
and 92250), are typically reported together on the same date of
service. Commenters stated that the computerized ophthalmic diagnostic
imaging codes (92133 and 923134) were created in 2011 and were not
included in this analysis.
Commenters further noted that every other code pair is reported
together at or below 40 percent of the time, with over half below 20
percent. They stated that not only are these services not commonly
billed together, they are not performed on contiguous body parts and
are not always performed on the same type of equipment or even in the
same room. Further, the services would sometimes be performed by
different physicians in the same group practice.
In addition, commenters indicated that a broader analysis of the
claims data for all the analyzed codes pairs for cardiovascular and
ophthalmology suggest that only roughly four percent of the code
combinations are typically performed together on the same date of
service. Given that these services are rarely performed on the same day

[[Page 68937]]

together, it is unreasonable to assume there would be efficiencies
gained when these services are performed together.
Commenters maintained that efficiencies in practice expense are
potentially created only when the two services are similar, use the
same instrument, and are commonly performed together. Commenters
indicated, however, that for more low-volume code pairs, the practice
will not have the same level of familiarity, including the office
equipment set up, to conduct these services. Commenters further noted
that the differences between these services are such that even if all
these services were commonly billed together, physician staff could not
provide noticeable efficiencies.
Response: In the CY 2013 proposed rule (77 FR 44748), we indicated
that we analyzed the CY 2011 claims data for the most frequently billed
cardiovascular and ophthalmology diagnostic code combinations to
determine the level of duplication present when multiple services are
furnished to the same patient on the same day. For cardiovascular
diagnostic services, we reviewed the code pair/combinations with the
highest utilization in code ranges 75600 through 75893, 78414 through
78496, and 93000 through 93990. For ophthalmology diagnostic services,
we reviewed the code pair/combinations with the highest utilization in
code ranges 76510 through 76529 and 92002 through 92371.
The frequency of code combinations reviewed for cardiovascular
services ranged from 260 to 207,573 and for ophthalmology services from
4,193 to 553,502. Although utilization was low for some code
combinations reviewed, we examined the top highest frequency code
combinations for each of the five code groups examined (three for
cardiovascular and two for ophthalmology). The frequency with which a
code combination is furnished does not diminish the potential
efficiencies in clinical labor activities that will occur when that
code combination is furnished. All MPPR policies (surgery, diagnostic
imaging and therapy) apply to all code combinations of procedures
subject to the policy, regardless of the frequency that the code
combination was furnished. Therefore, we believe it is appropriate to
apply the MPPR regardless of the frequency which the code combination
is billed. Applying the MPPR to code combinations furnished
infrequently will have a minimal effect on overall payments for imaging
services. Finally, we based our final recommended percent reduction on
the volume-adjusted average reduction observed in our code pair
analysis, which ensures that when the MPPR is applied, the reduction
adjustment is more likely to reflect the actual reduction for the code
pair. MPPR policies have been consistently applied to all multiple
procedures and are not restricted to those with the highest frequency
of billings.
Comment: Commenters noted that the MPPR is partly designed to
address the growth in imaging and diagnostic services, as noted by
MedPAC. Commenters further noted that in recent years the rate of
imaging growth for both Medicare and private payor patients has slowed
considerably, and concluded that additional payment reductions are
unwarranted and unnecessary. Commenters cited an article in the August
2012 issue of Health Affairs further confirming this trend, noting that
the growth rate of advanced diagnostic imaging slowed to single digits
beginning in 2006. The study concluded that the use of MRI in Medicare
slowed to an average 2.6 percent annual growth rate from 2006-2009. In
addition, commenters maintained that 2008 and 2009 data from MedPAC and
the AMA demonstrate that the rate of volume growth for diagnostic
imaging services overall is now generally lower than the rate of growth
for all other physicians' services. Commenters further maintained that
the volume of all physicians' services grew by 3.6 percent in 2008 and
2009 while the volume of diagnostic imaging services rose by 3.3
percent in 2008 and 2.2 percent in 2009.
Another commenter noted that ultrasound services have never
experienced rapid growth, but rather, have experienced only moderate
growth. The commenter cited GAO's September 2008 report to Congress
that found that after the implementation of DRA cap, which for vascular
ultrasound services resulted in reductions of greater than 40 percent,
the disparity in utilization between ultrasound and expensive, advanced
imaging modalities continued to grow. The commenter noted that this is
reflected by the Congressional Budget Office's (CBO) December 2008
recommendations to Congress in which it excluded ultrasound and other
inexpensive imaging modalities from its policy recommendations on
advanced imaging services. Commenters concluded that imaging has
absorbed numerous payment reductions and that it is illogical to target
procedures for reduction that do not demonstrate a pattern of rapid
growth.
Response: MedPAC's analysis in its June 2011 report indicates there
has been continued annual growth in the use of imaging. While overall
growth may be lower than it was in the last decade, declining growth in
imaging services could be interpreted as a return to a more appropriate
level of imaging utilization without any accompanying evidence of
inadequate access or safety and quality concerns. As indicated
previously, MedPAC has expressed support for the MPPR on diagnostic
cardiovascular and ophthalmology services.
Comment: A commenter noted that many of the code pair combinations
identified by CMS for the MPPR on cardiovascular services are not
cardiovascular services, specifically, CPT 75600-75893, 78414-78496,
and 93000-93990. The commenter further noted that it is highly unlikely
that these codes would be furnished to the same patient on the same day
by the same physician. For example, the AMA RUC database indicates CPT
code 93980 for penile vascular study was provided by cardiologists less
than 1 percent of the time to Medicare patients in 2011. The commenter
did not recommend removing the codes from the MPPR list because their
presence produces no impact. However, the commenter indicated that the
inclusion of codes unrelated to cardiovascular creates doubts about the
thoroughness and validity of the analysis underlying the proposal.
Response: In reviewing the group of codes that we refer to as
cardiovascular services, we looked at services involving the heart and
vessels, regardless of the specialty that furnishes them. For example,
penile vascular services are vascular services. Whereas we would not
expect a urologist to perform trans-esophageal echoes, nor would we
expect a cardiologist to perform penile studies, we would not be
surprised to find some generalists, or even general vascular surgeons,
evaluating the penile vasculature along with, for example, the
vasculature of the lower extremities. And even if, as the commenter
suggested, it would be unlikely for certain codes to be billed by the
same physician on the same day, then the MPPR simply would not apply.
Comment: Commenters questioned how the MPPR on cardiovascular
services would apply to remote monitoring CPT codes 93279-93296.
Specifically, they indicated that it is unclear whether the date of
service is: (1) The day the patient transmits their data; (2) the day
the data is received in the physician's office for technician review,
technical support and

[[Page 68938]]

distribution of results; or (3) the day the physician reviews the data;
all of which may represent different dates of service. The commenters
indicated that because there is no specific identification of the date
of service within the CPT description, applying the MPPR is likely to
create confusion among physicians. Commenters recommended that we
either remove these codes from the list subject to the MPPR or issue
instructions that specifically indicate how dates of service within the
90-day monitoring period should be addressed.
Another commenter noted that CPT codes 93293 (Transtelephonic
rhythm strip pacemaker evaluation(s) single, dual, or multiple lead
pacemaker system, includes recording with and without magnet
application with analysis, review and report(s) by a physician or other
qualified health care professional, up to 90 days), 93296
(Interrogation device evaluation(s) (remote), up to 90 days; single,
dual, or multiple lead pacemaker system or implantable cardioverter-
defibrillator system, remote data acquisition(s), receipt of
transmissions and technician review, technical support and distribution
of results), and 93299 (Interrogation device evaluation(s), (remote) up
to 30 days; implantable cardiovascular monitor system or implantable
loop recorder system, remote data acquisition(s), receipt of
transmissions and technician review, technical support and distribution
of results) describe the TC for remote interrogation of the devices,
meaning that the patient is not physically present when the service is
furnished. The commenter questioned how it is possible for efficiencies
to exist in the rare circumstance these services were furnished on the
same date as a cardiovascular diagnostic service. The commenter
indicated that the inclusion of these codes demonstrates a lack of
understanding of how diagnostic services are furnished to
beneficiaries.
Response: The appropriate date of service used to bill codes
subject to the MPPR is the same as required by Medicare billing
instructions. We note that codes in the range of CPT codes 92293
through 92299 should be consistently treated regarding application of
the MPPR. Since we did not propose to include all codes in this range
for the MPPR, we have removed remote monitoring codes CPT codes 93293
and 93296 from the list of procedures subject to the MPPR. We note that
CPT code 93299 was not on the proposed list.
Comment: A commenter noted that diagnostic ultrasound offers a
number of important advantages compared to CT and MRI, in terms of
safety and effectiveness. For example, ultrasound is non-invasive and
offers real-time imaging, allowing for examinations of structures at
rest and in motion and does not use ionizing radiation. Although not
always a good substitute for other advanced imaging modalities,
ultrasound is an effective diagnostic tool in many cases.
The commenter further noted that, due to the relatively low payment
rates for ultrasound procedures, they are one of the most cost-
effective diagnostic imaging modalities. The commenter indicated that
analyses performed by GAO in 2008 and others have shown that lower cost
imaging modalities such as ultrasound have declined in use relative to
more expensive imaging modalities, negatively impacting the quality and
cost of their health care.
The commenter concluded that payment reductions to ultrasound
services have threatened the ability to furnish such services.
Therefore, the commenter requested removal of all ultrasound procedures
from the list of procedures subject to the MPPR on cardiovascular
services.
Another commenter noted that the June 2011 MedPAC report focused on
advanced diagnostic imaging services and supported increasing, rather
than decreasing, the payments for ultrasound services. The commenter
indicated that the report suggests reforming the Medicare fee-for-
service system to encourage the use of high-value services and
discourage the use of low-value services. In describing what is meant
by low-valued services, MedPAC points to situations where two services
may be equally safe and effective, yet one is more expensive than the
other. The commenter indicates that this is the situation with
ultrasound as compared to other, more expensive imaging services.
Finally, the commenter noted that the report suggested that services
that can potentially harm patients, for example, overexposure to
radiation, should be considered low-value. The commenter indicates that
ultrasound, which is non-ionizing, poses less risk to patients than
other modalities.
Response: The MPPR on diagnostic imaging procedures has included
CT, MRI and ultrasound since 2006. MedPAC, as noted in its comment
above, has supported our previous MPPR proposals and has not
recommended excluding ultrasound from MPPR on diagnostic cardiovascular
and ophthalmology services. MPPR policies are resource-based. MPPR
policies for the TC reduce payment in situations where there is overlap
in resources employed in the delivery of multiple services, with
comparable practice expense inputs, when those resources are only
employed once. We do not apply the MPPR to ultrasound used in place of
other modalities, only when it is used in addition to, other modalities
in the same session. We do not expect the MPPR to encourage
radiologists to forego ultrasound imaging in favor of advanced imaging
modalities.
Comment: Commenters noted that the AMA RUC and the CPT Editorial
Panels have been working to combine services frequently billed together
into comprehensive codes and to remove overlapping physicians' services
from the payment rates. Commenters indicated that the effort to combine
codes and reduce payment for duplicate services has been accelerated by
CMS after the threshold for analyzing services billed together was
reduced from 95 percent to 75 percent overlap.
Commenters urged CMS to be mindful of this work and to fully take
into account the AMA RUC review of the code pairs. Commenters found it
contradictory for CMS to utilize the AMA RUC process and accept the PE
payment principle, only to disregard the methodology in applying an
MPPR; and suggested that duplication of work in services performed on
the same date of service should be addressed at the individual code
level rather than through an MPPR.
Another commenter recommended that CMS ask the AMA RUC to review
the codes and make code-specific recommendations and claimed that
implementing payment reductions that are not specific does a disservice
to the entire AMA RUC process and all of the physicians who are paid
under the PFS.
Commenters disputed the assumption that an MPPR is a valid and
accurate mechanism to value services when performed on the same date of
service. Commenters indicated that, historically, the AMA RUC has
recognized that efficiencies can be gained when services are commonly
performed by the same physician on the same date of service, but only
when explicit criteria are met. The commenters indicated that the
proposal fails to meet these criteria because the services are not
commonly billed together, are not analogous services performed on
contiguous body parts, and applies to both individual physicians and
physicians in the same group practice.
Commenters maintained that the vague justification for selecting
particular codes in the CY 2013 rule stands in stark contrast to the
AMA RUC. According to commenters, the AMA RUC process set a clear and

[[Page 68939]]

distinct threshold for analyzing codes billed together, that is, 75
percent of the time. In contrast, according to commenters, the proposal
fails to define ``frequently billed'' thus creating a substantial
barrier to a clear comprehension of the MPPR expansion.
Response: As we have indicated previously (76 FR 73077-73078), the
MPPR is not intended to supersede the AMA RUC process of developing
recommended values for services described by CPT codes. We continue to
appreciate the work done by the AMA RUC and encourage the AMA RUC to
continue examining code pairs for duplication based upon the typical
case, and appropriately valuing new comprehensive codes for bundled
services that are established by the CPT Editorial Panel. We view the
AMA RUC process and the MPPR policy as complimentary and equally
reasonable means to the appropriate valuation and payment for services
under the PFS. We note that as more code combinations are bundled into
a single complete service reported by one CPT code, the MPPR policy
would no longer apply to the combined services. At the same time, the
adoption of the MPPR for the TC of diagnostic cardiovascular and
ophthalmology services will address duplications in the PE to ensure
that Medicare payment for multiple diagnostic services better reflects
the resources involved in providing those services.
As noted previously, although less precise than creating new
comprehensive codes to capture each unique combination of diagnostic
services that could be performed together, we believe that an MPPR
policy appropriately addresses efficiencies present when multiple
diagnostic services are furnished together. Moreover, we believe it
would be unwieldy and impractical to develop unique codes and values
for the myriad of procedure combinations that could be furnished
together. In addition, we believe that the expansion of the MPPR policy
to the TC of diagnostic cardiovascular and ophthalmology services is
consistent with both the GAO and MedPAC recommendations. Finally, we
already have discussed information on the determination of frequently
billed services in response to comments on this rule concerning the
most frequently billed cardiovascular and ophthalmology diagnostic code
combinations used in our analysis.
Comment: A commenter indicated that the statutory authority cited
by CMS for the proposed MPPR expansion and new MPPR policy only grants
CMS the authority to modify the reimbursement for ``codes'' and does
not provide CMS with the authority to implement multiple service
reductions. The commenter maintains that Congress bestowed CMS with
specific and limited authority to implement multiple service reductions
in another part of the Act and that this confirms that Congress did not
intend to provide the authority that CMS claims under the
``misevaluation'' clause. The commenter stated that the misvalued codes
section of the Act that addresses multiple services frequently billed
together as potentially misvalued does not give CMS the authority to
implement either of its proposed MPPR policies. The commenter did not
believe that the codes are ``misvalued'' within the meaning of the
statutory provision CMS cites, and maintains that CMS has effectively
conceded this point, as it continues to use the existing relative value
units (RVUs) for single services. The commenter maintains that CMS is
not contending that the activities and items described in the RVUs are
not, in fact, part of the service; but rather, CMS is attempting to
effectively reset the conversion factor based on its assumption that
costs can be saved in multiple procedure scenarios, but the statute
does not permit CMS to institute multiple conversion factors. Another
commenter merely suggested that there was inadequate legal basis for
the proposal.
Another commenter noted that payment rates for x-rays under the
OPPS are significantly higher than payment rates under the PFS. The
commenter indicated that application of the MPPR in a non-hospital
setting will cause procedures to shift to the hospital setting. The
commenter recommended paying the lower of (1) full payment under the
OPPS rate for procedure with the higher fee, and 50 percent of the OPPS
rate for the second procedure, or (2) full payment for both procedures
under the PFS.
Response: We believe that the application of the MPPR to the PC of
second and subsequent advanced imaging services furnished in the same
session to the same patient is fully consistent with section
1848(c)(2)(K) of the Act, especially given our authority to adopt
ancillary policies under section 1848(c)(4). We also note that we have
had several MPPR policies in place for many years before the enactment
of section 1848(c)(2)(K) of the Act.
As explained previously, section 1848(c)(2)(K)(i) of the Act
requires the Secretary to identify services within several specific
categories as being potentially misvalued and to make appropriate
adjustments to their relative values. One of the specific categories
listed under section 1834(c)(2)(K)(ii) of the Act is ``multiple codes
that are frequently billed in conjunction with furnishing a single
service.'' Although some code pair combinations will occur
infrequently, the codes subject to the MPPR are frequently found in
groups of multiple codes that are billed in conjunction with furnishing
a single service. Section 1848(c)(2)(K)(ii) of the Act specifies that
we should examine not only individual codes, but also families of
codes. We believe the MPPR policy contributes to fulfilling our
statutory obligations under section 1848(c) of the Act by more
appropriately valuing combinations of imaging services furnished to
patients and paid under the PFS.
As previously noted, Medicare has a long-standing policy of
applying an MPPR to surgical procedures. While the various MPPRs have
been adopted through notice and comment rulemaking as administrative
actions, the Congress has acknowledged our authority to adopt MPPRs by
directly modifying several of them, and by exempting the payment
changes relating to several others from budget neutrality adjustment
under the PFS. For example, section 5102(a) of the DRA exempted from
the PFS budget neutrality adjustment the changes in expenditures
resulting from the MPPR on the TC of diagnostic imaging. Section
3135(b) of the Affordable Care Act increased the MPPR reduction
percentage on the TC of diagnostic imaging from 25 to 50 percent.
Sections 3 and 4 of the PPATRA decreased the MPPR reduction percentage
on the PE of therapy services from 25 to 20 percent for therapy
services furnished in office settings, and exempted from budget
neutrality the change in expenditures resulting from the MPPR on
therapy services from budget neutrality.
We appreciate the commenter's suggestions concerning alternate
payment methodologies, that is, payments based on the OPPS rate, and we
will consider them further for possible rulemaking in the future.
Comment: A commenter noted that the proposed list of cardiovascular
procedures subject to the MPPR did not include the global services that
have different procedure codes than the corresponding technical
services, which are on the list. The commenter specifically mentioned
CPT codes 93005, 93016, 93040, and 93224, representing global services
for electrocardiograms, cardiac stress tests, rhythm
electrocardiograms, and Holter monitors, respectively. Lastly, the
commenter noted that, because such codes were not proposed for
inclusion

[[Page 68940]]

in the MPPR, it would violate the Administrative Procedure Act to
subject them to the MPPR through this final rule.
Response: The commenter is correct that we had not specifically
identified global services that have different CPT codes than the
corresponding TC on the proposed cardiovascular MPPR code list.
However, we indicated in the proposed rule (77 FR 44749) that the MPPR
applies to TC services and the TC of global services. As such, it is
consistent with the proposed policy (which we are finalizing in this
final rule with comment period as described here), and not inconsistent
with the Administrative Procedure Act, to include these codes on the
list of codes to which the MPPR will apply. In response to the comment,
we have added the following global services to the cardiovascular MPPR
list: CPT code 93000 (Electrocardiogram complete); CPT code 93015
(Cardiovascular stress test); CPT code 93040 (Rhythm ECG with report);
CPT code 93224 (Ecg monit/reprt up to 48 hrs); CPT code 93268 (ECG
record/review); and CPT code 93784 (Ambulatory BP monitoring). The
technical portion(s) of such codes will be subject to the MPPR. We note
that CPT code 93005 (Electrocardiogram tracing) is a TC service already
on the list, and CPT code 93016 (Cardiovascular stress test) is a PC
service not subject to the MPPR.
Comment: Several commenters noted that the following add-on codes
were included on the list of procedures subject to the MPPR on
cardiovascular procedures: CPT code 75774 (Artery x-ray each vessel);
CPT code 78496 (Heart first pass add-on); CPT code 93320 (Doppler echo
exam heart); CPT code 93321 (Doppler echo exam heart); and CPT code
93325 (Doppler color flow add-on). Commenters indicated that such codes
have already been valued to reflect efficiencies.
Response: We agree that these codes should not be subject to the
MMPR and have removed them from the list. While three of these codes
were included in our analysis, their inclusion had no effect on the
results. For example, CPT codes 93320 and 93325 contain none of the
clinical labor activities that might be duplicated. While duplicated
clinical labor was noted in the code combinations including CPT code
77774, it affected neither the payment reduction range of 8 to 57
percent for second and subsequent procedures, nor, due to the extremely
low utilization, the volume-adjusted average reduction across all code
pairs of 25 percent.
Comment: Commenters noted that it was unclear exactly how we
adjusted the equipment minutes in calculating the MPPR reduction and
requested additional details.
Response: In general, the minutes allocated to particular direct PE
equipment items are based on the amount of time clinical labor would
use the equipment for a typical service. When the clinical labor
minutes were reduced in our analysis, and those minutes had been used
to allocate minutes to the equipment, we made corresponding reductions
to the equipment minutes so that the equipment minutes matched the
adjusted clinical labor times.
Comment: One commenter expressed concern that because pediatric
cardiologists assess multiple aspects of a patient's cardiovascular
status, the MPPR on cardiovascular services has an unjust impact on
pediatric cardiology practices in the diagnosis and treatment of
congenital heart diseases. The commenter noted that the functional and
structural assessment of these multiple aspects requires the pediatric
cardiologist to perform multiple procedures on the pediatric patient.
It also requires special training and more time than a non-congenital
adult assessment. According to the commenter, an echocardiogram
performed to evaluate for congenital heart disease includes multiple
types of different procedures/assessments which require a unique level
of skill, training, and time when compared to the adult non-congenital
assessment.
The commenter urged us to exclude the following codes from the MPPR
on cardiovascular services: CPT codes 93303 and 93304 (Congenital
transthoracic echocardiography); CPT code 93308 (Limited non-congenital
code used for follow-up studies); and CPT codes 93320, 93321 and 93325
(Spectral and Color Doppler). The commenter maintained that excluding
these codes would have no demonstrable effect on Medicare utilization
of cardiology services since cardiologists treating adult patients
rarely bill the congenital echocardiography codes to Medicare. The
commenter noted that because most adult non-congenital transthoracic
echocardiography studies that are billed to Medicare have been bundled
into CPT code 93306 (including non-congenital echocardiography CPT
codes 93307, 93320 and 93325), the significant decrease in payment for
the subject codes would disproportionately impact pediatric
cardiologists.
The commenter further noted that state Medicaid agencies and
private sector health insurance payors use Medicare guidelines and RVU
valuations to establish their own payment protocols. Therefore, the
repercussions of these reductions will extend across all payor sources
for pediatric cardiology practices and have a materially significant
impact on the financial viability of many practices. Finally, the
commenter indicated that the inclusion of the subject codes in the
proposed MPPR would exacerbate the current shortage of available
fellowship positions that recruit medical residents into pediatric
cardiology, and will impair their ability to provide patient access to
this life-saving specialty care, especially to medically underserved
areas.
Response: We appreciate the commenter's concerns as to the impact
of this policy on pediatricians. While we recognize that
echocardiography training for congenital cardiovascular abnormalities
may be different from that for adults, we are not convinced that the
MPPR does is not equally applicable to pediatric and adult
cardiologists. The purpose of the MPPR policy is to account for the
efficiencies inherent when multiple procedures are furnished together.
We do not believe that those efficiencies differ significantly from
diagnostic testing on adults versus pediatric patients for these code
pairs.
We considered the specific scenarios presented by the commenter's
in the context of MPPR methodology and identified the same or similar
efficiencies regardless of whether the multiple diagnostic procedures
were targeted at abnormal flow in response to congenital structural
abnormalities or were targeted at functional abnormalities in response
to primary vascular disease. We also noted that, whereas practitioners
who perform more services that are reported separately will be impacted
more by the MPPR, practitioners who report more services that have
recently been bundled together will have a similar impact due to the
efficiencies that were considered by CMS in the valuation of those new
bundled codes. Finally, we note that the codes are not specific to
pediatric patients so it is not possible to exclude them for pediatric
cardiologists alone.
In response to the commenters concerns that other insurers may
adopt our policies, we do not modify Medicare payment policy based on
the fact that Medicaid and other payors may adopt such policies. We
understand that other payors have their own unique payment systems and
consider the appropriateness of CMS valuations in their decisions to
accept, modify or ignore our payments. We continue to believe that the
MPPR policy that we are

[[Page 68941]]

adopting in this final rule with comment period is appropriate for
Medicare. Therefore, we are not excluding these codes from the MPPR.
Comment: Several commenters maintained that the policy could result
in the following unintended consequences:
Create a disincentive for specialists to provide
efficient, high quality and continuous care to their patients. Penalize
the use of the appropriate sub-specialist, resulting in generalist
physicians conducting multiple reads, leading to a degradation of
diagnostic interpretation quality.
Have a negative impact on investment in new advanced
imaging technology and stifle innovation. New equipment offers more
precise images and the addition of highly-trained personnel to a
medical practice is integral to high quality patient care. Inhibit
staff training and the addition of staff in a state of uncertainty.
Lead to a forced reduction in necessary services,
compromising patient access to life-saving diagnostic imaging services
in all settings, including independent practices, community hospitals,
and large academic medical centers.
Drive more services out of physicians' offices and into
more expensive hospital settings, fragment care, and increase patient
costs.
Reduce the efficiency of patient care and inconvenience
patients because many would be scheduled for multiple procedures over
multiple days instead of just one day. This would particularly
disadvantage patients with serious medical conditions, such as multiple
traumas, heart attacks, strokes, and cancer, who require frequent and
multiple imaging.
Disproportionally affect radiologists in academic medical
centers who are often part of large group practices and who furnish
care to a more complex patient population. These patients are often
suffering from acute trauma or undergoing treatment for cancer and are
more likely to have multiple examinations on the same day.
Contradict the goal to focus more on preventive care, as
diagnostic tests enable the early detection of potentially serious
conditions.
Response: We have no reason to believe that appropriately valuing
services for payment under the PFS by revising payment to reflect
duplication in the TC of diagnostic cardiovascular and ophthalmology
multiple services would negatively impact quality of care, be counter-
productive to the goal of promoting preventive care, or limit patients'
access to medically reasonable and necessary imaging services, or
disproportionally affect certain groups. We have no evidence to suggest
any of the adverse impacts identified by the commenters have resulted
from the implementation of the MPPR on the TC of imaging in 2006. In
fact, to the contrary, the analysis in MedPAC's June 2011 report
indicates there has been continued high annual growth in the use of
imaging. Further, it is worth noting that, without any accompanying
evidence of inadequate access or safety and quality concerns, declining
growth in imaging services could be interpreted as a return to a more
appropriate level of imaging utilization.
For the ordering and scheduling of cardiovascular or ophthalmology
services for Medicare beneficiaries, we require that Medicare-covered
services be appropriate to beneficiary needs. We would not expect the
adoption of an MPPR for the TC of diagnostic cardiovascular and
ophthalmology services to result in services being furnished on
separate days by one physician merely so that the physician may garner
increased payment. We agree with the commenters who noted that such an
unprofessional response on the part of practitioners would be
inefficient and inappropriate care for the beneficiary. We will monitor
access to care and patterns of delivery for cardiovascular and
ophthalmology services to beneficiaries, with particular attention
focused on identifying any clinically inappropriate changes in timing
of the delivery of such services.
In summary, after consideration of the public comments received, we
are adopting our CY 2013 proposal to apply an MPPR to the TC of
diagnostic cardiovascular and ophthalmology services, with a
modification to apply a 20 percent reduction for diagnostic
ophthalmology services rather than the 25 percent reduction we had
proposed. The reduction percentage for diagnostic cardiovascular
services remains at 25 percent, as proposed. We continue to believe
that efficiencies exist in the TC of multiple diagnostic cardiovascular
and ophthalmology services and we will continue to monitor code
combinations for possible future adjustments to the reduction
percentage applied through this MPPR policy.
Specifically, beginning in CY 2013 we are adopting an MPPR that
applies a 25 percent reduction to the TC of second and subsequent
diagnostic cardiovascular, and a 20 percent reduction to the TC of
second and subsequent diagnostic ophthalmology services, furnished by
the same physician (or physicians in the same group practice) to the
same beneficiary, on the same day. In Table 10, we provide examples
illustrating the current and CY 2013 payment amounts:

Table 10--Illustration of Current and CY 2013 Payments
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total current Total CY 2013
Code 78452 Code 93306 payment payment Payment calculation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sample Cardiovascular Payment Reduction *
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC............................................. $77.00 $65.00 $142.00 $142.00 no reduction.
TC............................................. 427.00 148.00 575.00 538.00 $427 + (.75 x $148).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Global......................................... 504.00 213.00 717.00 680.00 $142 + $427 + (.75 x $148).
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code 92235 Code 92250 Total current Total CY 2013 Payment calculation
payment payment
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sample Ophthalmology Payment Reduction *
--------------------------------------------------------------------------------------------------------------------------------------------------------
PC............................................. $46.00 $23.00 $69.00 $69.00 no reduction.
TC............................................. 92.00 53.00 145.00 134.40 $92 + (.80 x $53).
Global......................................... 138.00 76.00 214.00 203.40 $69 + $92 + (.80 x $53).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Dollar amounts are for illustrative purposes and do not reflect actual payment amounts.

[[Page 68942]]

No changes have been made to the proposed list for diagnostic
ophthalmology services. We have revised the proposed list for
diagnostic cardiovascular services by removing codes deleted for CY
2013, add-on codes, and remote monitoring codes, and adding global
codes corresponding to technical-only codes already on the list:

Table 11--Changes to the Proposed List of Procedures Subject to the MPPR on Diagnostic Cardiovascular Services
----------------------------------------------------------------------------------------------------------------
Code Descriptor Added/deleted Reason
----------------------------------------------------------------------------------------------------------------
75650................. Artery x-rays head Deleted...................... Deleted for CY 2013.
& neck.
75660................. Artery x-rays head Deleted...................... Deleted for CY 2013.
& neck.
75662................. Artery x-rays head Deleted...................... Deleted for CY 2013.
& neck.
75665................. Artery x-rays head Deleted...................... Deleted for CY 2013.
& neck.
75671................. Artery x-rays head Deleted...................... Deleted for CY 2013.
& neck.
75676................. Artery x-rays neck. Deleted...................... Deleted for CY 2013.
75680................. Artery x-rays neck. Deleted...................... Deleted for CY 2013.
75685................. Artery x-rays spine Deleted...................... Deleted for CY 2013.
75774................. Artery x-ray each Deleted...................... Add-on Code.
vessel.
78496................. Heart first pass Deleted...................... Add-on Code.
add-on.
93000................. Electrocardiogram Added........................ Global Code.
complete.
93015................. Cardiovascular Added........................ Global Code.
stress test.
93040................. Rhythm ECG with Added........................ Global Code.
report.
93224................. Ecg monit/reprt up Added........................ Global Code.
to 48 hrs.
93268................. ECG record/review.. Added........................ Global Code.
93293................. Pm phone r-strip Deleted...................... Remote monitoring code.
device eval.
93296................. Pm/icd remote tech Deleted...................... Remote monitoring code.
serv.
93320................. Doppler echo exam Deleted...................... Add-on Code.
heart.
93321................. Doppler echo exam Deleted...................... Add-on Code.
heart.
93325................. Doppler color flow Deleted...................... Add-on Code.
add-on.
93784................. Ambulatory BP Added........................ Global Code.
monitoring.
----------------------------------------------------------------------------------------------------------------

The complete list of services subject to the MPPR for the TC of
diagnostic cardiovascular and ophthalmology services is shown in
Addendum X. The PFS budget neutrality provision is applicable to the
new MPPR for the TC of diagnostic cardiovascular and ophthalmology
services. Therefore, the estimated reduced expenditures for such
services have been redistributed to increase payment for other PFS
services. We refer readers to section VIII.C. of this final rule with
comment period for further discussion of the impact of this policy.

Table 12--Diagnostic Cardiovascular Services Subject to the Multiple
Procedure Payment Reduction
------------------------------------------------------------------------
Code Short descriptor
------------------------------------------------------------------------
75600................................ Contrast x-ray exam of aorta.
75605................................ Contrast x-ray exam of aorta.
75625................................ Contrast x-ray exam of aorta.
75630................................ X-ray aorta leg arteries.
75658................................ Artery x-rays arm.
75705................................ Artery x-rays spine.
75710................................ Artery x-rays arm/leg.
75716................................ Artery x-rays arms/legs.
75726................................ Artery x-rays abdomen.
75731................................ Artery x-rays adrenal gland.
75733................................ Artery x-rays adrenals.
75736................................ Artery x-rays pelvis.
75741................................ Artery x-rays lung.
75743................................ Artery x-rays lungs.
75746................................ Artery x-rays lung.
75756................................ Artery x-rays chest.
75791................................ Av dialysis shunt imaging.
75809................................ Nonvascular shunt x-ray.
75820................................ Vein x-ray arm/leg.
75822................................ Vein x-ray arms/legs.
75825................................ Vein x-ray trunk.
75827................................ Vein x-ray chest.
75831................................ Vein x-ray kidney.
75833................................ Vein x-ray kidneys.
75840................................ Vein x-ray adrenal gland.
75842................................ Vein x-ray adrenal glands.
75860................................ Vein x-ray neck.
75870................................ Vein x-ray skull.
75872................................ Vein x-ray skull.
75880................................ Vein x-ray eye socket.
75885................................ Vein x-ray liver.
75887................................ Vein x-ray liver.
75889................................ Vein x-ray liver.
75891................................ Vein x-ray liver.
75893................................ Venous sampling by catheter.
78428................................ Cardiac shunt imaging.
78445................................ Vascular flow imaging.
78451................................ Ht muscle image spect sing.
78452................................ Ht muscle image spect mult.
78453................................ Ht muscle image planar sing.
78454................................ Ht musc image planar mult.
78456................................ Acute venous thrombus image.
78457................................ Venous thrombosis imaging.
78458................................ Ven thrombosis images bilat.
78466................................ Heart infarct image.
78468................................ Heart infarct image (ef).
78469................................ Heart infarct image (3D).
78472................................ Gated heart planar single.
78473................................ Gated heart multiple.
78481................................ Heart first pass single.
78483................................ Heart first pass multiple.
78494................................ Heart image spect.
93000................................ Electrocardiogram complete.
93005................................ Electrocardiogram tracing.
93015................................ Cardiovascular stress test.
93017................................ Cardiovascular stress test.
93024................................ Cardiac drug stress test.
93025................................ Microvolt t-wave assess.
93040................................ Rhythm ECG with report.
93041................................ Rhythm ecg tracing.
93224................................ Ecg monit/reprt up to 48 hrs.
93225................................ Ecg monit/reprt up to 48 hrs.
93226................................ Ecg monit/reprt up to 48 hrs.
93229................................ Remote 30 day ecg tech supp.
93268................................ ECG record/review.
93270................................ Remote 30 day ecg rev/report.
93271................................ Ecg/monitoring and analysis.
93278................................ ECG/signal-averaged.
93279................................ Pm device progr eval sngl.
93280................................ Pm device progr eval dual.
93281................................ Pm device progr eval multi.
93282................................ Icd device prog eval 1 sngl.
93283................................ Icd device progr eval dual.
93284................................ Icd device progr eval mult.
93285................................ Ilr device eval progr.
93286................................ Pre-op pm device eval.

[[Page 68943]]

93287................................ Pre-op icd device eval.
93288................................ Pm device eval in person.
93289................................ Icd device interrogate.
93290................................ Icm device eval.
93291................................ Ilr device interrogate.
93292................................ Wcd device interrogate.
93303................................ Echo transthoracic.
93304................................ Echo transthoracic.
93306................................ Tte w/doppler complete.
93307................................ Tte w/o doppler complete.
93308................................ Tte f-up or lmtd.
93312................................ Echo transesophageal.
93314................................ Echo transesophageal.
93318................................ Echo transesophageal intraop.
93350................................ Stress tte only.
93351................................ Stress tte complete.
93701................................ Bioimpedance cv analysis.
93724................................ Analyze pacemaker system.
93784................................ Ambulatory BP monitoring.
93786................................ Ambulatory BP recording.
93788................................ Ambulatory BP analysis.
93880................................ Extracranial study.
93882................................ Extracranial study.
93886................................ Intracranial study.
93888................................ Intracranial study.
93890................................ Tcd vasoreactivity study.
93892................................ Tcd emboli detect w/o inj.
93893................................ Tcd emboli detect w/inj.
93922................................ Upr/l xtremity art 2 levels.
93923................................ Upr/lxtr art stdy 3+ lvls.
93924................................ Lwr xtr vasc stdy bilat.
93925................................ Lower extremity study.
93926................................ Lower extremity study.
93930................................ Upper extremity study.
93931................................ Upper extremity study.
93965................................ Extremity study.
93970................................ Extremity study.
93971................................ Extremity study.
93975................................ Vascular study.
93976................................ Vascular study.
93978................................ Vascular study.
93979................................ Vascular study.
93980................................ Penile vascular study.
93981................................ Penile vascular study.
93990................................ Doppler flow testing.
------------------------------------------------------------------------

Table 13--Diagnostic Ophthalmology Services Subject to the Multiple
Procedure Payment Reduction
------------------------------------------------------------------------
Code Descriptor
------------------------------------------------------------------------
76510................................ Ophth us b & quant a.
76511................................ Ophth us quant a only.
76512................................ Ophth us b w/non-quant a.
76513................................ Echo exam of eye water bath.
76514................................ Echo exam of eye thickness.
76516................................ Echo exam of eye.
76519................................ Echo exam of eye.
92025................................ Corneal topography.
92060................................ Special eye evaluation.
92081................................ Visual field examination(s).
92082................................ Visual field examination(s).
92083................................ Visual field examination(s).
92132................................ Cmptr ophth dx img ant segmt.
92133................................ Cmptr ophth img optic nerve.
92134................................ Cptr ophth dx img post segmt.
92136................................ Ophthalmic biometry.
92228................................ Remote retinal imaging mgmt.
92235................................ Eye exam with photos.
92240................................ Icg angiography.
92250................................ Eye exam with photos.
92265................................ Eye muscle evaluation.
92270................................ Electro-oculography.
92275................................ Electroretinography.
92283................................ Color vision examination.
92284................................ Dark adaptation eye exam.
92285................................ Eye photography.
92286................................ Internal eye photography.
------------------------------------------------------------------------

Table 14--Frequently Billed Diagnostic Cardiovascular Combinations
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code Descriptor Code Descriptor Code Descriptor Code Descriptor
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code Range 75600-75893
--------------------------------------------------------------------------------------------------------------------------------------------------------
75710.................... Artery x-rays arm/leg. 75791 Av dialysis shunt
imaging.
75625.................... Contrast x-ray exam of 75716 Artery x-rays arms/
aorta. legs.
75625.................... Contrast x-ray exam of 75716 Artery x-rays arms/ 75774 Artery x-ray each
aorta. legs. vessel.
75820.................... Vein x-ray arm/leg.... 75827 Vein x-ray chest......
75625.................... Contrast x-ray exam of 75710 Artery x-rays arm/leg.
aorta.
75791.................... Av dialysis shunt 75827 Vein x-ray chest......
imaging.
75658.................... Artery x-rays arm..... 75791 Av dialysis shunt 75820 Vein x-ray arm/leg... 75827 Vein x-ray chest.
imaging.
75710.................... Artery x-rays arm/leg. 75774 Artery x-ray each
vessel.
75820.................... Vein x-ray arm/leg.... 93931 Upper extremity study.
75791.................... Av dialysis shunt 75820 Vein x-ray arm/leg....
imaging.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code Range 78414-78496
--------------------------------------------------------------------------------------------------------------------------------------------------------
78452.................... Ht muscle image spect 93306 Tte w/doppler complete
mult.
78452.................... Ht muscle image spect 93017 Cardiovascular stress
mult. test.
78452.................... Ht muscle image spect 93306 Tte w/doppler complete 93880 Extracranial study...
mult.
78452TC.................. Ht muscle image spect 93017 Cardiovascular stress
mult. test.
78452.................... Ht muscle image spect 93880 Extracranial study....
mult.

[[Page 68944]]

78452TC.................. Ht muscle image spect 93306 Tte w/doppler complete
mult.
78452.................... Ht muscle image spect 93017 Cardiovascular stress 93306 Tte w/doppler
mult. test. complete.
78451.................... Ht muscle image spect 93306 Tte w/doppler complete
sing.
78452TC.................. Ht muscle image spect 93306TC Tte w/doppler complete
mult.
78452.................... Ht muscle image spect 93306 Tte w/doppler complete 93880 Extracranial study... 93978 Vascular study.
mult.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Code Range 93000-93990
--------------------------------------------------------------------------------------------------------------------------------------------------------
93306.................... Tte w/doppler complete 93880 Extracranial study....
93320.................... Doppler echo exam 93325 Lower extremity study. 93351 Stress tte complete..
heart.
93922.................... Upr/l xtremity art 2 93925 Lower extremity study.
levels.
93923.................... Upr/lxtr art stdy 3+ 93925 Lower extremity study.
lvls.
93306TC.................. Tte w/doppler complete 93880TC Extracranial study....
93880.................... Extracranial study.... 93978 Vascular study........
93284.................... Icd device progr eval 93290 Icm device eval.......
mult.
93922.................... Upr/l xtremity art 2 93926 Lower extremity study.
levels.
93965.................... Extremity study....... 93970 Extremity study.......
93925.................... Lower extremity study. 93970 Extremity study.......
--------------------------------------------------------------------------------------------------------------------------------------------------------

Table 15--Frequently Billed Diagnostic Ophthalmology Combinations
----------------------------------------------------------------------------------------------------------------
Code Descriptor Code Descriptor Code Descriptor
----------------------------------------------------------------------------------------------------------------
Code Range 76510-76529
----------------------------------------------------------------------------------------------------------------
76514................... Echo exam of eye 92133 Cmptr ophth img
thickness. optic nerve.
76514................... Echo exam of eye 92083 Visual field 92133 Cmptr ophth img
thickness. examination(s). optic nerve.
76514................... Echo exam of eye 92083 Visual field
thickness. examination(s).
76514................... Echo exam of eye 92250 Eye exam with photos
thickness.
76514................... Echo exam of eye 92083 Visual field 92250 Eye exam with
thickness. examination(s). photos.
76512................... Ophth us b w/non- 92134 Cptr ophth dx img
quant a. post segmt.
76512................... Ophth us b w/non- 92250 Eye exam with photos
quant a.
76514................... Echo exam of eye 92286 Internal eye
thickness. photography.
76514................... Echo exam of eye 92134 Cptr ophth dx img
thickness. post segmt.
76512................... Ophth us b w/non- 92235 Eye exam with photos 92250 Eye exam with
quant a. photos.
----------------------------------------------------------------------------------------------------------------
Code Range 92002-92371
----------------------------------------------------------------------------------------------------------------
92083................... Visual field 92133 Cmptr ophth img
examination(s). optic nerve.
92235................... Eye exam with photos 92250 Eye exam with photos
92083................... Visual field 92250 Eye exam with photos
examination(s).
92083................... Visual field 92134 Cptr ophth dx img
examination(s). post segmt.
92134................... Cptr ophth dx img 92235 Eye exam with photos
post segmt.
92134................... Cptr ophth dx img 92250 Eye exam with photos
post segmt.
92134................... Cptr ophth dx img 92235 Eye exam with photos 92250 Eye exam with
post segmt. photos.
92250................... Eye exam with photos 92285 Eye photography.....
92082................... Visual field 92250 Eye exam with photos
examination(s).
92081................... Visual field 92285 Eye photography.....
examination(s).
----------------------------------------------------------------------------------------------------------------

d. Procedures Subject to the OPPS Cap
We are proposing to add the new codes in Table 16 to the list of
procedures subject to the OPPS cap, effective January 1, 2013. Some of
these codes are replacement codes for codes deleted for CY 2013. These
procedures meet the definition of imaging under section 5102(b) of the
DRA. These codes are being added on an interim final basis and their
addition as procedures subject to the OPPS cap is open to public
comment in this final rule with comment period.

[[Page 68945]]

Table 16--Additions and Deletions to the List of Procedure Subject to the OPPS CAP on Imaging Services
----------------------------------------------------------------------------------------------------------------
Additions Deletions
----------------------------------------------------------------------------------------------------------------
Code Descriptor Code Descriptor
----------------------------------------------------------------------------------------------------------------
31620........................ Endobronchial us add-on. 71040........................ Contrast x-ray of
bronchi.
36221........................ Place cath thoracic 71060........................ Contrast x-ray of
aorta. bronchi.
36222........................ Place cath carotd/inom 75650........................ Artery x-rays head &
art. neck.
36223........................ Place cath carotd/inom 75660........................ Artery x-rays head &
art. neck.
36224........................ Place cath carotd art... 75662........................ Artery x-rays head &
neck.
36225........................ Place cath subclavian 75665........................ Artery x-rays head &
art. neck.
36226........................ Place cath vertebral art 75671........................ Artery x-rays head &
neck.
36227........................ Place cath xtrnl carotid 75676........................ Artery x-rays neck.
36228........................ Place cath intracranial 75680........................ Artery x-rays neck.
art.
43206........................ Esoph optical 75685........................ Artery x-rays spine.
endomicroscopy.
43252........................ Upper GI optical 75900........................ Intravascular cath
endomicroscopy. exchange.
77080........................ DXA bone density axial.. 75961........................ Retrieval broken
catheter.
77082........................ DXA bone density vert fx 77424........................ Intraoperative radiation
delivery.
78013........................ Thyroid imaging w/blood 78006........................ Thyroid imaging with
flow. uptake.
78014........................ Thyroid imaging w/blood 78007........................ Thyroid image mult
flow. uptakes.
78070........................ Parathyroid planar 78010........................ Thyroid imaging.
imaging.
78071........................ Parathyroid planar 78011........................ Thyroid imaging with
imaging w/o subtrj. flow.
78072........................ Parathyroid imaging w/
spect & ct.
88375........................ Optical endomicroscopy
interp.
91110........................ GI tract capsule
endoscopy.
91111........................ Esophageal capsule
endoscopy.
92287........................ Internal eye photography
----------------------------------------------------------------------------------------------------------------

C. Overview of the Methodology for the 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, which amended
section 1848(c) of the Act, 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 (75
FR 73208), malpractice RVUs for new and revised codes effective before
the next Five-Year Review of Malpractice (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. 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 malpractice 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.
As we indicated in the CY 2013 PFS proposed rule, we will continue
our current approach for determining malpractice RVUs for new/revised
codes. In section II.M.2. of this final rule with comment period, we
have published a list of new/revised codes and the malpractice
crosswalk(s) used for determining their malpractice RVUs. These
malpractice RVUs for new/revised codes will be implemented for CY 2013
on an interim final basis and the malpractice crosswalks are subject to
public comment. We will respond to comments and finalize the
malpractice crosswalks for the majority of these codes in the CY 2014
PFS final rule with comment period.

D. 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, work, practice expense
(PE), and malpractice). While requiring that the PE and MP GPCIs
reflect the full relative cost differences, section 1848(e)(1)(A)(iii)
of the Act requires that the 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 2011. The statute was
amended by section 303 of the Temporary Payroll

[[Page 68946]]

Tax Cut Continuation Act of 2011 (TPTCCA) (Pub. L. 112-78) to extend
the 1.0 floor for the work GPCIs through February 29, 2012. The statute
was again amended by section 3004 of the Middle Class Tax Relief and
Job Creation Act of 2012 (MCTRJCA) (P.L. 112-399) to extend the 1.0
work floor for GPCIs throughout the remainder of CY 2012 (that is, for
services furnished no later than December 31, 2012). During the
development of the CY 2012 PFS final rule with comment period, neither
TPTCCA nor MCTRJCA had been enacted and, because the work GPCI floor
was set to expire at the end of 2011, the GPCIs published in Addendum E
of the CY 2012 PFS final rule with comment period did not reflect the
1.0 work floor. Following the enactment of the legislation, appropriate
changes to the CY 2012 GPCIs to reflect the 1.0 work floor required by
section 303 of the TPTCCA and section 3004 of the MCTRJCA.
Since the 1.0 work GPCI floor provided in section 1848 (e)(1)(E) of
the Act is set to expire prior to the implementation of the CY 2013
updates to the PFS, the proposed CY 2013 work GPCIs and summarized
geographic adjustment factors (GAFs) published in addendums D and E of
this CY 2013 PFS proposed rule do not reflect the 1.0 work GPCI floor
for CY 2013. As required by section 1848 (e)(1)(G) and section1848
(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE
GPCI floor for frontier states are applicable in CY 2013 and are
reflected in addendums D and E.
In the CY 2012 PFS final rule with comment period, we made several
refinements to the GPCIs (76 FR 73081 through 73092), including
revising the sixth GPCI update to reflect the most recent data, with
modifications. Specifically, we finalized our proposal to change the
GPCI cost share weights for CY 2012 to reflect the most recent rebased
and revised Medicare Economic Index (MEI). As a result, the cost share
weight for the work GPCI (as a percentage of the total) was changed
from 52.466 percent to 48.266 percent, and the cost share weight for
the PE GPCI was revised from 43.669 percent to 47.439 percent with a
change in the employee compensation component from 18.654 to 19.153
percentage points. The cost share weight for the office rent component
of the PE GPCI was changed from 12.209 percent to 10.223 percentage
points (fixed capital with utilities), and the medical equipment,
supplies, and other miscellaneous expenses component was changed from
12.806 percent to 9.968 percentage points. In addition, we finalized
the weight for purchased services at 8.095 percentage points, of which
5.011 percentage points are adjusted for geographic cost differences.
Lastly, the cost share weight for the malpractice GPCI was revised from
3.865 percent to 4.295 percent. Table 17 displays the cost share
weights that were finalized in the CY 2012 final rule with comment
period. Note that the employee compensation; office rent; purchased
services; and equipment supplies and other cost share weights sum to
the total PE GPCI cost share weights of 47.439 percent.

Table 17--Cost Share Weights Finalized in CY 2012 GPCI Update
------------------------------------------------------------------------
Cost share
Expense category weights %
------------------------------------------------------------------------
Work.................................................... 48.266
Practice Expense........................................ 47.439
Employee Compensation................................. 19.153
Office Rent........................................... 10.223
Purchased Services.................................... 8.095
Equipment, Supplies, and Other........................ 9.968
Malpractice Insurance................................... 4.295
------------------------------------------------------------------------

We also finalized several other policies in the CY 2012 final rule
with comment period including the use of 2006 through 2008 American
Community Survey (ACS) two-bedroom rental data as a proxy for the
relative cost difference in physician office rent. In addition, we
created a purchased services index to account for labor-related
services within the ``all other services'' and ``other professional
expenses'' MEI components. In response to public commenters who
recommended that we use Bureau of Labor Statistics (BLS) Occupational
Employment Statistics (OES) data to capture the ``full range'' of
occupations included in the offices of physician industry to calculate
the nonphysician employee wage component (also referred to as the
employee wage index) of the PE GPCI, we finalized a policy of using 100
percent of the total wage share of nonphysician occupations in the
offices of physicians' industry to calculate the nonphysician employee
wage component of the PE GPCI.
2. Recommendations From the Institute of Medicine
Concurrent with our CY 2012 rulemaking cycle, the Institute of
Medicine released the final version of its first of two anticipated
reports entitled ``Geographic Adjustment in Medicare Payment: Phase I:
Improving Accuracy, Second Edition'' on September 28, 2011. This report
included an evaluation of the accuracy of GAFs for the hospital wage
index and the GPCIs, as well as the methodology and data used to
calculate them. Several of the policies that we finalized in CY 2012
rulemaking addressed recommendations contained in the Institute of
Medicine's first report. Because we did not have adequate time to
completely address the Institute of Medicine's Phase I report
recommendations during CY 2012 rulemaking, we included a discussion in
the CY 2013 proposed rule (77 FR 44756) about the recommendations that
were not implemented or discussed in the CY 2012 final rule with
comment period.
As we anticipated in the CY 2013 proposed rule, the Institute of
Medicine's second report, entitled ``Geographic Adjustment in Medicare
Payment--Phase II: Implications for Access, Quality, and Efficiency,''
was released July 17, 2012. The Phase II report evaluates the effects
of GAFs (hospital wage index and GPCIs) on the distribution of the
healthcare workforce, quality of care, population health, and the
ability to provide efficient, high value care. Once we have had an
opportunity to fully evaluate the report and its recommendations we
will respond to its recommendations in subsequent rulemaking.
3. GPCI Discussion for CY 2013
CY 2013 is the final year of the sixth GPCI update and, because we
will propose updates next year, we did not include any proposals
related to the GPCIs for the CY 2013 PFS. In response to public
inquiries about exceptions to the calculated GPCIs, we provided a brief
discussion about the permanent 1.0 PE floor for frontier states, the
1.5 work floor for Alaska, the GPCIs for the Puerto Rico payment
locality, and the expiration of the GPCI 1.0 work floor required under
section 1848 (e)(1)(E) of the Act. We also discussed recommendations
from the first Institute of Medicine report that were not addressed
during CY 2012 rulemaking in the CY 2013 proposed rule. We have
included this discussion below.
a. Alaska Work Floor and PE GPCI Floor for Frontier States
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.
Therefore, the 1.5 work floor for Alaska will remain in effect in CY
2013. In addition, section 1848(e) (1)(I) of the Act establishes 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,

[[Page 68947]]

beginning in CY 2011, we applied a 1.0 PE GPCI floor for physicians'
services furnished in states determined to be frontier states. The
following states met the statutory criteria to be considered frontier
states for CY 2012: Montana, North Dakota, Nevada, South Dakota, and
Wyoming. There are no changes to those states identified as frontier
states for CY 2013.
b. GPCI Assignments for the Puerto Rico Payment Locality
As noted in the CY 2013 proposed rule, we have received inquiries
from representatives of the Puerto Rico medical community regarding our
policies for determining the GPCIs for the Puerto Rico payment
locality. While we did not make any proposals related to the GPCIs for
Puerto Rico, in response to those inquiries, we provided the following
discussion regarding the GPCIs assigned to the Puerto Rico payment
locality. We anticipate recalculating all the GPCIs in the seventh GPCI
update, currently anticipated to be implemented for CY 2014.
As noted above, we are required by section 1848(e)(1)(A) of the Act
to develop separate GPCIs to measure relative resource cost differences
among localities compared to the national average for each of the three
fee schedule components: Work, PE and malpractice expense. To calculate
these GPCI values, we rely on three primary data sources. We currently
use the 2006-2008 BLS OES data to calculate the work GPCI, the
nonphysician employee wage component of PE GPCI, and the labor costs
associated with the purchased services component of PE GPCI. We use
2006-2008 ACS data to calculate the office rent component of the PE
GPCI. Finally, we use 2006-2007 malpractice premium data to calculate
the malpractice GPCI. For all localities, including Puerto Rico, we
assume equipment, supplies, and other expenses are purchased in a
national market and that the costs do not vary by geographic location.
Therefore, we do not use data on the price of equipment, supplies, and
expenses across localities in calculating PE GPCIs. With the exception
of the malpractice GPCI, we have current data from the applicable
sources allowing us to calculate the work and PE GPCIs for the Puerto
Rico payment locality. The 2006-2008 BLS OES data and rental values
derived from the 2006-2008 ACS indicate that the costs associated with
operating a physician practice in Puerto Rico are the lowest among all
payment localities.
To calculate the malpractice GPCI for the various Medicare PFS
localities, we collect malpractice insurance market share and premium
data from state departments of insurance and from state rate filings.
As discussed in our contractor's report (Final Report on the Sixth
Update of the Geographic Practice Cost Index for the Medicare Physician
Fee Schedule page. 41), for the fourth, fifth, and sixth GPCI updates
we were not able to collect this data for the Puerto Rico payment
locality. Therefore, we carried over the malpractice GPCI value of
0.249 from previous GPCI updates when malpractice premium data were
last available. It is important to note that we have a source for more
current malpractice premium data for Puerto Rico for use in the
upcoming seventh GPCI update. We are working with the relevant
officials in Puerto Rico to acquire these data for use in future
rulemaking.
For a detailed discussion regarding the methodology used to
calculate the various components of the Puerto Rico GPCIs, we referred
readers to our contractor's report from November of 2010 entitled
``Final Report on the Sixth Update of the Geographic Practice Cost
Index for the Medicare Physician Fee Schedule'' available on our Web
site at www.cms.gov/PhysicianFeeSched/downloads/GPCI_Report.pdf.
In the CY 2013 proposed rule, we also encouraged comments from
stakeholders regarding potential data sources that may be available for
calculating the Puerto Rico malpractice GPCI.
Comment: In response to our inquiry regarding potential sources for
data that could be used in calculating a malpractice GPCI for Puerto
Rico, we received numerous comments about the costs of practicing
medicine in Puerto Rico. The commenters primarily expressed concern
about the PE GPCI (with emphases on the rent component) and the
malpractice GPCI. The commenters stated that the current GPCI values
for Puerto Rico are low in comparison to other PFS localities and that
this disparity may create incentives for doctors to move their
practices to the continental United States. As a result, the commenters
explained that access to both primary and specialty care for Medicare
beneficiaries residing in Puerto Rico could be compromised. Several
stakeholders provided a report on a comprehensive study entitled ``Cost
of Medical Services in Puerto Rico.'' The report included results from
a physician survey on the costs of operating a medical practice in
Puerto Rico, including the cost for obtaining malpractice insurance.
For example, the report included information about the leading
malpractice insurers in Puerto Rico, the amount of malpractice
insurance coverage typically purchased by physicians, and the cost of
malpractice insurance by primary and specialty care providers. In
addition to malpractice insurance costs, the report also included
information on the cost of employees, contracted services, rent and
utilities, medical equipment and supplies in Puerto Rico as well as
information on the major concerns, demographics, and work patterns of
the doctors currently practicing medicine in Puerto Rico and the
doctors that have moved from Puerto Rico now practicing in the United
States.
Response: As noted in the proposed rule, we will be adjusting the
GPCIs for CY 2014. Given that we did not make any proposals to modify
the malpractice GPCI calculation methodology or values for CY 2013, it
would not be appropriate to make changes to the GPCIs in this final
rule. We appreciate the physician survey information on the cost of
malpractice insurance. We will review the information submitted on the
cost of obtaining malpractice insurance in Puerto Rico as we prepare
for the seventh GPCI update. We would note that the GPCIs are based
upon changes in the relative costs of obtaining malpractice insurance
so any changes in the GPCI for Puerto Rico will be based not only on
data reflecting the costs on Puerto Rico, but also those in other
localities.
c. Expiration of GPCI Work Floor
The work GPCIs are designed to capture the relative costs of
physician labor by Medicare PFS locality. Previously, the work GPCIs
were developed using the median hourly earnings from the 2000 Census of
workers in seven professional specialty occupation categories that 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. That is, including physicians'
wages in the work GPCIs would effectively make the indices dependent
upon Medicare payments. As required by law, the work GPCIs reflect one
quarter of the relative wage differences for each locality compared to
the national average. The 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 BLS
OES data as a replacement for the 2000 Census data.
Although we did not propose any changes to the data or methodology
used to calculate the work GPCI for CY

[[Page 68948]]

2013, we note that addenda D and E will reflect the expiration of the
statutory 1.0 work GPCI floor which as noted above, is set to expire on
December 31, 2012 in accordance with section 1848 (e)(1)(E) of the Act.
Comment: A few commenters requested an extension of the 1.0 work
GPCI floor stating that the statutorily-mandated work GPCI floor will
expire on December 31, 2012.
Response: As discussed above (and noted by the commenters) the 1.0
work GPCI floor is set to expire on December 31, 2012 and we do not
have authority to extend the 1.0 work GPCI floor beyond December 31,
2012.
4. Institute of Medicine Phase I Report
a. Background
At our request, the Institute of Medicine conducted 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 payments reflect differences in input costs across geographic
areas. The factors the Institute of Medicine evaluated include the
following:
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. healthcare marketplace, the
Institute of Medicine also evaluated and considered 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 Institute of Medicine's first report entitled ``Geographic
Adjustment in Medicare Payment, Phase I: Improving Accuracy'' evaluated
the accuracy of geographic adjustment factors and the methodology and
data used to calculate them. The recommendations included in the
Institute of Medicine's Phase I report that relate to or would have an
effect on the methodologies used to calculate the GPCIs and the
configuration of Medicare PFS payment locality structure are summarized
as follows:
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 2-2: The data used to construct the
hospital wage index and the physician geographic adjustment factor
should come from all health care employers.
Recommendation 5-1: The GPCI cost share weights for
adjusting fee-for-service payments to practitioners should continue to
be national, including the three GPCIs (work, PE, and liability
insurance) and the categories within the PE (office rent and
personnel).
Recommendation 5-2: Proxies should continue to be used to
measure geographic variation in the physician work adjustment, but CMS
should determine whether the seven proxies currently in use should be
modified.
Recommendation 5-3: CMS should consider an alternative
method for setting the percentage of the work adjustment based on a
systematic empirical process.
Recommendation 5-4: The PE GPCI should be constructed 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 5-5: CMS and the Bureau of Labor Statistics
should develop an agreement allowing the Bureau of Labor Statistics to
analyze confidential data for CMS.
Recommendation 5-6: A new source of information should be
developed to determine the variation in the price of commercial office
rent per square foot.
Recommendation 5-7: Nonclinical labor-related expenses
currently included under PE office expenses should be geographically
adjusted as part of the wage component of the PE. This report can be
accessed on the Institute of Medicine 's Web site at www.iom.edu/Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx.
As previously noted in this section, the Institute of Medicine also
considered the role of Medicare payments on matters such as the
distribution of the healthcare workforce, population health, and the
ability of providers to produce high-value, high-quality health care in
its final report July 17, 2012. We were not able to evaluate the
recommendations contained in the Institute of Medicine's Phase II
report, in time for discussion in the proposed rule. The Phase II
report can be accessed on the Institute of Medicine's Web site at
www.iom.edu/Reports/2012/Geographic-Adjustment-in-Medicare-Payment-Phase-II.aspx.
b. Institute of Medicine Recommendations Implemented in CY 2012
In the CY 2012 PFS final rule with comment period, we addressed
three of the recommendations offered by the Institute of Medicine in
its Phase I report. Specifically, the final CY 2012 GPCIs utilized the
full range of nonphysician occupations in the employee wage calculation
consistent with Institute of Medicine recommendation 5-4. Additionally,
we created a new purchased service index to account for nonclinical
labor related expenses similar to Institute of Medicine recommendation
5-7. Lastly, we have consistently used national cost share weights to
determine the appropriate weight attributed to each GPCI component,
which is supported by Institute of Medicine recommendation 5-1 (76 FR
73081 through 73092). In order to facilitate a public discussion
regarding the Institute of Medicine's remaining Phase I
recommendations, we provided a summary analysis of these
recommendations in the CY 2013 proposed rule, which has also been
included in this final rule with comment period below. We provided our
technical analyses of the remaining Institute of Medicine Phase I
recommendations in a report released on the PFS Web site at
www.cms.gov/PhysicianFeeSched. Since we have not yet had an opportunity
to review the recommendations in the Institute of Medicine's Phase II
report, these analyses focus exclusively on the recommendations as
presented in the Institute of Medicine's Phase I report.
c. Discussion of Remaining Institute of Medicine's Phase I
Recommendations
(1) Institute of Medicine Recommendation Summaries
(A) Institute of Medicine 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

[[Page 68949]]

statewide non-metropolitan statistical areas should serve as the basis
for defining these labor markets. (Geographic Adjustment in Medicare
Payment, Phase I: Improving Accuracy pages 2-1 thru 2-29)
(i) Locality Background
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 16 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, and 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).
Prior to 1992, Medicare payments for physicians' services were made
under the reasonable charge system. Payments were based on the charging
patterns of physicians. This resulted in large differences among types
of services, geographic payment areas, and physician specialties.
Recognizing this, the Congress replaced the reasonable charge system
with the Medicare PFS in the Omnibus Budget Reconciliation Act (OBRA)
of 1989, effective January 1, 1992. Payments under the fee schedule are
based on the relative resources used in furnishing services and vary
among areas as resource costs vary geographically as measured by the
GPCIs.
Payment localities were established under the reasonable charge
system by local Medicare carriers based on their knowledge of local
physician charging patterns and economic conditions. These localities
changed little between the inception of Medicare in 1967 and the
beginning of the PFS in 1992. As a result, a study was begun in 1994
that resulted in a comprehensive locality revision, which was
implemented in 1997 (61 FR 59494).
The revised locality structure reduced the number of localities
from 210 to the current 89 and the number of statewide localities
increased from 22 to 34. The revised localities were based on locality
resource cost differences as reflected by the GPCIs. A full discussion
of the methodology can be found in the CY 1997 PFS final rule with
comment period (61 FR 59494). The current 89 fee schedule areas are
defined alternatively by state boundaries (for example, Wisconsin),
metropolitan areas (for example, Metropolitan St. Louis, MO), portions
of a metropolitan area (for example, Manhattan), or rest-of-state areas
that exclude metropolitan areas (for example, Rest of Missouri). This
locality configuration is used to calculate the GPCIs that are in turn
used to calculate payments for physicians' services under the PFS.
As was stated in the CY 2011 final rule with comment period (75 FR
73261), we require that changes to the PFS locality structure be done
in a budget neutral manner within a state. For many years, we have
sought consensus for any locality changes among the professionals whose
payments would be affected. We have also considered more comprehensive
changes to locality configurations. In 2008, we issued a draft
comprehensive report detailing four different locality configuration
options (www.cms.gov/physicianfeesched/downloads/ReviewOfAltGPCIs.pdf).
The alternative locality configurations in the report are described
below.
Option 1: CMS Core-Based Statistical Area (CBSA) Payment
Locality Configuration: CBSAs are a combination of Office of Management
and Budget (OMB's) Metropolitan Statistical Areas (MSAs) and their
Micropolitan Statistical Areas. Under this option, MSAs would be
considered as urban CBSAs. Micropolitan Statistical Areas (as defined
by OMB) and rural areas would be considered as non-urban (rest of
state) CBSAs. This approach would be consistent with the areas used in
the Inpatient Prospective Payment System (IPPS) pre-reclassification
wage index, which is the hospital wage index for a geographic area
(CBSA or non-CBSA) calculated from submitted hospital cost report data
before statutory adjustments reconfigure, or ``reclassify'' a hospital
to an area other than its geographic location, to adjust payments for
difference in local resource costs in other Medicare payment systems.
Based on data used in the 2008 locality report, this option would
increase the number of PFS localities from 89 to 439.
Option 2: Separate High-Cost Counties from Existing
Localities (Separate Counties): Under this approach, higher cost
counties are removed from their existing locality structure, and they
would each be placed into their own locality. This option would
increase the number of PFS localities from 89 to 214, using a 5 percent
GAF differential to separate high-cost counties.
Option 3: Separate MSAs from Statewide Localities
(Separate MSAs): This option begins with statewide localities and
creates separate localities for higher cost MSAs (rather than removing
higher cost counties from their existing locality as described in
Option 2). This option would increase the number of PFS localities from
89 to 130, using a 5 percent GAF differential to separate high-cost
MSAs.
Option 4: Group Counties Within a State Into Locality
Tiers Based on Costs (Statewide Tiers): This option creates tiers of
counties (within each state) that may or may not be contiguous but
share similar practice costs. This option would increase the number of
PFS localities from 89 to 140, using a 5 percent GAF differential to
group similar counties into statewide tiers.
For a detailed discussion of the public comments on the
contractor's 2008 draft report detailing four different locality
configurations, we refer readers to the CY 2010 PFS proposed rule (74
FR 33534) and subsequent final rule with comment period (74 FR 61757).
There was no public consensus on the options, although a number of
commenters expressed support for Option 3 (separate MSAs from statewide
localities) because the commenters believed this alternative would
improve payment accuracy and could mitigate potential reductions to
rural areas compared to Option 1 (CMS CBSAs).
In response to some public comments regarding the third of the four
locality options, we had our contractor conduct an analysis of the
impacts that would result from the application of Option 3. Those
results were displayed in the final locality report released in 2011.
The final report, entitled ``Review of Alternative GPCI Payment
Locality Structures--Final Report,'' may be accessed directly from the
CMS Web site at www.cms.gov/PhysicianFeeSched/downloads/Alt_GPCI_Payment_Locality_Structures_Review.pdf.
(ii) Institute of Medicine Recommendations on PFS Locality Structure
Discussion
The Institute of Medicine recommends altering the current locality
structure that was originally based on areas set by local contractors
and, in 1996, reduced from 210 to current 89 using a systematic
iterative methodology. Rather than using the current uniform fee
schedule areas in adjusting for relative cost differences as compared
to the national average, the Institute of Medicine recommends a three-
tiered system for defining fee schedule areas. In the first tier, the

[[Page 68950]]

Institute of Medicine proposes applying county-based fee schedule areas
to calculate the employee wage component of the PE GPCI. Although the
Institute of Medicine's report states that it recommends that
``Metropolitan statistical areas and statewide non-metropolitan
statistical areas should serve as the basis for defining these labor
markets,'' the Institute of Medicine also recommends applying an out-
commuting adjustment, which would permit employee wage index values to
vary by county. Since the employee wage index is one component of the
PE GPCI, these values also would vary by county under the Institute of
Medicine's proposal.
To understand why the employee wage index would vary by county
under the Institute of Medicine's recommendation, consider the three
steps that would be required to calculate the employee wage index. The
first step calculates the average hourly wage (AHW) for workers
employed in each MSA or residual (rest of state) area. The wages of
workers in each occupation are weighted by the number of workers
employed in physicians' offices nationally. The second step applies a
commuting-based smoothing adjustment to create area index wages for
each county. The commuting-adjusted county index wages are equal to a
weighted average of the AHW values calculated in the first step, where
the weights are county-to-MSA out-commuting patterns. The Institute of
Medicine's out-commuting-based weights equal the share of health care
workers that live in a county where a physician's office is located who
commute out of the county to work in a physician's office in each MSA.
The third step sets each physician's employee index wage equal to the
estimated area index wage (calculated in Step 2) of the county in which
the physician's office is located. Because the out-commuting adjustment
envisioned by the Institute of Medicine in the second step varies by
county, the employee wage index value--and thus the PE GPCI as a
whole--would also potentially vary by county depending on the smoothing
option chosen. If implemented, the number of employee wage index
payment areas could potentially increase from 89 to over 3,000.
The Institute of Medicine's second tier of fee schedule areas would
use an MSA-based approach. The Institute of Medicine proposes using the
MSA-based system for the work GPCI, the office rent index and the
purchased services index of the PE GPCI, and the MP GPCI. An MSA is
made up of one or more counties, including the counties that contain
the core urban area with a population of 50,000 or more, as well as
surrounding counties that exhibit a high degree of social and economic
integration (as measured by commuting patterns) with the urban core.
MSAs are designed to be socially and economically integrated units
based on the share of workers who commute to work within the urban core
of each MSA. Implementing an MSA-based locality structure would expand
the number of fee schedule areas from 89 to upwards of 400 plus
additional MSAs for U.S. territories (for example, Virgin Islands,
American Samoa, Guam, Northern Marianna Islands).
In its third payment area tier, the Institute of Medicine proposes
creating a national payment area for the ``equipment, supplies and
other'' index. We currently do not adjust PEs associated with supplies
and equipment since we believe they are typically purchased in a
national market. Thus, this approach is equivalent to using a national
fee schedule area to define this index. The Institute of Medicine
proposes no change to the fee schedule area used to compute the
``equipment, supplies and other'' index.
Based on our contractor's analysis, there would be significant
redistributive impacts if we were to implement a policy that would
reconfigure the PFS localities based on the Institute of Medicine's
three-tiered recommendation. Many rural areas would see substantial
decreases in their corresponding GAF and GPCI values as higher cost
counties are removed from current ``rest of state'' payment areas.
Conversely, many urban areas, especially those areas that are currently
designated as ``rest of state'' but reside within higher cost MSAs,
would experience increases in their applicable GPCIs and GAFs.
The localities used to calculate the GPCIs have been a subject of
substantial discussion and debate since the implementation of the PFS.
The intensity of those discussions has increased since the last
comprehensive update to the locality structure in 1997. Physicians and
other suppliers in areas such as Santa Cruz County, California and
Prince William County, Virginia have expressed concern that the current
locality structure does not appropriately capture economic and
demographic shifts that have taken place since the last PFS locality
update. On the other hand, rural practitioners have argued that
revisions to the current PFS payment localities will reduce their
payments and exacerbate the problems of attracting physicians and other
practitioners to rural areas. In the past, we have also heard concerns
from representatives of some statewide localities regarding the
potential implications of adopting an alternative locality structure
that would change their current statewide payment area (74 FR 33536).
The Institute of Medicine stated in its Phase I report regarding
its locality recommendation that, ``While the payment areas would stay
the same for the HWI (hospital wage index), implementing this
recommendation would mean that the GPCI payment areas would expand from
89 to 441 areas, which would be a significant change. The impact of the
change in payment areas will be assessed in the Phase II report.''
(``Geographic Adjustment in Medicare Payment: Phase I: Improving
Accuracy, Second Edition'' on September 28, 2011 page 5-6.) Moreover,
the Institute of Medicine's Phase II report will evaluate the effects
of geographic adjustment factors on the distribution of the healthcare
workforce, quality of care, population health, and the ability to
provide efficient, high value care. Over the years, commenters that
have opposed revisions to localities have claimed that changes to the
PFS areas could have a significant impact on the ability of rural areas
to attract physicians. Certainly, one of our major goals when we last
comprehensively revised the Medicare PFS localities in 1996 was to
avoid excessively large urban/rural payment differences (61 FR 59494).
In 1996, we were hopeful that the revisions would improve access to
care for rural areas (61 FR 59494). Some areas may have experienced
both economic and demographic shifts since the last comprehensive
locality update. Before moving forward with the Institute of Medicine's
three-tiered locality recommendation, or any other potential locality
revision, we would need to assess, and prepare to inform the public of,
the impact of any change for all Medicare stakeholders. The Institute
of Medicine's Phase II report, released July 17, 2012, contains an
evaluation of many of these important factors including:
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 for hospitals and other facilities to maintain an
adequate and skilled workforce;
++ Patient access to providers and needed medical technologies;

[[Page 68951]]

++ Effect of adjustment factors on population health and quality of
care; and
++ Effect of adjustment factors on the ability of providers to
furnish efficient, high value care.
To fully assess the broader public policy implications associated
with the Institute of Medicine's locality recommendation, we must first
fully assess and analyze the recommendations contained in the Institute
of Medicine's Phase II report. Accordingly, we believe that it would be
premature to make any statements about potential changes we would
consider making to the PFS localities at this time. Any changes to PFS
fee schedule areas would be made through future notice and comment
rulemaking.
In the event that we develop a specific proposal for changing the
locality configuration during future rulemaking, we would provide
detailed analysis on the impact of the changes for physicians in each
county. We would also provide opportunities for public input (for
example, Town Hall meetings or Open Door Forums), as well as
opportunities for public comments afforded by the rulemaking process.
While we did not propose to change the current locality
configuration for CY 2013, we requested public comments regarding the
Institute of Medicine's recommended three-tiered PFS payment locality
definition. In addition, as stated above we, made our technical
analyses of the Institute of Medicine locality recommendations,
specific to the Phase I report, available on the CMS Web site at
www.cms.gov/PhysicianFeeSched/.
The following is a summary of the comments we received regarding
the Institute of Medicine's recommended three-tiered PFS payment
locality definition.
Comment: We received several comments on the Institute of
Medicine's recommendation for a three-tiered PFS payment locality
definition. Commenters from rural areas opposed increasing the number
of payment localities, as would happen under an MSA-based PFS locality
structure, because it would redistribute payments from rural to urban
areas. Additionally, commenters who opposed the Institute of Medicine's
three-tiered locality approach argued that increasing the number of PFS
payment localities would reduce their payment amounts and exacerbate
problems of attracting physicians and other practitioners to rural
areas.
A few commenters supported the Institute of Medicine's
recommendation to move toward an MSA-based locality configuration and
urged us to make updating the PFS locality configuration a priority in
CY 2013. Commenters supporting an MSA-based locality configuration
contend that significant economic and demographic shifts have occurred
since the last reconfiguration, making the current locality assignments
outdated. One state medical association expressed disappointment that
we did not propose an MSA-based locality structure for CY 2013. The
commenter urged us ``to adopt a transition plan to update the PFS
localities'' and stressed that the ``transition plan must take into
account the negative impact on physicians practicing in rural areas and
work to mitigate the reductions in these regions.''
Response: We appreciate the comments received on the Institute of
Medicine's recommendation to adopt an MSA-based approach for defining
PFS localities. We will continue to evaluate the comments received on
the Institute of Medicine's recommendations for revising the PFS
locality structure, along with the impacts of such recommendations as
discussed in the Phase II report.
(B) Institute of Medicine Recommendation 2-2: Employee Wage Index
of the PE GPCI. The data used to construct the hospital wage index and
the physician geographic adjustment factor should come from all
healthcare employers (Geographic Adjustment in Medicare Payment, Phase
I: Improving Accuracy pages 2-1 thru 2-29) and Recommendation 5-5: CMS
and the Bureau of Labor Statistics should develop an agreement allowing
the Bureau of Labor Statistics to analyze confidential data for the
Centers for Medicare and Medicaid Services. (Geographic Adjustment in
Medicare Payment, Phase I: Improving Accuracy page 5-38.)
The Institute of Medicine recommends altering the data used to
calculate the employee wage index. Specifically, Institute of Medicine
recommends using wage data for workers in the healthcare industry
rather than wage data for workers across all-industries. Although all-
industry wage data has the largest sample size, the Institute of
Medicine ``* * * is concerned that the [all-industry] sample does not
represent physician offices.'' BLS OES occupation wage data by MSA,
however, are not publicly available for the healthcare industry. Using
healthcare-industry wages would require the use of confidential BLS OES
data. While CMS could potentially secure access to the confidential BLS
OES data, the general public may not be able to. Although the Institute
of Medicine recommends that CMS secure an agreement with BLS to use the
confidential wage data, the current employee wage index relies on
publicly-available all-industry wage data.
In the CY 2013 proposed rule we requested comments on the use of
confidential employee wage index data rather than the publicly
available all-industry wage data. However, we did not receive specific
comments as to whether we should pursue the acquisition of confidential
employee wage index data (as a replacement for the publically available
all-industry wage data) for purposes of determining the employee wage
index component of the PE GPCI.
Regardless of whether healthcare-industry or all-industry wage data
is used, the Institute of Medicine recommends following the current
approach adopted by CMS in CY 2012 for calculating the employee wage
index. This approach constructs the employee wage index as a weighted
average of occupation wages for the full-range of occupations employed
in physicians' offices, where the weights are equal to the fixed
national weight based on the hours of each occupation employed in
physicians' offices nationwide. We adopted this approach for
calculating the GPCI employee wage index in the CY 2012 PFS final rule
with comment period (76 FR 73088).
(C) Institute of Medicine Recommendation 5-2: Work GPCI Methodology
Proxies should continue to be used to measure geographic variation
in the physician work adjustment, but CMS should determine whether the
seven proxies currently in use should be modified (Geographic
Adjustment in Medicare Payment, Phase I: Improving Accuracy page 5-36)
and; Recommendation 5-3: CMS should consider an alternative method for
setting the percentage of the work adjustment based on a systematic
empirical process. (Geographic Adjustment in Medicare Payment, Phase I:
Improving Accuracy pages 5-36 thru 5-37)
The Institute of Medicine recommends replacing the current work
GPCI methodology with a regression-based approach. We currently use
three steps to calculate the work GPCI. These steps include:
(1) Selecting the proxy occupations and calculating an occupation-
specific index for each proxy;
(2) Assigning weights to each proxy-occupation index based on each
occupation's share of total national wages to create an aggregate
proxy-occupation index; and

[[Page 68952]]

(3) Adjusting the aggregate proxy-occupation index by a physician
inclusion factor to calculate the final work GPCI.
By using this approach, the current methodology reduces the
circularity problem that occurs when work GPCI values are based on
direct measurements of physician earnings. Because physician earnings
are made up of both wages and a return on investment from ownership of
the physician practice, calculating the work GPCI using physician
earnings information would assign areas where physician practices are
more profitable higher work GPCI values. Although the Institute of
Medicine recommends that we continue to use proxy occupations in the
work GPCI methodology, its regression-based approach alters each of the
three steps described above.
To modify the first step, the Institute of Medicine recommends that
we empirically evaluate the validity of seven proxy occupations we
currently use. The current proxy occupations in the work GPCI are
intended to represent highly educated, professional employee
categories. Although the Institute of Medicine recommends re-evaluating
the proxy occupations used in the work GPCI, it does not define
specific criteria to use for this purpose.
To modify the second step, the Institute of Medicine recommends
using a regression-based approach to weight the selected proxy
occupation indices based on their correlation with physician earnings.
This Institute of Medicine proposal would replace the current approach
where occupations are weighted by the size of their share of total
national wages. Such an approach presumes that wages for proxy
occupations are not related to physician profits.
Finally, the Institute of Medicine proposes an empirically-based
approach to determine the inclusion factor for work. The inclusion
factor for work refers to section 1848(e)(1)(A)(iii) of the Act
requiring that the work GPCI reflect only 25 percent of the difference
between the relative value of physicians' work effort in each locality
and the national average of such work effort. Therefore, under current
law, only one quarter of the measured regional variation in physician
wages is incorporated into the work GPCI. The Institute of Medicine
recommends calculating an inclusion factor based on the predicted
values of the regression described above. Under the Institute of
Medicine's approach, the inclusion factor is larger when the proxy
occupations have a higher correlation with physicians' earnings and
smaller when the proxy occupations have a lower correlation with
physicians' earnings. We note that using such an empirical approach to
weight the proxy occupation indices and to estimate the inclusion
factor requires the identification of a viable source of physician wage
information in addition to the wage information of proxy occupations to
accurately measure regional variation in physician wages.
We requested comments on the Institute of Medicine's
recommendations to revise the work GPCI methodology.
The following is a summary of the comments we received regarding
the Institute of Medicine's recommendations to revise the work GPCI
methodology.
Comment: A few commenters stated that the physician work GPCI
should not be adjusted at all for geographic cost differences. However,
the same commenters stated that if geographic payments adjustments must
be applied under the PFS, the current proxy occupations used for
calculating the work GPCI should be replaced with actual physician
salary survey data to determine the true cost (market price) of
physician labor. To that end, the commenters suggested that third
parties who hire physicians, for example hospitals, would be a good
source for obtaining ``market based'' physician salary data.
Additionally, one commenter encouraged us to work with the AMA and the
Medical Group Management Association (MGMA) to evaluate the validity of
the current proxy occupational data sources and to determine methods
for gathering reliable physician cost data.
Response: We appreciate the comments received on the Institute of
Medicine's recommendations to revise the work GPCI methodology. We will
continue to evaluate the comments received on the methodology used for
determining the physician work GPCI in preparation for the seventh
update to the GPCIs, which is scheduled to be implemented in CY 2014.
We also look forward to the MedPAC study on this issue, which is
required under section 3004 of the MCTRJCA. This study will assess
whether any geographic adjustment to physician work is appropriate and,
if so, what the level should be and where it should be applied.
(D) Institute of Medicine Recommendation 5-6: Office Rent Component
of PE GPCI. A new source of information should be developed to
determine the variation in the price of commercial office rent per
square foot. (Geographic Adjustment in Medicare Payment, Phase I:
Improving Accuracy pages 5-38 thru 5-39)
The Institute of Medicine recommends the development of a new
source of data to determine the variation in the price of commercial
office rent per square foot. However, the Institute of Medicine does
not explicitly recommend where the data should come from or how it
should be collected. Before coming to this recommendation, the
Institute of Medicine identified and evaluated several public and
commercially available sources of data to determine whether an accurate
alternative is available to replace the residential rent data currently
used as a proxy to measure regional variation in physicians' cost to
rent office space in the PE GPCI; these sources include rental data
from the U.S. Department of Housing and Urban Development, American
Housing Survey, General Services Administration, Basic Allowance for
Housing (U.S. Department of Defense), U.S. Postal Service, MGMA (MGMA),
and REIS, Inc. The Institute of Medicine concluded that these sources
had substantial limitations, including lack of representativeness of
the market in which physicians rent space, small sample size, low
response rates, and sample biases. Although we agree that a suitable
source for commercial office rent data would be preferable to the use
of residential rent data in our PE office rent methodology, we have
still been unable to identify an adequate commercial rent source that
sufficiently covers rural and urban areas.
We will continue to evaluate possible commercial rent data sources
for potential use in the office rent calculation. To that end, we
encouraged public commenters to notify us of any publicly available
commercial rent data sources, with adequate data representation of
urban and rural areas that could potentially be used in the calculation
of the office rent component of PE. However, we did not receive
comments on specific data sources for commercial rent for purposes of
determining the office rent component of the PE GPCI.
Comment: We received several comments that were not within the
scope of the CY 2013 proposed rule. For example, a few commenters
expressed concerns about the methodology used for determining the CY
2012 GPCI values and the impact of the current PFS locality
configuration on specific PFS localities.
Response: We appreciate the comments regarding the methodology used
for determining the CY 2012 GPCI values and the impact they have on

[[Page 68953]]

specific PFS localities. As discussed above, we did not make any
proposed changes to the GPCI calculation methodology or values for CY
2013. Therefore, it would not be appropriate to consider making new
adjustments to the GPCI values for a specific locality without
providing the public an opportunity to comment. We will consider the
commenters' suggestions as we implement the seventh GPCI update
anticipated in CY 2014.
Result of Evaluation of Comments
We appreciate the comments received on the Institute of Medicine's
recommendations regarding the PFS locality structure and the data
sources and methodology used to calculate GPCI values. We will consider
the commenters' suggestions as we continue to evaluate options for
reconfiguring the PFS locality structure and as we implement the
seventh update to the GPCIs scheduled for CY 2014. We also look forward
to conducting a full review and assessment of the Institute of
Medicine's additional PFS locality recommendations (as discussed in
their Phase II report), as well as the MedPAC study on the physician
work GPCI under the PFS that is required by section 3004 of the
MCTRJCA.

E. Medicare Telehealth Services for the Physician Fee Schedule

1. Billing and Payment for Telehealth Services
a. 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 furnished. 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 furnished to an eligible
telehealth individual notwithstanding the fact that the individual
practitioner furnishing 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. Under the BIPA, originating sites
were 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) of the Act). 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 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.
b. Current Telehealth Billing and Payment Policies
As noted previously, 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;

[[Page 68954]]

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
(DSMT); and
Smoking cessation services.
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 via a telecommunications system:
Physician;
Physician assistant (PA);
Nurse practitioner (NP);
Clinical nurse specialist (CNS);
Nurse-midwife;
Clinical psychologist;
Clinical social worker;
Registered dietitian or nutrition professional.
Practitioners furnishing Medicare telehealth services 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 certifies 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).
2. Requests for Adding Services to the List of Medicare Telehealth
Services
As noted previously, 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
telehealth services to one of two categories. In the November 28, 2011
Federal Register (76 FR 73102), we finalized revisions to criteria that
we use to review requests in the second category. The two categories
are:
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 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. In reviewing these
requests, we look for evidence indicating that the use of a
telecommunications system in delivering the candidate telehealth
service produces clinical benefit to the patient. Submitted evidence
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. Our evidentiary
standard of clinical benefit does not include minor or incidental
benefits.
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

[[Page 68955]]

(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.
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 (with a minimum of 1 hour of in-person instruction to ensure
effective injection training), and smoking cessation services.
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 2012 will be
considered for the CY 2014 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 www.cms.gov/telehealth/.
3. Submitted Request and Other Additions to the List of Telehealth
Services for CY 2013
We received a request in CY 2011 to add alcohol and/or substance
abuse and brief intervention services as Medicare telehealth services
effective for CY 2013. The following presents a discussion of this
request, and our proposals for additions to the CY 2013 telehealth
list.
a. Alcohol and/or Substance Abuse and Brief Intervention Services
The American Telemedicine Association submitted a request to add
alcohol and/or substance abuse and brief intervention services,
reported by CPT codes 99408 (Alcohol and/or substance (other than
tobacco) abuse structured screening (for example, AUDIT, DAST), and
brief intervention (SBI) services; 15 to 30 minutes) and 99409 (Alcohol
and/or substance (other than tobacco) abuse structured screening (for
example, AUDIT, DAST), and brief intervention (SBI) services; greater
than 30 minutes) to the list of approved telehealth services for CY
2013 on a category 1 basis.
We note that we assigned a status indicator of ``N'' (Noncovered)
to CPT codes 99408 and 99409 as explained in the CY 2008 PFS final rule
with comment period (72 FR 66371). At the time, we stated that because
Medicare only provides payment for certain screening services with an
explicit benefit category, and these CPT codes incorporate screening
services along with intervention services, we believed that these codes
were ineligible for payment under the PFS. We continue to believe that
these codes are ineligible for payment under PFS and, additionally,
under the telehealth benefit. We do not believe it would be appropriate
to make payment for claims using these CPT codes for the services
furnished via telehealth, but not when furnished in person. Because CPT
codes 99408 and 99409 are currently assigned a noncovered status
indicator, and because we continue to believe this assignment is
appropriate, we did not propose adding these CPT codes to the list of
Medicare Telehealth Services for CY 2013.
However, we created two parallel G-codes for 2008 that allow for
appropriate Medicare reporting and payment for alcohol and substance
abuse assessment and intervention services that are not furnished as
screening services, but that are furnished in the context of the
diagnosis or treatment of illness or injury. The codes are HCPCS code
G0396 (Alcohol and/or substance (other than tobacco) abuse structured
assessment (for example, AUDIT, DAST) and brief intervention, 15 to 30
minutes) and HCPCS code G0397, (Alcohol and/or substance (other than
tobacco) abuse structured assessment (for example, AUDIT, DAST) and
intervention greater than 30 minutes). Since these codes are used to
report comparable alcohol and substance abuse services under certain
conditions, we believed that it would be appropriate to consider the
ATA's request as it applies to these services when appropriately
reported by the G-codes. The ATA asked that CMS consider this request
as a category 1 addition based on the similarities between these
services and 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). We agree that the interaction
between a practitioner and a beneficiary receiving alcohol and
substance abuse assessment and intervention services is similar to
their interaction in smoking cessation services. We also believe that
the interaction between a practitioner and a beneficiary receiving
alcohol and substance abuse assessment and intervention services is
similar to the assessment and intervention elements of CPT code 96152
(health and behavior intervention, each 15 minutes, face-to-face;
individual), which also is currently on the telehealth list.
Therefore, we proposed to add HCPCS codes G0396 and G0397 to the
list of telehealth services for CY 2013 on a category 1 basis.
Consistent with this proposal, we also proposed to revise our
regulations at Sec. 410.78(b) and Sec. 414.65(a)(1) to include
alcohol and substance abuse assessment and intervention services as
Medicare telehealth services.
b. Preventive Services
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.
As we stated in the CY 2012 proposed rule (76 FR 42826), we believe
that the category 1 criteria not only streamline our review process for
publically requested services that fall into this category, the
criteria also expedite our ability to identify codes for the telehealth
list that resemble those services already on this list.
During CY 2012, CMS added coverage for several preventive services
through the national coverage determination (NCD) process as authorized
by section 1861(ddd) of the Act. These services add to Medicare's
existing portfolio of preventive services that are now

[[Page 68956]]

available without cost sharing under the Affordable Care Act. We
believe that for several of these services, the interactions between
the furnishing practitioner and the beneficiary are similar to services
currently on the list of Medicare telehealth services. Specifically, we
believe that the assessment, education, and counseling elements of the
following services are similar to existing telehealth services:
Screening and behavioral counseling interventions in
primary care to reduce alcohol misuse, reported by HCPCS codes G0442
(Annual alcohol misuse screening, 15 minutes) and G0443 (Brief face-to-
face behavioral counseling for alcohol misuse, 15 minutes).
Screening for depression in adults, reported by HCPCS code
G0444 (Annual Depression Screening, 15 minutes).
Screening for sexually transmitted infections (STIs) and
high-intensity behavioral counseling (HIBC) to prevent STIs, reported
by HCPCS code G0445 (High-intensity behavioral counseling to prevent
sexually transmitted infections, face-to-face, individual, includes:
education, skills training, and guidance on how to change sexual
behavior, performed semi-annually, 30 minutes).
Intensive behavioral therapy for cardiovascular disease,
reported by HCPCS code G0446 (Annual, face-to-face intensive behavioral
therapy for cardiovascular disease, individual, 15 minutes).
Intensive behavioral therapy for obesity, reported by
HCPCS code G0447 (Face-to-face behavioral counseling for obesity, 15
minutes).
We believe that the interactions between practitioners and
beneficiaries receiving these services are similar to individual KDE
services reported by HCPCS code G0420 (Face-to-face educational
services related to the care of chronic kidney disease; individual, per
session, per one hour), individual MNT 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), and HBAI reported by CPT code 96150 (Health and
behavior assessment (for example, health-focused clinical interview,
behavioral observations, psychophysiological monitoring, health-
oriented questionnaires), each 15 minutes face-to-face with the
patient; initial assessment); CPT code 96151 (Health and behavior
assessment (for example, health-focused clinical interview, behavioral
observations, psychophysiological monitoring, health-oriented
questionnaires), each 15 minutes face-to-face with the patient re-
assessment); CPT code 96152 (Health and behavior intervention, each 15
minutes, face-to-face; Individual); CPT code 96153 (Health and behavior
intervention, each 15 minutes, face-to-face; Group (2 or more
patients)); CPT code 96154 (Health and behavior intervention, each 15
minutes, face-to-face; family (with the patient present)), all services
that are currently on the telehealth list.
Therefore, we proposed to add HCPCS codes G0442, G0443, G0444,
G0445, G0446, and G0447 to the list of telehealth services for CY 2013
on a category 1 basis. We note that all coverage guidelines specific to
the services would continue to apply when these services are furnished
via telehealth. For example, when the national coverage determination
requires that the service be furnished to beneficiaries in a primary
care setting, the qualifying originating telehealth site must also
qualify as a primary care setting. Similarly, when the national
coverage determination requires that the service be furnished by a
primary care practitioner, the qualifying primary distant site
practitioner must also qualify as primary care practitioner. For more
detailed information on coverage requirements for these services, we
refer readers to the Medicare National Coverage Determinations Manual,
Pub. 100-03, Chapter 1, Section 210, available at http://www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf. Consistent with this proposal,
we also proposed to revise our regulations at Sec. 410.78(b) and Sec.
414.65(a)(1) to include these preventive services as Medicare
telehealth services.
Comment: All commenters expressed support for CMS' proposals to add
alcohol and/or substance abuse structured assessment and brief
intervention services and the several preventive services established
through the national coverage determination (NCD) process to the list
of Medicare telehealth services for CY 2013. One commenter stated
particular support for CMS' approach to ensure that coverage guidelines
continue to apply when these services are furnished via telehealth and
expressed the intention to support CMS' efforts to help educate
practitioners about these preventive telehealth services newly
available in 2013. Another commenter stated that the proposal to add
these services to this list was an integral step forward for
telehealth, but that the current breadth and level of services covered
under the telehealth benefit is inadequate to support more robust
telehealth capabilities sought by some practitioners.
Response: We appreciate the broad support for the proposed
additions to the list of Medicare telehealth services and the efforts
of stakeholders to ensure that practitioners are educated about the
addition of these services to the list of Medicare telehealth services.
We believe that the delivery of services via telehealth can help reduce
barriers to health care access faced by some beneficiaries, and we
remind all interested stakeholders that we are currently soliciting
public requests to add services to the list of Medicare telehealth
services. To be considered during PFS rulemaking for CY 2014, these
requests must be submitted and received by December 31, 2012 or the
close of the comment period for this final rule with comment period.
Each request to add 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. 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 www.cms.gov/telehealth/.
After consideration of the public comments received, we are
finalizing our CY 2013 proposal to add HCPCS codes G0396, G0397, G0442,
G0443, G0444, G0445, G0446, and G0447 to the list of telehealth
services for CY 2013 on a category 1 basis. We note that all coverage
guidelines specific to the services will continue to apply when these
services are furnished via telehealth. For example, when the national
coverage determination requires that the service be furnished to
beneficiaries in a primary care setting, the telehealth originating
site must also qualify as a primary care setting under the terms of the
national coverage determination. Similarly, when the national coverage
determination requires that the service be furnished by a primary care
practitioner, the distant site practitioner who furnishes the
telehealth service must also qualify as primary care practitioner under
the terms of the national coverage

[[Page 68957]]

determination. For more detailed information on coverage requirements
for these services, we refer readers to the Medicare National Coverage
Determinations Manual, Pub. 100-03, Chapter 1, Section 210, available
at www.cms.gov/manuals/downloads/ncd103c1_Part4.pdf. Consistent with
this proposal, we are also revising our regulations at Sec. 410.78(b)
and Sec. 414.65(a)(1) to include alcohol and/or substance abuse
structured assessment and intervention services and the preventive
services as Medicare telehealth services.
4. Technical Correction To Include Emergency Department Telehealth
Consultations in Regulation
In the CY 2012 PFS final rule with comment period (76 FR 73103), we
finalized our proposal to change the code descriptors for initial
inpatient telehealth consultation G-codes to reflect telehealth
consultations furnished to emergency department patients in addition to
inpatient telehealth consultations effective January 1, 2012. However,
we did not amend the description of the services within the regulation
at Sec. 414.65(a)(1)(i). Therefore, we proposed to make a technical
revision to our regulation at Sec. 414.65(a)(1)(i) to reflect
telehealth consultations furnished to emergency department patients in
addition to hospital and SNF inpatients.
We received no comments regarding our proposal to make this
technical revision. Therefore, we are finalizing our proposal to make a
technical revision to our regulation at Sec. 414.65(a)(1)(i) to
reflect telehealth consultations furnished to emergency department
patients in addition to hospital and SNF inpatients.
5. Telehealth Originating Site Facility Fee Payment Amount Update
Section 1834(m)(2)(B) of the Act establishes the payment amount for
the Medicare telehealth originating site facility fee for telehealth
services provided from October 1, 2001, through December 31, 2002, at
$20. For telehealth services provided on or after January 1 of each
subsequent calendar year, the telehealth originating site facility fee
is increased by the percentage increase in the MEI as defined in
section 1842(i)(3) of the Act. The MEI increase for 2013 is 0.8
percent. Therefore, for CY 2013, the payment amount for HCPCS code
Q3014 (Telehealth originating site facility fee) is 80 percent of the
lesser of the actual charge or $24.43. The Medicare telehealth
originating site facility fee and MEI increase by the applicable time
period is shown in Table 18.

Table 18--The Medicare Telehealth Originating Site Facility Fee and MEI
Increase by the Applicable Time Period
------------------------------------------------------------------------
MEI
Facility fee increase Period
------------------------------------------------------------------------
$20.00........................ N/A 10/01/2001-12/31/2002
$20.60........................ 3.0% 01/01/2003-12/31/2003
$21.20........................ 2.9% 01/01/2004-12/31/2004
$21.86........................ 3.1% 01/01/2005-12/31/2005
$22.47........................ 2.8% 01/01/2006-12/31/2006
$22.94........................ 2.1% 01/01/2007-12/31/2007
$23.35........................ 1.8% 01/01/2008-12/31/2008
$23.72........................ 1.6% 01/01/2009-12/31/2009
$24.00........................ 1.2% 01/01/2010-12/31/2010
$24.10........................ 0.4% 01/01/2011-12/31/2011
$24.24........................ 0.6% 01/01/2012-12/31/2012
$24.43........................ 0.8% 01/01/2013-12/31/2013
------------------------------------------------------------------------

F. 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)
provided payment to independent laboratories furnishing the technical
component (TC) of physician pathology services to fee-for-service
Medicare beneficiaries who are inpatients or outpatients of a covered
hospital for a 2-year period beginning on January 1, 2000. This section
was subsequently 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), section 3104 of the Affordable Care
Act (Pub. L. 111-148), section 105 of the Medicare and Medicaid
Extenders Act of 2010 (MMEA) (Pub. L. 111-309), section 305 of the
Temporary Payroll Tax Cut Continuation Act of 2011 (Pub. L. 112-78) and
section 3006 of the Middle Class Tax Relief and Job Creation Act of
2012 (Pub. L. 112-96) to continue payment to independent laboratories
furnishing the technical component (TC) of physician pathology services
to fee-for-service Medicare beneficiaries who are inpatients or
outpatients of a covered hospital for various time periods. As
discussed in detail below, Congress most recently acted to continue
this payment through June 30, 2012. The 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 or global 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 and 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 the

[[Page 68958]]

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. Section 105 of the MMEA extended
the payment through CY 2011. Subsequent to the publication of the CY
2012 PFS final rule with comment period, section 305 of the Temporary
Payroll Tax Cut Continuation Act of 2011 extended the payment through
February 29, 2012 and section 3006 of the Middle Class Tax Relief and
Job Creation Act of 2012 extended the payment through June 30, 2012.
2. Revisions to Payment for TC of Certain Physician Pathology Services
In the CY 2012 PFS final rule with comment period, we finalized our
policy that an independent laboratory may not bill the Medicare
contractor for the TC of physician pathology services furnished after
December 31, 2011, to a hospital inpatient or outpatient (76 FR 73278
through 73279, 73473). As discussed above, subsequent to publication of
that final rule with comment period, Congress acted to continue payment
to independent laboratories through June 30, 2012. Therefore, the
policy that we finalized in the CY 2012 PFS final rule with comment
period was superseded by statute for 6 months. To be consistent with
the statutory changes and our current policy, we proposed conforming
changes to Sec. 415.130(d) such that we continued payment under the
PFS to independent laboratories furnishing the TC of physician
pathology services to fee-for-service Medicare beneficiaries who are
inpatients or outpatients of a covered hospital on or before June 30,
2012 (77 FR 44763). Independent laboratories may not bill the Medicare
contractor for the TC of physician pathology services furnished after
June 30, 2012, to a hospital inpatient or outpatient. We received no
public comments on the proposed conforming changes so we are finalizing
the revisions to Sec. 415.130(d) without modification.

G. Therapy Services

1. Outpatient Therapy Caps for CY 2013
Section 1833(g) of the Act applies annual, per beneficiary,
limitations (therapy caps) on expenses considered incurred for
outpatient therapy services under Medicare Part B. There is one therapy
cap for outpatient occupational therapy (OT) services and another
separate therapy cap for physical therapy (PT) and speech-language
pathology (SLP) services combined. Although therapy services furnished
in an outpatient hospital setting have been exempt from the application
of the therapy caps, section 3005(b) of the MCTRJCA amended section
1833(g) of the Act to include therapy services furnished in an
outpatient hospital setting in the therapy caps. This provision is in
effect from October 1, 2012 through December 31, 2012.
The therapy cap amounts are updated each year based on the Medicare
Economic Index (MEI). The annual change in the therapy cap amount for
CY 2013 is computed by multiplying the cap amount for CY 2012 by the
MEI for CY 2013 and rounding to the nearest $10. This amount is added
to the CY 2012 cap, which is $1,880, to obtain the CY 2013 cap amount.
The MEI for CY 2013 is 0.8 percent, resulting in a therapy cap amount
for CY 2013 of $1,900.
An exceptions process to the therapy caps has been in effect since
January 1, 2006. Since originally authorized by section 5107 of the
Deficit Reduction Act (DRA), which amended section 1833(g)(5) of the
Act, the exceptions process for the therapy caps has been extended
through subsequent legislation (MIEA-TRHCA, MMSEA, MIPPA, the
Affordable Care Act, MMEA, and TPTCCA). Last amended by section 3005 of
the MCTRJCA, the Agency's authority to provide for an exception process
to therapy caps expires on December 31, 2012. To request an exception
to the therapy caps, therapy suppliers and providers use the KX
modifier on claims for services after the beneficiary's services for
the year have exceeded the therapy cap. Use of the KX modifier
indicates that the services are reasonable and necessary and that there
is documentation of medical necessity in the beneficiary's medical
record.
Section 3005 of the MCTRJCA also required two additional changes to
Medicare policies for outpatient therapy services. Effective for
services furnished from October 1 through December 31, 2012, after a
beneficiary's incurred expenses for PT and SLP services combined exceed
the threshold of $3,700 during the calendar year, section 1833(g)(5)(C)
of the Act, as amended by 3005(a)(5) of the MCTRJCA, requires that we
apply a manual medical review process as part of the therapy caps
exceptions process. Similar to the therapy caps, there is a separate
$3,700 threshold for OT services. All requests for exceptions to the
therapy caps for services after the $3,700 threshold is reached are
subject to manual medical review. The manual medical review process is
being phased in over a 3-month period. Unlike the therapy caps,
exceptions are not automatically granted for therapy services above the
$3,700 threshold based upon the therapist's determination that they
services are reasonable and necessary. To request an exception to the
therapy caps for services after the threshold is reached, the provider
sends a request for an exception to the Medicare contractor. The
contractor then uses the coverage and payment requirements contained
within Pub. 100-02, Medicare Benefit Policy Manual, section 220 and
applicable medical review guidelines, and any relevant local coverage
determinations to make decisions as to whether an exception is approved
for the services. For more information on the manual medical review
process, go to www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medical-Review/TherapyCap.html.
2. Claims-Based Data Collection Strategy for Therapy Services
a. Introduction
Section 3005(g) of the MCTRJCA requires CMS to implement, beginning
on January 1, 2013, ``* * * a claims-based data collection strategy
that is designed to assist in reforming the Medicare payment system for
outpatient therapy services subject to the limitations of section
1833(g) of the Act. Such strategy shall be designed to provide for the
collection of data on patient function during the course of therapy
services in order to better understand patient condition and
outcomes.''
b. History/Background
In 2011, more than 8 million Medicare beneficiaries received
outpatient therapy services, including

[[Page 68959]]

physical therapy (PT), occupational therapy (OT), and speech-language-
pathology (SLP). Medicare payments for these services exceeded $5.8
billion. Between 1998-2008, Medicare expenditures for outpatient
therapy services increased at a rate of 10.1 percent per year while the
number of Medicare beneficiaries receiving therapy services only
increased by 2.9 percent per year. Although a significant number of
Medicare beneficiaries benefit from therapy services, the rapid growth
in Medicare expenditures for these services has long been of concern to
the Congress and the Agency. To address this concern, efforts have been
focused on developing Medicare payment incentives that encourage
delivery of reasonable and necessary care while discouraging
overutilization of therapy services and the provision of medically
unnecessary care. A brief review of these efforts is useful in
understanding our policy for CY 2013.
(1) Therapy Caps
Section 4541 of the Balanced Budget Act of 1997 (Pub. L. 105-33)
(BBA) amended section 1833(g) of the Act to impose financial
limitations on outpatient therapy services (the ``therapy caps''
discussed above) in an attempt to limit Medicare expenditures for
therapy services. Prior to the BBA amendment, these caps had applied to
services furnished by therapists in private practice, but the BBA
expanded the caps effective January 1, 1999, to include all outpatient
therapy services except those furnished in hospital outpatient
departments. Since that time, the Congress has amended the statute
several times to impose a moratorium on the application of the caps or
has required us to implement an exceptions process for the caps. The
therapy caps have only been in effect without a moratorium or an
exceptions process for less than 2 years. (See the discussion about the
therapy cap exceptions process above.) Almost from the inception of the
therapy caps, Congress and the Agency have been exploring potential
alternatives to the therapy caps.
(2) Multiple Procedure Payment Reduction (MPPR)
In the CY 2011 PFS final rule with comment period (75 FR 73232-
73242), we adopted a MPPR of 25 percent applicable to the practice
expense (PE) component of the second and subsequent therapy services
furnished to a beneficiary when more than one of these services is
furnished in a single session. This reduction applies to nearly 40
therapy service codes. (For a list of therapy service codes to which
this policy applies, see Addendum H.) The Physician Payment and Therapy
Relief Act of 2010 (PPATRA) subsequently revised the reduction to 20
percent for the second and subsequent therapy services furnished to a
beneficiary in an office setting, leaving the 25 percent reduction in
place for therapy services furnished to a beneficiary in institutional
settings. We adopted this MPPR as part of our directive under section
1848(c)(2)(K) of the statute, as added by section 3134(a) of the
Affordable Care Act, to identify and evaluate potentially misvalued
codes. By taking into consideration the expected efficiencies in direct
PE resources that occur when services are furnished together, this
policy results in more appropriate payment for therapy services.
Although we did not adopt this MPPR policy specifically as an
alternative to the therapy caps, paying more appropriately for
combinations of therapy services that are commonly furnished in a
single session reduces the number of beneficiaries impacted by the
therapy caps in a given year. For more details on the MPPR policy, see
section II.B.4. of this final rule with comment period.
(3) Studies Performed
The therapy cap is a uniform dollar amount that sets a limit on the
total value of services furnished unrelated to the specific services
furnished or the beneficiary's condition or needs. A uniform cap does
not deter unnecessary care or encourage efficient practice for low
complexity beneficiaries. In fact, it may even encourage the provision
of services up to the level of the cap. Conversely, a uniform cap
without an exceptions process restricts necessary and appropriate care
for certain high complexity beneficiaries. Recognizing these
limitations in a uniform dollar value cap, we have been studying
therapy practice patterns and exploring ways to refine payment for
these services as an alternative to therapy caps.
On November 9, 2004, the Secretary delivered the Report to
Congress, as required by the BBA as amended by the BBRA, ``Medicare
Financial Limitations on Outpatient Therapy Services.'' This report
included two utilization analyses. Although these analyses provided
details on utilization, neither specifically identified ways to improve
therapy payment. In the report, we indicated that further study was
underway to assess alternatives to the therapy caps. The report and the
analyses are available on the CMS Web site at www.cms.gov/TherapyServices/.
Since 2004, we have periodically updated the utilization analyses
and posted other reports on the CMS Web site. These reports highlighted
the expected effects of limiting services in various ways and presented
plans to collect data about beneficiary condition, including functional
limitations, using available tools. Through these efforts, we have made
progress in identifying the types of outpatient therapy services that
are billed to Medicare, the demographics of the beneficiaries who
utilize these services, the HCPCS codes used to bill the services, the
allowed and paid amounts of the services, the providers of these
services, the therapy utilization patterns among states in which the
services are furnished, and the type of practitioner furnishing
services.
From these and other analyses in our ongoing research effort, we
have concluded that without the ability to define the services that are
typically needed to address specific clinical cohorts of beneficiaries
(those with similar risk-adjusted conditions), it is not possible to
develop payment policies that encourage the delivery of reasonable and
necessary services while discouraging the provision of services that do
not produce a clinical benefit. Although there is widespread agreement
that beneficiary condition and functional limitations are critical to
developing and evaluating an alternative payment system for therapy
services, a system for collecting such data uniformly does not exist.
Currently diagnosis information is available from Medicare claims.
However, we believe that the diagnosis on the claim is a poor predictor
for the type and duration of therapy services required. Additional work
is needed to develop an appropriate system for classifying clinical
cohorts to determine therapy needs.
A 5-year CMS project titled ``Development of Outpatient Therapy
Payment Alternatives'' (DOTPA) is expected to provide some of this
information. The purpose of the DOTPA project is to identify a set of
measures that we could collect routinely and reliably to support the
development of payment alternatives to the therapy caps. Specifically,
the measures being collected are assessed for administrative
feasibility and usefulness in identifying beneficiary need for
outpatient therapy services and the outcomes of those services. The
data collection processes have just been completed and a final DOTPA
report is expected in late CY 2013. In addition to developing
alternatives to the therapy caps, the DOTPA project reflects our
interest in

[[Page 68960]]

value-based purchasing by identifying components of value, namely, the
beneficiary need and the effectiveness of therapy services. Although we
expect DOTPA to provide meaningful data and practical information to
assist in developing improved methods of paying for appropriate therapy
services, it is unlikely that this one project alone will provide
adequate information to implement a new payment system for therapy.
This study combined with data from a wider group of Medicare
beneficiaries would enhance our ability to develop alternative payment
policy for outpatient therapy services.
(c) System Description and Requirements
(1) Overview
Section 3005(g) of MCTRJCA requires CMS to implement a claims-based
data collection strategy on January 1, 2013 to gather information on
beneficiary function and condition, therapy services furnished, and
outcomes achieved. This information will be used in assisting us in
reforming the Medicare payment system for outpatient therapy services.
By collecting data on beneficiary function over an episode of therapy
services, we hope to better understand the Medicare beneficiary
population who uses therapy services, how their functional limitations
change as a result of therapy services, and the relationship between
beneficiary functional limitations and furnished therapy.
The long-term goal is to develop an improved payment system for
Medicare therapy services. The desired payment system would pay
appropriately and similarly for efficient and effective services
furnished to beneficiaries with similar conditions and functional
limitations that have potential to benefit from the services furnished.
Importantly, such a system would not encourage the furnishing of
medically unnecessary or excessive services. At this time, the data on
Medicare beneficiaries' use and outcomes from therapy services from
which to develop an improved system does not exist. This data
collection effort is the first step towards collecting the data needed
for this type of payment reform. Once the initial data have been
collected and analyzed, we expect to identify gaps in information and
determine what additional data would be needed to develop a new payment
policy. Without a better understanding of the diversity of
beneficiaries receiving therapy services and the variations in type and
volume of treatments provided, we lack the information to develop a
comprehensive strategy to map the way to an improved payment policy.
While this claims-based data collection is only the first step in a
long-term effort, it is an essential step.
In the CY 2013 proposed rule, we proposed to implement section
3005(g) of MCTRJCA by requiring that claims for therapy services
include nonpayable G-codes and modifiers. Through the use of these
codes and modifiers, we proposed to capture data on the beneficiary's
functional limitations (a) At the outset of the therapy episode, (b) at
specified points during treatment and (c) at discharge from the
outpatient therapy episode of care. In addition, the therapist's
projected goal for functional status at the end of treatment would be
reported on the first claim for services and periodically throughout an
episode of care.
Specifically, as proposed, G-codes would be used to identify what
type of functional limitation is being reported and whether the report
is on the current status, projected goal status or discharge status.
Modifiers would indicate the severity/complexity of the functional
limitation being tracked. The difference between the reported
functional status at the start of therapy and projected goal status
represents any progress the therapist anticipates the beneficiary would
make during the course of treatment/episode of care. We proposed that
these reporting requirements would apply to all therapy claims,
including those for services above the therapy caps and those that
include the KX modifier (described above).
By tracking any changes in functional limitations throughout the
therapy episode of care and at discharge, we would have information
about the therapy services furnished and the outcomes of such services.
The ICD-9 diagnosis codes reported on the claim form would provide some
information on the beneficiary's condition.
We proposed that these claims-based data collection requirements
would apply to services furnished under the Medicare Part B outpatient
therapy benefit and PT, OT, and SLP services under the Comprehensive
Outpatient Rehabilitation Facilities (CORF) benefit. We also proposed
to include therapy services furnished personally and ``incident to''
the services of physicians or nonphysician practitioners (NPPs). As we
explained in the proposed rule, this broad applicability would include
therapy services furnished in hospitals, critical access hospitals
(CAHs), skilled nursing facilities (SNFs), CORFs, rehabilitation
agencies, home health agencies (when the beneficiary is not under a
home health plan of care), and in private offices of therapists,
physicians and NPPs.
When used in this section ``therapists'' means all practitioners
who furnish outpatient therapy services, including physical therapists,
occupational therapists, and speech-language pathologists in private
practice and those therapists who furnish services in the institutional
settings, physicians and NPPs (including, physician assistants (PAs),
nurse practitioners (NPs), clinical nurse specialists (CNSs), as
applicable.) The term ``functional limitation'' generally encompasses
both the terms ``activity limitations'' and ``participation
restrictions'' as described by the International Classification of
Functioning, Disability and Health (ICF). (For information on ICF, see
www.who.int/classifications/icf/en/ and for specific ICF nomenclature
(including activity limitations and participation restrictions), see
http://apps.who.int/classifications/icfbrowser/.
The CY 2013 proposal was based upon an option for claims-based data
collection that was developed as part of the Short Term Alternatives
for Therapy Services (STATS) project under a contract with CMS, which
provided three options for alternatives to the therapy caps that could
be considered in the short-term before completion of the DOTPA project.
In developing options, the STATS project drew upon the analytical
expertise of CMS contractors and the clinical expertise of various
outpatient therapy stakeholders to consider policies and available
claims data. The options developed were:
Capturing additional clinical information regarding the
severity and complexity of beneficiary functional impairments on
therapy claims in order to facilitate medical review and at the same
time gather data that would be useful in the long term to develop a
better payment mechanism;
Introducing additional claims edits regarding medical
necessity to reduce overutilization; and
Adopting a per-session bundled payment, the amount of
which would vary based on beneficiary characteristics and the
complexity of evaluation and treatment services furnished in a therapy
session.
Although we did not propose to adopt any of these alternatives at
that time, we discussed and solicited public comments on all aspects of
these options during the CY 2011 rulemaking. (See 75 FR 40096 through
40100 and 73284 through 73293.) In developing the CY 2013 claims-based
data collection proposal, we used the feedback received from the CY
2011 rulemaking.

[[Page 68961]]

We noted in the proposal that the proposed claims-based data
collection system using G-codes and severity modifiers builds upon
current Medicare requirements for therapy services. Section 410.61
requires that a therapy plan of care (POC) be established for every
beneficiary receiving outpatient therapy services. This POC must
include: the type, amount, frequency, and duration of services to be
furnished to each beneficiary, the diagnosis and the anticipated goals.
Section 410.105(c) contains similar requirements for services furnished
in the CORF setting. We have long encouraged therapists, through our
manual provisions, to express the POC-required goals for each
beneficiary in functional terms and require that goals be based on
measureable assessments or objective data and relate to identified
functional impairments. See Pub 100-02, Chapter 15, Section 220.1.2. We
also noted that the evaluation and the goals developed as part of the
POC would be the foundation for the initial reporting under the
proposed system.
The following is a summary of the comments we received regarding
the general approach proposed in the CY 2013 PFS proposed rule to
require nonpayable G-codes and modifiers on therapy claims to implement
the new statutory requirement.
Comment: Most commenters supported a new payment system for therapy
services and recognized that data would be a critical factor in the
development of such a system. Others recognized that the statute
required CMS to implement a claims-based data collection system and
therefore addressed comments to the specific elements rather than the
overall requirement. Many commenters expressed concerns that the data
we would be collecting under the proposed system would not provide
adequate data for us to develop a new payment system. Many commenters
also expressed concern that the system would not provide the means for
therapists to adequately convey why some beneficiaries needed more
treatment. Toward this end, commenters suggested that we include a way
to risk adjust the data or collect more beneficiary information. Some
commenters suggested that we establish additional G-codes to report the
beneficiary's complexity, such as whether their condition is of low,
moderate, or high complexity. These G-codes would represent the
multiple variables that affect a beneficiary's condition and response
to therapy, such as age, comorbidities, prognosis, patient safety
considerations, and current clinical presentation. One association
indicated that it is working on an alternative payment system that will
define and use three levels of complexity. Many commenters pointed out
that the data we proposed to collect could only provide information on
the progress an individual beneficiary made and was not valid for
analyzing payment alternatives.
Response: We agree with commenters that the data collected under
this system will not alone provide all the information that CMS needs
to develop, analyze and implement an alternative payment system. We
agree with the commenters that factors such as the patient's overall
condition, including age, comorbidities, etc. are likely to affect the
response to therapy; and we further agree that being able to analyze
the data collected on such variables would enhance the usefulness of
our data. Although we agree with the commenters' that it could be
beneficial to include additional data elements to reflect the patient's
condition and the complexity of the case, a meaningful system to use in
classifying a beneficiary's complexity does not currently exist. As
experience is gained with this new system, we expect that through
future notice and comment rulemaking we will be able to enhance the
system.
Comment: Many commenters commented on the administrative burden
that therapists would incur if the proposed system was implemented.
Some commented that the administrative burden would be particularly
significant for physical therapists in private practice who often
submit claims after each therapy visit. Commenters labeled the proposal
``improper,'' ``unreasonable,'' and ``overly burdensome.'' Other
commenters indicated that the proposed process would not be burdensome
stating that the functional assessment tools they use were ``perfectly
suited to comply with CMS rule for data collection points, so we
anticipate little or no burden in complying with the collection of
function at intake, predicting discharge function at intake, during
care and at discharge from care.'' In addition to the many commenters
who noted the additional work that would be required to comply with
this system, one commenter suggested that we also add a billable G-code
to pay therapists for the additional work that this proposal would
require.
Response: While we recognize that complying with these new
reporting requirements will impose an additional burden on therapists,
we believe that having available additional data on the therapy
services furnished and the beneficiaries who receive them is critical
to development of an alternative payment system for therapy services.
Although we acknowledge that there would be work and some additional
effort in complying with these reporting requirements, we believe that
the additional burden is minimal. We designed our proposal to mesh
closely with information that therapists already include in the medical
record. The proposal would merely require that the information be
translated into the new G-codes and modifiers, and included in
additional lines on the same claims that would otherwise be submitted.
We do not believe this reporting requirement would significantly
increase the resources required to furnish therapy services.
Comment: A couple of commenters suggested that we abandon our G-
code/modifier proposal and use diagnosis codes in its place. One
recognized that CMS's assertion that diagnosis codes on the claims do
not provide the data that we need was valid when only the principal
diagnosis is used, but stated that if we relied upon principal and
secondary diagnosis we could obtain the additional information
regarding the patient's clinical condition and functional limitations.
The commenter provided the example of when hemiparesis was coded as the
secondary diagnosis. Some suggested that when the ICD-10 system is
implemented the diagnosis codes would provide better information.
Response: We continue to believe that diagnosis codes, even when
secondary diagnoses are included, do not provide the information on
functional limitations that the statute requires us to collect. In the
example the commenter provided, use of the diagnosis code
``hemiparesis,'' would only tell us that the beneficiary needs therapy
due to a paralysis or weakness on one side of his or her body caused by
a stroke or other brain trauma, but not the extent of the beneficiary's
functional limitation. With regard to use of ICD-10, the statute
requires us to implement a functional reporting system by January 1,
2013 so we cannot wait for ICD-10 system to implement the reporting
requirements.
Comment: One commenter requested to be exempted from these
reporting requirements because the organization furnishes such a small
amount of Part B outpatient therapy services. Another noted that
``Given that this policy may affect HOPDs only for 3 months, CMS should
consider ways to impose minimal administrative burden on HOPDs to
implement this policy.'' One commenter sought assurance that CAHs

[[Page 68962]]

were included in this data collection effort.
Response: As we indicated in the proposed rule, our goal is to have
data on the complete range of therapy services for which payment is
made based on the PFS for use in assessing and developing potential
alternative payment systems for those services. This is important since
any new payment system would likely apply to all those therapy services
that are currently paid at rates under the PFS. To meet this goal, we
proposed that the reporting requirements apply to all providers and
suppliers of outpatient therapy services and CORFs. We note that the
proposed policy would apply to hospital outpatient department services,
even if such services are not subject to the therapy caps after
December 31, 2012, and to services furnished in CAHs. We are finalizing
without change the proposed policy to apply the reporting requirements
to hospitals, SNFs, rehabilitation agencies, CORFs, home health
agencies (when the beneficiary is not under a home health plan of care)
and private offices.
Comment: Several commenters raised concerns about a new payment
system based upon the data collected without a standardized tool,
stating that such data would not provide reliable information on which
to develop an alternative payment system. Additionally, some commenters
believed the invalid data would be used to create a payment system
based upon functional limitations.
Response: At this time we are not making any changes in the
existing payment methodology for therapy services, except that
therapists will have to comply with the reporting requirements to
receive payment for furnished therapy services. Therapists will
continue to be paid in CY 2013 under the existing payment methodology,
which includes the therapy caps. We will closely monitor and implement
any enacted legislation that would amend the current statutory
provisions, including any amendment to extend the therapy cap
exceptions process. At this time we are broadly considering options for
a revised payment system for therapy services and do not have any
preconceived ideas as to what such a system would like or what it would
be based upon. The purpose of the data collection proposal described in
the CY 2013 PFS proposed rule is to meet the statutory requirement and
begin to gather data that will be used, along with other data and
information that we have, to develop and analyze potential alternative
payment systems. It is likely that changes will be made in the data
collected as we gain experience with this system. Therapists and others
concerned with Medicare payment for therapy services should not draw
conclusions about any future payment system for therapy services based
upon the claims-based data that we proposed to collect. The claims-
based data is only one set of information that will be used and it is
only a beginning step in gathering the information that we would need
to consider in developing a revised payment system for therapy
services.
Comment: Some commenters suggested that the ``preamble language
implies that improvement is a requirement for ongoing Medicare
coverage.'' One commenter suggested that the preamble language
``implies that a measurable improvement in a beneficiary's functional
limitation is required during an episode of therapy services.'' Others
expressed concern that some beneficiaries, such as those with spinal
cord injuries, will be denied coverage because they improve too slowly.
Response: We did not intend for the preamble language to raise
concern about changing coverage conditions for beneficiaries who need
therapy services. As noted above, the purpose of the claims-based data
collection system is simply to gather data, and we did not propose, nor
are we implementing, any changes to coverage or payment policy for
therapy services other than to require that therapists comply with the
reporting requirements to receive payment for therapy services they
furnish. Under existing IOM requirements, therapists have to establish
a long-term goal for beneficiaries receiving therapy. What is new under
this system is that at the outset of treatment, the therapist will need
to report on the claim the projected goal for treatment using modifiers
that describe the percentage of impairment. For beneficiaries who are
not expected to improve, such as those receiving maintenance therapy,
the same modifier would be used for current status and for projected
goal status. It is possible for some beneficiaries that while
improvement is expected, it is expected to be limited, and thus it will
also be reported using the same modifiers. To emphasize, the collection
of these data elements will not affect a beneficiary's coverage of
therapy services.
Comment: Some commenters expressed concerns about how this proposal
would affect individuals suffering from lymphedema. Commenters stated
that some clients experience both pain and swelling while others seem
to have only swelling of a limb. Successful management of a beneficiary
with lymphedema involves bandaging, compression and skin care
instruction, manual lymph drainage, decongestive therapy, manual lymph
drainage instruction, and exercise. These services take lots of
valuable practitioner time to perform correctly as does instructing
caregivers. While lymphedema impacts function to a point of mild to
severe disability, many commenters told us that lymphedema severity/
complexity is very difficult to quantify and show significant
functional improvements in the lymphatic system when many of these
improvements are in skin integrity, cellular health and lymphatic flow.
Other commenters stated that the patient's functional limitations due
to lymphedema (restricted motion and/or mobility) can range from
profound to minimal. But all lymphedema patients, including those
proficient in self-care who have minimal functional limitations, are at
great risk for developing cellulitis or other major medical
complications from sustained tissue congestion of the lymphatic system.
With ongoing or periodic management, as appropriate, therapy services
can successfully prevent these medical crises. Many commenters
expressed concern that coverage for therapy services relating to
lymphedema would be denied as a result of this proposal. Others
questioned which functional limitation to use for lymphedema patients.
Response: As noted earlier, we did not propose to change coverage
policy or to use the claims-based data reporting system to determine
which beneficiaries are entitled to therapy services. Instead, our
proposal would require those furnishing care to provide certain
information about the beneficiary and his or her expected response to
therapy. We are reiterating in this final rule with comment period that
the proposed claims-based data collection system makes no changes in
our therapy coverage policies.
With regard to how those treating beneficiaries should comply with
the data collection system, we expect therapists to report the G-code
for the functional limitation that most closely relates to the
functional limitation being treated. As a result of comments on the
proposed rule, we are clarifying in this final rule with comment period
that if the therapy services being furnished are not intended to treat
a functional limitation, the therapist should use the G-code for
``other'' and the modifier representing zero.
Comment: Several commenters suggested that significant education
will

[[Page 68963]]

be required for therapists to comply with this required reporting.
Response: We are publishing in this final rule with comment period
the claims-based reporting requirements that must be met in order to
receive payment for therapy services. We will also use our usual
methods for providing additional information, including revising
relevant sections of the IOM, publishing Medicare Learning Network
(MLN) Matters articles; presentations on Open Door Forums, and
conducting National Provider Calls on the new requirements. We urge
therapist to use these tools to assure that they have the information
they need to comply with these new requirements.
(2) Nonpayable G-Codes on Beneficiary Functional Status
We proposed that therapists would report G-codes and modifiers on
Medicare claims for outpatient therapy services. We discussed and
sought comment on two types of G-codes in the proposed rule--generic
and categorical. Table 19 shows the proposed generic G-codes and Table
20 shows the categorical codes discussed in the proposed rule.

Table 19--Proposed Nonpayable G-Codes for Reporting Functional
Limitations
------------------------------------------------------------------------

------------------------------------------------------------------------
Functional limitation for primary functional limitation:
Primary Functional limitation, Current status at initial GXXX1
treatment/episode outset and at reporting intervals.....
Primary Functional limitation, Projected goal status..... GXXX2
Primary Functional limitation, Status at therapy GXXX3
discharge or end of reporting...........................
Functional limitation for a secondary functional limitation
if one exists:
Secondary Functional limitation, Current status at GXXX4
initial treatment/outset of therapy and at reporting
intervals...............................................
Secondary Functional limitation, Projected goal status... GXXX5
Secondary Functional limitation, Status at therapy GXXX6
discharge or end of reporting...........................
Provider attestation that functional reporting not required:
Provider confirms functional reporting not required...... GXXX7
------------------------------------------------------------------------

The proposed G-codes differ from the three separate pairs of G-
codes discussed in the CY 2011 PFS rulemaking. The CY 2011 discussion
included these three pairs of G-codes, all of which reflect specific
ICF terminology:
Impairments of Body Functions and/or Impairments of Body
Structures;
Activity Limitations and Participation Restrictions; and
Environmental Factors Barriers.

Each pair contained a G-code to represent the beneficiary's current
functional status and another G-code to represent the beneficiary's
projected goal status. Each claim would have required all three sets of
G-codes. Like the G-codes we proposed for CY 2013, the G-codes
discussed in the CY 2011 PFS rulemaking would have been used with
modifiers to reflect the severity/complexity of each element.
In the CY 2013 PFS proposed rule, we indicated that we were not
proposing to use these specific G-codes because we found them to be
potentially redundant and confusing. Instead we chose to use G-codes to
define ``functional limitations'' synonymously with the ICF terminology
``activity limitations and participation restrictions.'' We noted that
requiring separate reporting on three elements would have imposed a
greater burden on therapists without providing a meaningful benefit in
the value of the data provided. We added that because environmental
barriers as discussed in CY 2011 are contextual, we did not believe
collecting information on them would contribute to developing an
improved payment system.
To create the select categories of G-codes discussed in the
proposed rule (See Table 20) we used the two most frequently reported
functional limitations in the DOTPA project by each of the three
therapy disciplines. We noted that should we decide to use a system
with category-specific reporting, we would expect to develop specific
nonpayable G-codes for select categories of functional limitations in
the final rule. We explained that if one of the select categories of
functional limitations describes the functional limitation being
reported, that G-code set would be used to report the current,
projected goal, and discharge status of the beneficiary. When reporting
a functional limitation not described by one of categorical G-codes,
one of the generic G-codes previously described would be used.

Table 20--Select Categories of G-Codes Discussed in Proposed Rule
------------------------------------------------------------------------

------------------------------------------------------------------------
Walking & Moving Around
Walking & moving around functional limitation, current GXXX8
status at time of initial therapy treatment/episode
outset and reporting intervals..........................
Walking & moving around functional limitation, projected GXXX9
goal status, at initial therapy treatment/outset and at
discharge from therapy..................................
Walking & moving around functional limitation, discharge GXX10
status, at discharge from therapy/end of reporting on
limitation..............................................
Changing & Maintaining Body Position
Changing & maintaining body position functional GXX11
limitation, current status at time of initial therapy
treatment/episode outset and reporting intervals........
Changing & maintaining body position functional GXX12
limitation, projected goal status at initial therapy
treatment/outset and at discharge from therapy..........
Changing & maintaining body position functional GXX13
limitation, discharge status at discharge from therapy/
end of reporting on limitation..........................
Carrying, Moving & Handling Objects
Carrying, moving & handling objects functional GXX14
limitation, current status at time of initial therapy
treatment/episode outset and reporting intervals........
Carrying, moving & handling objects functional GXX15
limitation, projected goal status at initial therapy
treatment/outset and at discharge from therapy..........

[[Page 68964]]

Carrying, moving & handling objects functional GXX16
limitation, discharge status at discharge from therapy/
end of reporting on limitation..........................
Self Care (washing oneself, toileting, dressing, eating,
drinking)
Self care functional limitation, current status at time GXX17
of initial therapy treatment/episode outset and
reporting intervals.....................................
Self care functional limitation, projected goal status at GXX18
initial therapy treatment/outset and at discharge from
therapy.................................................
Self care functional limitation, discharge status at GXX19
discharge from therapy/end of reporting on limitation...
Communication: Reception (spoken, nonverbal, sign language,
written)
Communication: Reception functional limitation, current GXX20
status at time of initial therapy treatment/episode
outset and reporting intervals..........................
Communication: Reception functional limitation, projected GXX21
goal status at initial therapy treatment/outset and at
discharge from therapy..................................
Communication: Reception functional limitation, discharge GXX22
status at discharge from therapy/end of reporting on
limitation..............................................
Communication: Expression (speaking, nonverbal, sign
language, writing)
Communication: Expression functional limitation, current GXX23
status at time of initial therapy treatment/episode
outset and reporting intervals..........................
Communication: Expression functional limitation, GXX24
projected goal status at initial therapy treatment/
outset and at discharge from therapy....................
Communication: Expression functional limitation, GXX25
discharge status at discharge from therapy/end of
reporting on limitation.................................
------------------------------------------------------------------------

We sought input from therapists on categories of functional
limitations, such as those described in this section. We specifically
requested comments regarding the following questions: Would data
collected on categories of functional limitations provide more
meaningful data on therapy services than that collected through use of
the generic G-codes in our proposal? Should we choose to implement a
system that is based on at least some select categories of functional
limitation, which functional limitations should we collect data on in
2013? Is it more, less or the same burden to report on categories of
functional limitations or generic ones? The categories of functional
limitations described above are based on the ICF categories, but these
ICF categories also have subcategories. Should we use subcategories for
reporting? Are there specific conditions not covered by these ICF
categories? Would we need to have G-codes for the same categories of
secondary limitations? We sought public comment on whether these
proposed G-codes allow adequate reporting on beneficiary's functional
limitations. We also noted that we would particularly appreciate
receiving specific suggestions for any missing elements.
The following is a summary of the comments we received on the G-
codes, generic and categorical, whether these proposed G-codes allow
adequate reporting on beneficiary's functional limitations, and
specific suggestions for any missing elements.
Comment: Two commenters disagreed with our proposal to develop new
G-codes and instead encouraged us to use the three pairs of G-codes
(activities and participation restrictions, impairments to body
functions/structures and environmental barriers) from the STATs project
to report functional limitations. These commenters agreed that adding
these domains might be more burdensome, but one commenter suggested
that without these data elements we would likely miss integral
beneficiary data in relation to health and wellness benefits, such as
increased muscle function, improved quality of life, decreased
depression, improved bowel/bladder function, improved respiratory
function, improved autonomic function and improved circulation. Another
commenter specifically agreed with our decision to use only the one
ICF-defined G-code from the STATS for activity impairments and
participation restrictions. They noted that it would be potentially
redundant and confusing to adopt the two additional G-codes for body
functions/structures and environmental barriers and noted that these
other two categories would ``provide the agency with little meaningful
data.'' One commenter suggested that if we adopted this additional
reporting we could minimize the additional burden by eliminating goal
reporting.
Response: We appreciate the views of these commenters about which
ICF categories to capture in our G-code data collection. We continue to
believe that the reporting of functional limitations will be less
confusing and more defined with the G-codes as described in our
proposal for activity impairments/participation restrictions. As we
move forward with functional reporting in following years, we may
revisit the addition of other categories.
Comment: Commenters had divergent views on the categorical and
generic G-codes. Many found the proposed system complicated, burdensome
and stated that it would not provide the data we sought. Some
criticized the categorical codes as being too broadly defined and
stated that this will lead to confusion as to what areas of impairment
are being reported. For example, one commenter stated, ``The suggested
categories are very broad and, in our view, will lead to confusion
regarding which areas of impairment would be reported for certain
therapy activities.'' One commenter opposed the use of generic G-codes
saying that data from these codes would be ``useless.'' On the other
hand, we received much support for the proposed G-codes. Many
commenters supported the use of categorical G-codes codes saying their
use will provide more useful information than the generic ones. One
commenter stated, ``We believe having therapists report on these
categories will provide CMS with more useful information than generic
reporting on a functional limitation.'' Many favored use of the
categorical G-codes in addition to using ``generic'' or ``other'' codes
only for functional limitations that did not fit in one of the
categorical ones. Several commenters gave us specific guidance,
recommending that instead of the generic G-codes, we add an ``other''
G-code to the categorical codes for functional limitations that don't
fit into one of the defined categories.
Response: Based upon the comments we received suggesting that we
use the categorical codes, but include an ``other'' category to use
when one of the categorical codes does not apply, we are modifying our
proposal to adopt categorical G-codes to define functional limitations
and including within the categorical G-codes ``other'' G-codes to use
when one of the more specific categorical codes does not apply. In
addition to this change, as discussed below, we are replacing the two
SLP categorical codes with eight new ones to better reflect the
diversity of services

[[Page 68965]]

furnished. Table 21 provides a complete list of the codes that will be
available for reporting functional limitations. With regard to the
commenters' concern that the categories are too broad and this will
lead to confusion as to what is being reported, we acknowledge that the
categories are broad, but disagree that the use of broad categories
will result in confusion. Instead, we believe that the result will be
the collection of data that includes information on broadly defined
functional limitations. Without more specific input and greater support
from the commenters, we do not believe we should create these in this
final rule with comment period. Moreover, we believe it is important to
gain experience with a limited number of codes in this new reporting
system before we vastly expand the number of codes that are used. We
sought comment on ways to better define the categories and where we
received specific suggestions for additional G-codes that were
sufficiently developed, such as those for SLP (explained below), we
included them in our final set of G-codes. We anticipate that we will
continue to refine the categories through future notice and comment
rulemaking as we get more information and experience with this system.
Comment: Several commenters pointed out that there were many
functional limitations for which there was not a categorical G-code.
The American Speech-Language and Hearing Association pointed out the
lack of appropriate SLP categories and suggested that we take advantage
of the experience that has been gained through the use of its system
for collecting data on functional limitations in this area.
Specifically, they urged us to assign G-codes to the top seven reported
functional communication measures used in National Outcomes Measurement
System (NOMS). This commenter stated that, using this system, we would
be able to collect ``consistent'' and ``meaningful'' ratings across all
settings nationally.
Others told us that there were many conditions and situations that
our system did not address and that some of these beneficiaries did not
exhibit functional limitations that could be easily measured or
reported. They cited, as examples, beneficiaries seen for lymphedema
management, wound care, wheelchair assessment/fitting, cognitive
impairments, and incontinence training.
Response: We agree with commenters that the G-codes discussed in
the proposed rule did not go far enough in addressing SLP functional
limitations. After consideration of the comments, we also agree that
adoption of the most frequently used NOMS measures would be the best
way to address this issue and would significantly improve our system in
several ways. By using a system familiar to many speech-language
pathologists, the quality of our data collection will be enhanced and
the burden on those reporting will be less. We agree that it is
reasonable to incorporate categories that are more specific, when
appropriate, and note that this is an opportunity to align with
existing measurement systems.
Accordingly, we are replacing the two of the categorical codes
relating to SLP with seven categorical codes and one ``other'' code for
SLP. (See Table 21.) The seven categorical codes mirror the seven most
frequently reported NOMS categories and should be used when
appropriate. For all other SLP treatments, the ``SLP Other'' category
should be used.
For functional limitations not defined by the specific categorical
codes and for therapy services that are not addressing a particular
functional limitation; the ``other'' G-codes should be used. As we
begin collecting data in this initial year, we will continue to assess
the need for additional G-codes, refinement of existing ones, and
examine ways to address those situations for which beneficiaries do not
have functional limitations.
We have addressed in this final rule with comment period those
areas for which we have adequate information to do so at this time and
for which an additional burden will not be created. We will continue to
refine this system through further notice and comment rulemaking in
future years.
Comment: We received mixed feedback in response to our request for
comment regarding the use of the ICF subcategories. Some commenters
noted that adding more subcategories would result in too many codes and
only add to the confusion. At least one other commenter supported
subcategory reporting, but did not suggest which subcategories we
should use.
Response: Given the comments received, we will not be implementing
reporting by subcategories at this time. Once the system is
operational, we will reassess whether subcategory reporting is
necessary to provide the data that we need.
Comment: Some commenters interpreted our proposal to limit each
therapy discipline to using only the two codes that represented the top
two reported functional limitations for that discipline and suggested
that we allow therapists to use any appropriate functional limitation.
Response: We agree with commenters that therapists should be able
to use any appropriate functional limitation. In the proposed rule, we
indicated that we developed the 6 categorical codes to correspond with
the two most commonly reported functional limitations for each of the
three therapy disciplines. However, this was only a way of identifying
the functional limitations for which we needed codes. To be clear,
therapists are to use the most appropriate categorical G-code that
describes the functional limitation that is the primary reason for
treatment without restriction by discipline.
Comment: A few commenters urged us to clarify that therapists using
Patient Inquiry by Focus on Therapeutic Outcomes, Inc (FOTO), or
another measurement system that provides a composite functional status
score, did not need to report on secondary limitations.
Response: In assessing this comment, we recognized the need to
clarify how composite functional scores should be reported. We are
clarifying that a composite score should be reported using G8990 (Other
physical or occupational primary functional limitation, current status,
at therapy episode outset and at reporting intervals), G8991(Other
physical or occupational primary functional limitation, projected goal
status, at therapy episode outset, at reporting intervals, and at
discharge or to end reporting) and G8992 (Other physical or
occupational primary functional limitation, discharge status, at
discharge from therapy or to end reporting). Should there be the
occasion to report on a second condition after the reporting on the
first had ended, the therapist would use the G-code set for ``other
subsequent'' functional limitation, G8993-G8896.
(3) Number of Functional Limitations on Which Reporting Occurs
We proposed that, using a set of G-codes with appropriate
modifiers, the therapist would report the beneficiary's primary
functional limitation defined as the most clinically relevant
functional limitation at the time of the initial therapy evaluation and
the establishment of the POC. The projected goal would also be reported
at this time. At specified intervals during treatment, claims would
also include the current functional status and the goal functional
status, which would not typically change during therapy, except as
described below. On the final claim for an episode of care, the
therapist would report the status at this time for this functional
limitation and the goal status.

[[Page 68966]]

Early results from the DOTPA project suggest that most
beneficiaries have more than one functional limitation at treatment
outset. In fact, only 21 percent of the DOTPA assessments reported just
one functional limitation. Slightly more than half (54 percent)
reported two, three or four functional limitations.
To the extent that the DOTPA finding is typical, the therapist may
need to make a determination as to which functional limitation is
primary for reporting purposes. In cases where this is unclear, the
therapist may choose the functional limitation that is most clinically
relevant to a successful outcome for the beneficiary, the one that
would yield the quickest and/or greatest mobility, or the one that is
the greatest priority for the beneficiary. In all cases, this primary
functional limitation should reflect the predominant limitation that
the furnished therapy services are intended to address.
We sought comment on specific issues regarding reporting data on a
secondary limitation. Specifically, we requested comments regarding
whether reporting on secondary functional limitations should be
required or optional.
The following is a summary of the comments we received on the
percentage of Medicare therapy beneficiaries with more than one
functional limitation at the outset of therapy and whether reporting on
secondary functional limitations should be required or optional.
Comment: The responses on the number of functional limitations
being treated showed a wide variation. One commenter treating
beneficiaries with spinal cord injuries indicated that 100 percent had
more than one functional limitation, with an average of 10 functional
limitations. Another respondent told us that 50 percent of SLP patients
have two or more functional limitations. Another respondent indicated
that nearly 98 percent of patients seen by therapists using FOTO were
surveyed for only one condition. Most commenters recommended that
therapists be required to report only one functional limitation,
especially as we are just beginning to require functional reporting.
The commenters stated that it would be burdensome and would pose
clinical challenges to require reporting both a primary and secondary
functional limitation. Others suggested that it would be costly, time
intensive and burdensome to report numerous secondary functional
limitations. Some stated that reporting on only one functional
limitation would not capture sufficient information since treatment of
multiple functional limitations is interrelated and treatment for these
occurs simultaneously, not sequentially. Some commenters suggested
allowing the optional reporting of a second or third functional
limitation. Some commenters questioned how functional reporting would
be handled when the beneficiary was being treated by more than one
discipline or when a substitute therapist treats a beneficiary.
Response: In response to comments, we have decided to limit
reporting to one functional limitation at this time. Recognizing that
therapists treat the patient as a whole and work on more than one
functional limitation at a time, we believe that limiting reporting in
this way will make it less burdensome in the situations involving more
than one functional limitation. Although many commenters favored the
option of reporting on additional functional limitations when
appropriate, we believe that allowing additional optional reporting
would not produce consistent or useful data on beneficiaries who have
more than one functional limitation that is being treated, and could
potentially complicate the use of the data we collect for the
development of future therapy payment policy. As we seek to improve
reporting in future years, we may reconsider whether to permit or
require reporting on additional functional limitations. We note that
this is a new reporting system designed to gather data on the changes
in beneficiary function throughout an episode of care. We are not
expecting therapists to change the way they treat patients because of
our reporting requirements.
We also explained that in situations where treatment continues
after the treatment goal is achieved and reporting ended on the primary
functional limitation, reporting will be required for another
functional limitation. Thus, reporting on more than one functional
limitation may be required for some patients, but not simultaneously.
Instead, once reporting on the primary functional limitation is
complete, the therapist will begin reporting on a subsequent functional
limitation using another set of G-codes. If this additional functional
limitation is not described by one of the specific categorical codes,
one of the three ``other'' codes should be used depending on the
circumstances.
In response to the comments, we are making several modifications in
the G-codes that we proposed, as noted in the responses to comments
above. To summarize, the G-codes, and their long descriptors, that will
be used for reporting functional limitations of beneficiaries are
listed in Table 21. There are 11 G-codes that describe categorical
functional limitation, including seven for SLP services, and three more
general G-codes for functional limitations that do not fit within one
of the 11 categories. The general categorical codes would be used when
none of the specific categories apply or when an assessment tool is
used that yields a composite score that combines several or many
functional measures, such as is done with the FOTO Patient Inquiry
tool, for example. Two of these general G-code sets are to be used for
``other'' PT and OT services and one for ``other'' SLP services. In
addition, we deleted the requirement to report a G-code to signal that
no reporting was required and thus deleted the G-code that would have
been used for this. (For discussion about the comments on this G-code
and our decision to remove this reporting requirement, see section
II.F.2.(b).(6).) Therapists would use the code that best describes the
functional limitation that is primary to the therapy plan of care.

Table 21--G-Codes for Claims-Based Functional Reporting for CY 2013
------------------------------------------------------------------------

------------------------------------------------------------------------
Mobility: Walking & Moving Around
------------------------------------------------------------------------
G8978.................... Mobility: walking & moving around functional
limitation, current status, at therapy
episode outset and at reporting intervals.
G8979.................... Mobility: walking & moving around functional
limitation, projected goal status, at
therapy episode outset, at reporting
intervals, and at discharge or to end
reporting.
G8980.................... Mobility: walking & moving around functional
limitation, discharge status, at discharge
from therapy or to end reporting.
------------------------------------------------------------------------
Changing & Maintaining Body Position
------------------------------------------------------------------------
G8981.................... Changing & maintaining body position
functional limitation, current status, at
therapy episode outset and at reporting
intervals.

[[Page 68967]]

G8982.................... Changing & maintaining body position
functional limitation, projected goal
status, at therapy episode outset, at
reporting intervals, and at discharge or to
end reporting.
G8983.................... Changing & maintaining body position
functional limitation, discharge status, at
discharge from therapy or to end reporting.
------------------------------------------------------------------------
Carrying, Moving & Handling Objects
------------------------------------------------------------------------
G8984.................... Carrying, moving & handling objects
functional limitation, current status, at
therapy episode outset and at reporting
intervals.
G8985.................... Carrying, moving & handling objects
functional limitation, projected goal
status, at therapy episode outset, at
reporting intervals, and at discharge or to
end reporting.
G8986.................... Carrying, moving & handling objects
functional limitation, discharge status, at
discharge from therapy or to end reporting.
------------------------------------------------------------------------
Self Care
------------------------------------------------------------------------
G8987.................... Self care functional limitation, current
status, at therapy episode outset and at
reporting intervals.
G8988.................... Self care functional limitation, projected
goal status, at therapy episode outset, at
reporting intervals, and at discharge or to
end reporting.
G8989.................... Self care functional limitation, discharge
status, at discharge from therapy or to end
reporting.
------------------------------------------------------------------------
Other PT/OT Primary Functional Limitation
------------------------------------------------------------------------
G8990.................... Other physical or occupational primary
functional limitation, current status, at
therapy episode outset and at reporting
intervals.
G8991.................... Other physical or occupational primary
functional limitation, projected goal
status, at therapy episode outset, at
reporting intervals, and at discharge or to
end reporting.
G8992.................... Other physical or occupational primary
functional limitation, discharge status, at
discharge from therapy or to end reporting.
------------------------------------------------------------------------
Other PT/OT Subsequent Functional Limitation
------------------------------------------------------------------------
G8993.................... Other physical or occupational subsequent
functional limitation, current status, at
therapy episode outset and at reporting
intervals.
G8994.................... Other physical or occupational subsequent
functional limitation, projected goal
status, at therapy episode outset, at
reporting intervals, and at discharge or to
end reporting.
G8995.................... Other physical or occupational subsequent
functional limitation, discharge status, at
discharge from therapy or to end reporting.
------------------------------------------------------------------------
Swallowing
------------------------------------------------------------------------
G8996.................... Swallowing functional limitation, current
status at time of initial therapy treatment/
episode outset and reporting intervals.
G8997.................... Swallowing functional limitation, projected
goal status, at initial therapy treatment/
outset and at discharge from therapy.
G8998.................... Swallowing functional limitation, discharge
status, at discharge from therapy/end of
reporting on limitation.
------------------------------------------------------------------------
Motor Speech
------------------------------------------------------------------------
G8999.................... Motor speech functional limitation, current
status at time of initial therapy treatment/
episode outset and reporting intervals.
G9157.................... Motor speech functional limitation, projected
goal status at initial therapy treatment/
outset and at discharge from therapy.
G9158.................... Motor speech functional limitation, discharge
status at discharge from therapy/end of
reporting on limitation.
------------------------------------------------------------------------
Spoken Language Comprehension
------------------------------------------------------------------------
G9159.................... Spoken language comprehension functional
limitation, current status at time of
initial therapy treatment/episode outset and
reporting intervals.
G9160.................... Spoken language comprehension functional
limitation, projected goal status at initial
therapy treatment/outset and at discharge
from therapy.
G9161.................... Spoken language comprehension functional
limitation, discharge status at discharge
from therapy/end of reporting on limitation.
------------------------------------------------------------------------
Spoken Language Expression
------------------------------------------------------------------------
G9162.................... Spoken language expression functional
limitation, current status at time of
initial therapy treatment/episode outset and
reporting intervals.
G9163.................... Spoken language expression functional
limitation, projected goal status at initial
therapy treatment/outset and at discharge
from therapy.
G9164.................... Spoken language expression functional
limitation, discharge status at discharge
from therapy/end of reporting on limitation.
------------------------------------------------------------------------
Attention
------------------------------------------------------------------------
G9165.................... Attention functional limitation, current
status at time of initial therapy treatment/
episode outset and reporting intervals.
G9166.................... Attention functional limitation, projected
goal status at initial therapy treatment/
outset and at discharge from therapy.
G9167.................... Attention functional limitation, discharge
status at discharge from therapy/end of
reporting on limitation.
------------------------------------------------------------------------
Memory
------------------------------------------------------------------------
G9168.................... Memory functional limitation, current status
at time of initial therapy treatment/episode
outset and reporting intervals.
G9169.................... Memory functional limitation, projected goal
status at initial therapy treatment/outset
and at discharge from therapy.
G9170.................... Memory functional limitation, discharge
status at discharge from therapy/end of
reporting on limitation.
------------------------------------------------------------------------

[[Page 68968]]

Voice
------------------------------------------------------------------------
G9171.................... Voice functional limitation, current status
at time of initial therapy treatment/episode
outset and reporting intervals.
G9172.................... Voice functional limitation, projected goal
status at initial therapy treatment/outset
and at discharge from therapy.
G9173.................... Voice functional limitation, discharge status
at discharge from therapy/end of reporting
on limitation.
------------------------------------------------------------------------
Other SLP Functional Limitation
------------------------------------------------------------------------
G9174.................... Other speech language pathology functional
limitation, current status at time of
initial therapy treatment/episode outset and
reporting intervals.
G9175.................... Other speech language pathology functional
limitation, projected goal status at initial
therapy treatment/outset and at discharge
from therapy.
G9176.................... Other speech language pathology functional
limitation, discharge status at discharge
from therapy/end of reporting on limitation.
------------------------------------------------------------------------

(4) Severity/Complexity Modifiers
We proposed that for each functional G-code used on a claim, a
modifier would be required to report the severity/complexity for that
functional limitation. We proposed to adopt a 12-point scale to report
the severity or complexity of the functional limitation involved. The
proposed modifiers are listed in Table 22.

Table 22--Proposed Modifiers
------------------------------------------------------------------------
Impairment limitation
Modifier restriction difficulty
------------------------------------------------------------------------
XA........................................ 0%.
XB........................................ Between 1-9%.
XC........................................ Between 10-19%.
XD........................................ Between 20-29%.
XE........................................ Between 30-39%.
XF........................................ Between 40-49%.
XG........................................ Between 50-59%.
XH........................................ Between 60-69%.
XI........................................ Between 70-79%.
XJ........................................ Between 80-89%.
XK........................................ Between 90-99%.
XL........................................ 100%.
------------------------------------------------------------------------

We noted that there are many valid and reliable measurement and
assessment tools that therapists use to inform their clinical decision-
making and to quantify functional limitations, including the four
assessment tools we discussed in CY 2011 PFS rulemaking that produce
functional scores--namely, the Activity Measure--Post Acute Care (AM-
PAC) tool, the FOTO Patient Inquiry, OPTIMAL, and NOMS. We list these
four tools as recommended for use by therapists, though not required,
in the outpatient therapy IOM provision of the Benefits Policy Manual,
Chapter 15, Section 220.3C ``Documentation Requirements for Therapy
Services.'' We suggested that the scores from these and other
measurement tools already in use by therapists that produce numerical
or percentage scores be mapped or crosswalked to the proposed 12-point
severity modifier scale.
In assessing the ability of therapists to provide the required
severity information regardless of what assessment tool or combination
of tools they use, if any, we considered the comments received on the
CY 2011 PFS proposed rule discussion. These indicated that we needed
greater granularity in our severity scale so that the changes in
functional limitation over the course of therapy could be more
accurately reflected. Specifically, most commenters on the CY 2011
proposed rule favored the 7-point scale over the 5-point ICF-based
scale. They indicated that they preferred a scale with more severity
levels and equal increments since it would allow the therapist to
document smaller changes that many therapy beneficiaries make towards
their goals.
Believing that neither the 5- or 7-point scales would be adequate
for this reporting system, we developed and proposed a 12-point scale
that we believed was an enhancement over the 7-point scale. We thought
it addressed concerns that those commenting on the CY 2011 options had
raised regarding the 7-point scale. We thought that a more sensitive
rating scale (one with more increments) had the advantage of
demonstrating the progress of beneficiaries with conditions that
improve slowly, such as those recovering from strokes or with spinal
cord injuries. In addition, we believed that the proposed scale's 10-
percentage point increments would make it easier for therapists to
convert composite and overall scores from assessment instruments or
other measurement tools to this scale.
The following is a summary of the comments we received regarding
our proposal for a 12-point scale to capture the severity/complexity of
beneficiaries' functional limitations.
Comment: Several commenters stated that not all tests and
measurement tools that therapists use could be easily crosswalked to
any single numerical scale, stating that, for example, some tests and
measures of functional limitations use ordinal scales. Further, the
scores from some tests that are not linear or proportional to each
other are not easily translatable to the 12-point scale. Some
commenters pointed out the problems of developing a single score when
more than one tool is used. Some commenters noted that there are a wide
variety of therapy measurement tools that are used to inform clinical
decision making and these are not measures that typically produce a
functional assessment. Further, these commenters told us that combining
the results of multiple measures make it extremely difficult to
quantify beneficiary function and, as such, said it will be very
difficult to crosswalk this type of information to a severity scale.
And, many of these commenters expressed concerns about how therapist
will implement the use of our severity/complexity modifier scale; they
noted that much education is needed for therapists to understand the
selection of a severity modifier. One commenter questioned whether
aggregated subjective and objective data would be valid or usable by
CMS.
Response: It is essential that the data reported on functional
limitations be grouped using the same numeric scale. Moreover, we
believe that is easier for those reporting data on functional
limitations to use ranges of percentages rather than the absolute
values. We acknowledge that therapists will incur some challenges when
initially adopting our system as they learn how to translate the
information obtained through various tests and measures to a particular
modifier scale. However, as therapists gain experience in doing so, we
anticipate that these translations will become easier and a normal part
of their evaluative and treatment processes. Moreover, we are hopeful
that forthcoming modifications from tool sponsors or others will make
it easier for therapists to report the functional

[[Page 68969]]

limitations measured by these tools, such as modifying the tool so the
results match the Medicare severity/complexity scale or issuing
instructions or guidance on translating the results to the Medicare
severity/complexity scale. We also expect that some translation tools
are likely to become available. We are hopeful that forthcoming
guidance and translation tools from tool sponsors and others will
clarify some of translation questions therapists have regarding the
Medicare severity scale. Given that it is essential for our purposes to
have a severity/complexity scale, we are adopting one in this final
rule. With regard to education, CMS will make information about the
severity/complexity scale, as well as other aspects of our new system,
widely available to therapists. It will be incumbent upon individual
therapists to learn how to translate the score from a singular
assessment tool or the combined results from multiple tests/measures
along with other information regarding their patient's functional
limitation to the Medicare scale. Finally, we acknowledge that a system
that combines objective and subjective data is not ideal. However, at
this time it appears that there is not an alternative. We will continue
to refine and improve this system.
Comment: Some commenters offered alternative suggestions to the use
of a severity/complexity scale. Several commenters suggested that we
use the secondary diagnoses on claims instead. Others suggested
capturing the medical complexity of a beneficiary using other
indicators, such as E/M codes or co-morbidities.
Response: We appreciate these suggestions. While we are able to
collect secondary diagnosis data from claims, we know from prior
studies that diagnoses alone cannot predict the amount of therapy
services needed. We do not believe that diagnoses and comorbidities
measure functional limitations, which the statute requires us to
collect. Nor do we believe using existing or therapy-specific E/M codes
would provide the data on functional limitations that we are seeking to
collect. We do, however, believe that these elements may provide
additional data that could contribute to our analysis of payment
alternatives. As we consider refinements to the claims-based data
collection system in future years we will consider these additional
data elements.
Comment: Commenters had differing views on the use of the proposed
12-point scale to convey the severity of the beneficiary's functional
limitations. Those supporting the use of the proposed 12-point scale
stated that it was more sensitive and so better reflected change in a
beneficiary's functional limitation. For example, commenters using FOTO
said that they would not have problems adopting our proposed 12-point
scale because they receive a composite score from FOTO, based on the
patient's functional survey results, which can be easily mapped as a
percentage of overall beneficiary function. Other commenters suggested
that the 12-point scale we proposed was too complicated and had too
many levels. Some of these commenters also stated that therapists were
not familiar with such a scale. Several commenters believed that we
should modify the 12-point scale to a 10-point one by eliminating the
separate modifiers for zero and 100 percent because they believed it
would be more recognizable and easier for therapists to use. Many
suggested that we use the 7-point scale discussed in the CY 2011
rulemaking. A couple of these commenters thought that this 7-point
scale was a valid and reliable one. Another commenter added that a 7-
point scale is used by many outcome tools, such as NOMS, although no
other examples of a tool using a 7-point scale were provided. One
commenter was opposed to a severity/complexity scale but suggested that
if one was used, it should be a 5- or 7-point scale.
Response: After reviewing the comments, it is clear to us that,
given the diversity of views among therapy professionals, the range in
functional limitations being measured, the variability of beneficiary
conditions being treated and the plethora of assessment tools and
instruments being used, the translation of functional information to
any scale used is likely to require adjustments by some therapists.
Although we proposed a 12-point scale as we thought it would be easier
to use and provided more sensitivity, a majority of commenters favored
the 7-point scale over the 12-point scale. After consideration of the
many comments on the use of a 12-point scale, we have determined that a
7-point scale as preferred by commenters will provide appropriate data
for our analysis. Accordingly, are finalizing the 7-point scale in
Table 23.
Comment: Some commenters read our proposal to require that
therapists use one of the IOM-recommended assessment tools, and thought
that we should allow therapists to assign a severity/complexity
modifier using their clinical judgment when a functional assessment
tool is not used. Other commenters noted that physical and occupational
therapists typically use multiple measurement tools during the
evaluative process to inform clinical decision making; and, that
clinical judgment is needed to combine these results to determine a
functional limitation percentage. One commenter pointed out that the
IOM outpatient coverage guidelines recommend, but do not mandate, the
use of standardized measurement instruments and sought guidance as to
how the modifier scale would apply to a therapist who satisfies
documentation guidelines but does not use a standardized measurement
instrument that produces a global functional score.
Response: We appreciate commenters' concerns that our proposed
policy would require therapists to use a functional assessment tool to
determine the overall degree of functional impairment. This was not our
intent. However, when one of the four functional assessment instruments
is not utilized, we require as part of our IOM Documentation
Guidelines, that the therapist documents using objective measures the
beneficiary's physical functioning. We are also aware that use of one
of the four functional instruments is not widespread; and that physical
and occupational therapists typically use multiple objective tests and
measures to establish and compare a beneficiary's physical function and
progress throughout the therapy episode. As such, we recognize that a
therapist's judgment is critical in determining how to best measure
their patient's functional impairment and how to assimilate the various
necessary objective findings to ascertain a certain percentage of
function that can be translated to the Medicare severity scale. Our
requirements for documenting the beneficiary's functional status were
established prior to this data collection effort, and the primary
purpose for measuring functional impairment continues to aid the
therapist in furnishing therapy services. Our data collection system is
designed to collect data that is developed in the evaluative process
and assessed throughout the course of treatment, not to prescribe how
or what measures therapists use to assess functional impairment or
deliver services. Accordingly, it is acceptable for therapists to use
their professional judgment in the selection of the appropriate
modifier. Our IOM provisions already assert that when assessing the
level of functional impairment, the therapist uses his/her professional
judgments in addition to the objective measures and accepted
methodologies that are recognized in the

[[Page 68970]]

therapy community and in professional practice guidelines.
Because there will be many cases for which one single functional
measurement tool is not available or clinically inappropriate,
therapists can use their clinical judgment in the assignment of the
appropriate modifier. Therapists will need to document in the medical
record how they made the modifier selection so that the same process
can be followed at succeeding assessment intervals.
Comment: Many commenters evaluated our proposed 12-point scale as
if it was itself to be used as an assessment tool, rather than simply a
scale to report results of assessments. Some of these commenters also
warned us that the 12-point scale could not give us valid and reliable
data to use as an alternative payment system for therapy services
unless a single assessment tool were used.
Response: We appreciate the views expressed by the many commenters.
However, the 12-point scale was not intended to be used as an
assessment tool. Rather, it was intended to be used to express the
beneficiary's functional limitation in terms of a percentage of 100
total points so that there is a uniform scale for the degree of
functional limitation. In other words, the scale that is used to report
the degree of impairment would not affect the validity of the data. The
reported data are as valid and reliable as the assessment tool or
instrument (at times in combination with the therapist's judgment) that
was used to develop the score. We also realize that there are
limitations to the data that we will collect, in part because it is not
all derived from one consistent, assessment tool.
Comment: Commenters noted that pain is a clinical complexity that
is factored in when the beneficiary and therapist plan the course of
treatment, but is not factored in to the proposed scale.
Response: We believe that the commenter meant that pain is a
definite limiter of function and is difficult to measure and hard to
quantify. However, we believe that pain and the functional limitations
that it engenders can be captured by our severity scale. There are many
valid and reliable measures that a therapist can use to quantify the
functional limitations of painful conditions.
In response to the comments, we are adopting the following 7-point
severity/complexity scale to report the severity of the beneficiary's
functional impairment, which is based upon the scale developed as part
of the STATs project.

Table 23--Severity/Complexity Modifiers for CY 2013
------------------------------------------------------------------------
Impairment limitation
Modifier restriction
------------------------------------------------------------------------
CH........................................ 0 percent impaired, limited
or restricted.
CI........................................ At least 1 percent but less
than 20 percent impaired,
limited or restricted.
CJ........................................ At least 20 percent but less
than 40 percent impaired,
limited or restricted.
CK........................................ At least 40 percent but less
than 60 percent impaired,
limited or restricted.
CL........................................ At least 60 percent but less
than 80 percent impaired,
limited or restricted.
CM........................................ At least 80 percent but less
than 100 percent impaired,
limited or restricted.
CN........................................ 100 percent impaired,
limited or restricted.
------------------------------------------------------------------------

(4) Assessment Tools
In the proposed rule we noted that therapists frequently use
assessment tools to quantify beneficiary function. FOTO and NOMS are
two such assessment tools in the public domain that can be used to
determine a score for an assessment of beneficiary function. Therapists
could use the score produced by such instruments to select the
appropriate modifier for reporting the beneficiary's functional status.
Although we recommend the use of four of these functional assessment
instruments to determine beneficiary functional limitation in the IOM,
we did not propose to require the use of a particular functional
assessment tool to determine the severity/complexity modifier. We
explained our reasons for not doing so in the proposed rule saying
``Some tools are proprietary, and others in the public domain cannot be
modified to explicitly address this data collection project. Further,
this data collection effort spans several therapy disciplines.
Requiring a specific instrument could create burdens for therapists
that would have to be considered in light of any potential improvement
in data accuracy, consistency and appropriateness that such an
instrument would generate.'' We noted that we might reconsider this
decision once we have more experience with claims-based data collection
on beneficiary function associated with furnished therapy services. We
sought public comment on the use of assessment tools. In particular, we
were interested in feedback regarding the benefits and burdens
associated with use of a specific tool to assess beneficiary functional
limitations. We requested that those favoring a requirement to use a
specific tool provide information on the preferred tool and describe
why the tool is preferred.
The following is a summary of the comments we received regarding
the use of assessment tools and the benefits and burdens associated
with use of a specific tool to assess beneficiary functional
limitations.
Comment: Many commenters appreciated that we recognized the need to
use consistent and objective measurement tools to quantify beneficiary
function. All commenters who addressed assessment tools agreed that
there is not currently a single assessment tool that would meet the
diverse needs of beneficiaries receiving therapy services, and most did
not recommend requiring the use of a single tool. However, many
commenters stated we would be ineffective in reaching our data
collection goals without prescribing some rules about assessing
function; and thus suggested alternatives due to concerns of
consistency and validity of the data. MedPAC noted that collecting data
without a tool ``would generate large amounts of data, and not provide
clear information on the patients' limitations or functional status.''
MedPAC elaborated that variations among the assessment methods used by
therapists ``would potentially impede the utility of such data for
policymakers.''
Commenters found the following potential drawbacks to our proposal
to allow therapists to choose the assessment tool(s) (or use their
professional judgment) to determine the complexity/severity modifier.
Commenters stated that the current proposal would collect individual
level data that is not comparable among groups of beneficiaries or
providers. Commenters also stated that gathering data on beneficiary
condition, functional limitation, and progression necessitates the use
of one standardized collection tool by all therapists. One commenter
revealed that the same beneficiary could obtain widely distinct
modifier scores depending on the tool used. Further, a commenter
acknowledged that there are over 400 different measurement tools used
by physical therapists, many of which only measure one domain of
function. Additionally, another commenter urged us to provide more
instruction on how each tool interfaces with the complexity/severity
scale and provide crosswalks and guidance for each tool to promote
consistency in the data collected.

[[Page 68971]]

Commenters suggested the following alternatives to our proposal to
address the potential drawbacks they identified. Commenters supported
endorsing a small number of standardized tools with proven validity,
reliability, and responsiveness that would be distinct for each therapy
discipline. The American Speech-Language and Hearing Association (ASHA)
urged we adopt NOMS and a 7-point severity scale specifically for SLP
to recognize the distinctiveness of the discipline and record
meaningful outcomes for SLP beneficiaries. Many commenters supported
the use of FOTO stating that it measures a broad scope of conditions
reliably, results in a composite score, and creates little undue burden
to report. Those commenters also stated that FOTO is already the tool
of choice for their respective providers.
Two commenters suggested developing a list of approved tools for
specific beneficiary populations and settings. Another commenter
suggested assigning G-codes to specific assessment tools so that the
data could be compared. As a future alternative, a few commenters
proposed developing core items that could be used in any tool to
standardize data collection. MedPAC suggested that ``CMS consider
developing an instrument that collects the necessary information that
would allow Medicare to categorize beneficiaries by condition and
severity in order to pay appropriately'' and pointed to the ``Reason
for Therapy'' form used in the DOTPA study as a starting point, noting
that it is ``concise, easy to assess and document for clinicians, and
collects information on function and limitations across three therapy
disciplines.''
Response: We continue to recommend the use of four functional
assessment tools to determine beneficiaries' functional limitations. In
addition, when these tools are not used, we require the use of
objective measures to document the functional status of beneficiaries.
We continue to believe that no one tool currently meets the needs of
all three therapy disciplines; and, therefore, we are not requiring the
use of any one specific assessment tool, or even the use of any
assessment tool. We acknowledge that because of the use of the variety
and kinds of assessment tools and other measurement instruments,
including the use of a therapist's professional judgment, the value of
the data we collect under this system will have limitations. However,
we believe that the data we gather will assist us in taking a first
step towards an improved payment system.
We appreciate the comments providing information on the benefits of
using specific tools, such as NOMS and FOTO. However, at this time we
do not believe that they are sufficiently widely used to require the
use of one of these tools. In this final rule with comment period, we
are not requiring the use of a specific assessment tool. We are
continuing to encourage, but not require, the use of assessment tools
in the IOM.
We did, however, adopt G-codes and a modifier scale for SLP that
are consistent with NOMS so it is possible to move to a standardized
tool for SLP in the future. We will consider the possibility using
coding to identify the specific functional assessment tool used in
subsequent refinements. As noted above, therapists can also use their
professional judgment in determining the percentage of functional
limitations in conjunction with objective data from evaluations and
assessments and the subjective reports from beneficiaries.
(5) Reporting Projected Goal Status
We proposed that the therapist's projected goal for the
beneficiary's functional status at the end of treatment would be
reported on the first claim for services, periodically throughout an
episode of care, and at discharge from therapy.
The following is a summary of the comments regarding goal
reporting.
Comment: Of those commenting on goal status, most objected to the
collection of goal data, particularly during the first year of data
collection. Commenters noted that reporting on goals was not specified
as part of the claims-based data collection effort required by MCTRJCA.
Some stated that it would be a significant practice change to report
goal data, involving changes to medical documentation, electronic
health records, and billing processes. Commenters stated the
identification and reporting of goals raised several clinical issues,
such as the variability in goals among therapists, the need to change
goals over the course of treatment, and the fact that therapists often
set several goals (for example, short and long-term goals) for each
beneficiary. Others noted that using goal data to classify a group of
beneficiaries would be flawed because therapists create goals specific
to the individual. One commenter noted that if goals influence payment,
therapists could set the goal low or high to induce ongoing therapy and
therefore the data would not be useful. As a result of these factors,
many commenters believed data reporting on therapy goals would not
provide reliable and useful information. In addition, a number of
commenters stated that the proposal did not clearly express the intent
of collecting goal data and many commenters expressed concerns about
how we would use this data. Some commenters suggested that we clarify
that the functional status data would be used only to track a
beneficiary's progression rather than for any other purposes, such as
making comparisons across beneficiaries, therapists, or settings.
Several commenters expressed concern that the reporting of goals
implied an improvement standard and that care would be denied to
beneficiaries who improved slowly or not at all. Alternatively, one
commenter supported our proposal for reporting of a projected goal, as
well as periodic updates of the beneficiary status in the context of
that goal.
Response: We understand the commenters' concerns about the
complexity and intricacies of goal reporting. However, we currently
require in the Benefit Policy Manual (Chapter 15, section 220.1.2) that
long-term treatment goals be developed for the entire episode of care.
Further, we specify that the projected goals should be measurable and
pertain to identified functional limitations, and that these goals also
need to be documented in the medical record. Since many of these goal
requirements already exist, the additional work imposed by this
requirement would be for the therapist to establish the percentage of
functional limitation for projected for this goal at the end of the
therapy episode and translate the goal to the G-code/modifier scale. We
understand that the claims-based reporting is a change for therapists;
however, these adjustments in operations will yield meaningful
information on beneficiary functional status. We appreciate the
recommendation to delay goal reporting for a year, but we believe that
it is important to include goal data to gather a complete description
of a beneficiary's functional status.
At this time, we intend to use the projected goal to have an
understanding of therapists' ability to project the likely progress a
beneficiary will make. We ultimately may employ these data to help us
develop proposals to improve payment for therapy services, but do not
anticipate using the goal data for purposes of payment or coverage
decisions. In cases where the therapist does not expect improvement,
such as for those individuals receiving maintenance therapy, the
reported projected goal status will be the same as current status. We
appreciate that commenters raised concerns about

[[Page 68972]]

potential ambiguity of the description of the proposal on progress and
outcomes but, given as we have clarified in this final rule with
comment period, goal reporting does not establish an improvement
standard. In fact, it allows the therapist to state at the outset the
expectations. We understand there will be wide variability in goals.
Since these goals are used in beneficiary treatment, as well as for
reporting, we do not expect therapists to establish goals purely to
make themselves look better. Recognizing the limitations of the
collected goal data, we still believe it will be useful to us.
Therefore, we are finalizing our requirement for reporting of goal G-
codes on the claims form along with the related severity modifier for
that goal.
(6) Reporting Frequency
We proposed to require claims-based reporting in conjunction with
the initial service at the outset of a therapy episode, at established
intervals during treatment, and at discharge. As proposed, the number
of G-codes required on a particular claim would have varied from one to
four, depending on the circumstances. We provided the following (Table
24) graphic example of which codes would have been used for periodic
reporting. This example represents a therapy episode of care occurring
over an extended period, such as might be typical for a beneficiary
receiving therapy for the late effects of a stroke. We chose to use an
example with a much higher than average number of treatment days in
order to show a greater variety of reporting scenarios.
[GRAPHIC] [TIFF OMITTED] TR16NO12.003

Outset. As proposed, the first reporting of G-codes and
modifiers would occur when the outpatient therapy episode of care
begins. This would typically be the date of service when the therapist
furnishes the evaluation and develops the required plan of care (POC)
for the beneficiary. At the outset, the therapist would use the G-codes
and modifiers to report a current status and a projected goal for the
primary functional limitation. We indicated in the proposal that if a
secondary functional limitation would need to be reported, the same
information would be reported using G-codes and associated modifiers
for the secondary functional limitation.
The following is a summary of comments on the frequency of
reporting at the outset.
Comment: All commenters that addressed frequency of reporting
agreed that reporting should occur at the outset of the therapy episode
of care. Although commenters agreed with reporting at the outset, many
recommended removing the requirement to report the projected goal
status. (Comments on reporting projected goal status are discussed
above.)
Response: We are finalizing the requirement to report current
status and projected goal status at the outset of therapy.
Every 10 Treatment Days or 30 Calendar Days, Whichever Is
Less. We proposed to require reporting once every 10 treatment days or
at least once during each 30 calendar days, whichever time period is
shorter. As we explained in the proposed rule, the first treatment day
for purposes of reporting would be the day that the initial visit takes
place. The date the episode of care begins, typically at the
evaluation, even when the therapist does not furnish a separately
billable procedure in addition to the evaluation on this day,

[[Page 68973]]

would be considered treatment day one, effectively beginning the count
of treatment days or calendar days for the first reporting period.
A treatment day is defined as a calendar day in which treatment
occurs resulting in a billable service. Often a treatment day and a
therapy ``session'' (or ``visit'') may be the same, but the two terms
are not interchangeable. For example, a beneficiary might receive
certain services twice a day, although this is a rare clinical
scenario, these two different sessions (or visits) on the same day by
the same discipline are counted as one treatment day.
We explained that the proposal would require that on the claim for
service on or before the 10th treatment day or the 30th calendar day
after treatment day one, the therapist would only report the G-code and
the appropriate modifier to show the beneficiary's current functional
status at the end of this reporting period under the proposal. We added
that the next reporting period begins on the next treatment day and
that the time period between the end of one reporting period and the
next treatment day does not count towards the 30-calendar day period.
On the claim for services furnished on this date, the therapist would
report both the G-code and modifier showing the current functional
status at this time along with the G-code and modifier reflecting the
projected goal that was identified at the outset of the therapy
episode. This process would continue until the beneficiary concludes
the course of therapy treatment.
Further, we proposed that on a claim for a service that does not
require specific reporting of a G-code with modifier (that is, on a
claim for therapy services within the time period for which reporting
is not required), GXXX7 would be used. By using this code, the
therapist would be confirming that the claim does not require specific
functional reporting. This is the only G-code that we proposed to be
reported without a severity modifier.
As we noted in the proposed rule, we proposed the 10/30 frequency
of reporting to be consistent with our existing timing requirements for
progress reports. These timing requirements are included in the
Documentation Requirements for Therapy Services (see Pub. 100-02,
Chapter 15, Section 220.3, Subsection D). By making these reporting
timeframes consistent with Medicare's other requirements, therapists
who are already furnishing therapy services to Medicare outpatients
would have a familiar framework for successfully adopting our new
reporting requirement. In addition to reflecting the Medicare required
documentation for progress reports, we believe that this simplifies the
process and minimizes the new burden on therapists since many therapy
episodes would be completed by the 10th treatment day. In 2008, the
average number of days in a therapy episode was 9 treatment days for
SLP, 11 treatment days for PT, and 12 treatment days for OT. Under the
proposal, when reporting on two functional limitations, the therapist
would report the G-codes and modifiers for the second condition in the
manner described above. In other words, at the end of the reporting
period as proposed, two G-codes would be reported to show current
functional status--one for the primary (GXXX1) and one for the
secondary (GXXX4) limitation. Similarly as proposed, at the beginning
of the reporting period four G-codes would be reported. GXXX1 and GXXX4
would be used to report current status for the primary and secondary
functional limitations, respectively; and, GXXX2 and GXXX5 would be
used to report the goal status for the primary and secondary functional
limitations, respectively.
We noted that the proposal required that the same reporting periods
be used for both the primary and secondary functional limitation. We
added that the therapist can accomplish this by starting them at the
same time or if the secondary functional limitation is added at some
point in treatment, the primary functional limitation's reporting
period must be re-started by reporting GXXX1 and GXXX2 at the same time
the new secondary functional limitation is added using GXXX4 and GXXX5.
Further, for those therapy treatment episodes lasting longer
periods of time, the periodic reporting of the G-codes and associated
modifiers would reflect any progress that the beneficiary made toward
the identified goal. In summary, we proposed to require the reporting
of G-codes and modifiers at episode outset (evaluation or initial
visit), and once every 10th treatment day or at least every 30 calendar
days, whichever time period is less, and at discharge.
We noted that we believed it was important that the requirements
for this reporting system be consistent with the requirements for
documenting any progress in the medical record as specified in our
manual. Given the current proposal for claims-based data collection, we
believe it is an appropriate time to reassess the manual requirements.
We sought comment on whether it would be appropriate to modify the
periodicity of the progress report requirement in the IOM to one based
solely on the number of treatment days, such as six or ten. We noted
that if a timing modification was made for progress reporting, a
corresponding change would be made in the functional reporting
interval.
The following is a summary of the comments we received on our
proposal to require reporting every 10 treatment days or 30 calendar
days, whichever is less, and whether it would be appropriate to modify
the progress report requirement in the IOM to one based solely on the
number of treatment days, such as six or ten, and the clinical impact
of such a change.
Comment: Although many commenters appreciated our effort to align
the claims-based reporting with existing requirements for a progress
report, several commenters requested that we recognize the significant
time burden of the new reporting frequency and that we ameliorate some
of the burden with a simplification of the existing manual requirement.
Commenters in favor of reporting every 10 treatment days explained that
using treatment days as compared to calendar days is more easily
programmed into software systems and in accord with certain therapist's
billing practices. A couple of other commenters supported reporting
every 30 calendar days as this accommodates therapists working in
settings where claims are required to be submitted on a monthly basis,
such as hospitals, rehabilitation agencies and SNFs. Several commenters
objected to the periodic reporting and suggested that reporting only at
the outset and at discharge of therapy would be sufficient to capture a
beneficiary's functional progression. A few of those commenters were
okay with the proposed 10 treatment day or 30 calendar day reporting
timeframe, if periodic claims reporting is necessary.
A few commenters urged us to eliminate the requirement for
functional status reporting at the visit subsequent to the progress
report because a beneficiary's status probably would remain the same
unless there is a significant gap between visits.
We received many comments concerning the reporting of GXXX7; which
we proposed to be used to indicate that the therapist confirms
functional reporting not required. These commenters stated that the
reporting of GXXX7, which is required for claims with dates of services
when a functional status measure is not collected, would be unnecessary
and burdensome, especially for daily billers. They urged us to require
reporting only when a functional status is required to be reported.
Further commenters stated

[[Page 68974]]

that there was no purpose for this G-code.
Response: Based on the public comments, we are making several
changes. We believe that reporting every 10 treatment days would be
less burdensome for therapists than the proposed 10 treatment days/30
calendar days. We believe a 10\-\treatment day reporting period is
straightforward for therapists to track, allows for better monitoring
of changes in functional status, and is more easily adopted within our
current claims processing systems. Therefore, we are finalizing the
requirement that G-codes and associated modifiers are reported at least
once every 10 treatment days and we will modify the IOM to establish
the same timing requirement for progress reports. By making this
change, we no longer need the therapist to report functional status at
the visit subsequent to the end of a reporting period to signal the
beginning of a new reporting period. So in response to comments, we
have eliminated the requirement to report data at the start of a new
reporting period.
After assessing the comments, we agree that reporting a G-code
(GXXX7) to tell us that no reporting is required would not provide
meaningful data and would pose an additional burden for therapists and
therapy providers. When proposed, we believed it would be convenient
for therapists to use the code to indicate that this was a claim for
therapy services that did not require the functional reporting because
it would assist them in complying with the reporting requirements and
would assist us in enforcing them. When we reassessed the issue based
on feedback from commenters, it was clear that the ``no report due''
code would not aid us in enforcing the requirements as we would still
have to verify that claims with the proposed GXXX7 were in fact claims
that did not require reporting. Since commenters pointed out that not
only would it not assist them, but would in fact burden them, we have
decided not to include this code. Accordingly, we are also modifying
our proposal to remove the requirement to report a ``no report due''
code on claims when functional reporting is not due, such as between
the first and the tenth day of service. We expect these changes will
significantly reduce the frequency of required reporting during a
therapy episode and believe they will appropriately simplify the
claims-based reporting system.
Discharge. In addition, we proposed to require reporting
of the G-code/modifier functional data for the current status and for
the goal at the conclusion of treatment so that we have a complete set
of data for the therapy episode of care. Requiring the reporting at
discharge mirrors the IOM requirement of a discharge note or summary.
This set of data would reveal any functional progress or improvement
the beneficiary made toward the projected therapy goal during the
entire therapy episode. Specifically, information on the beneficiary's
functional status at the time of discharge shows whether the
beneficiary made progress towards or met the projected therapy goal. As
we noted in the proposed rule, the imposition of this reporting
requirement does not justify scheduling an additional and perhaps
medically unnecessary final session in order to measure the
beneficiary's function for the sole purpose of reporting.
Although collection of discharge data is important in achieving our
goals, we recognize that data on functional status at the time therapy
concludes is sometimes likely to be incomplete for some beneficiaries
receiving outpatient therapy services. The DOTPA project has found this
to be true. There are various reasons as to why the therapist would not
be able to report functional status using G-codes and modifiers at the
time therapy ends. Sometimes, beneficiaries may discontinue therapy
without alerting their therapist of their intention to do so; simply
because they feel better; they can no longer fit therapy into their
life, work, or social schedules; a physician told them further therapy
was not necessary; or their transportation is unavailable. Whatever the
reason, there would be situations where the therapy ends without the
planned discharge visit taking place. In these situations, we said that
we would not require the reporting at discharge. However, we encourage
therapists to include discharge reporting whenever possible on the
final therapy claim for services.
Since the therapist is typically reassessing the beneficiary during
the therapy episode, the data critical to the severity/complexity of
the functional measure may be available even when the final therapy
session does not occur. In these instances, the G-codes and modifiers
appropriate to discharge should be reported when the final claim for
therapy services has not already been submitted.
We sought feedback on how often the therapy community finds that
beneficiaries discontinue therapy without the therapist knowing in
advance that it is the last treatment session and other situations in
which the discharge data would not be available for reporting.
The following is a summary of the comments we received regarding
the proposal to require reporting of the G-code/modifier functional
data at the conclusion of treatment so that we have a complete set of
data for the therapy episode of care.
Comment: In addition to outset reporting, a majority of commenters
supported claims-based reporting at discharge of the therapy episode of
care. With regard to the number of beneficiaries who stop therapy
services without notice, the responses varied from about 12 percent for
beneficiaries being treated for a spinal cord injury to 26 percent of
patients with orthopedic conditions in a large system of outpatient
therapy clinics. Many commenters who supported discharge reporting
recommended that if the beneficiary misses his or her last visit, the
therapist should be exempt from reporting the functional status at
discharge. Another commenter believed, however, that having a separate
G-code in each set to report discharge status is unnecessary; the
commenter further stated that the last reported current status and goal
status G-codes could be used to represent the end of treatment.
Response: Although we recognize that there may be some challenges
with discharge reporting, this information is important for our
purposes to complete the data set for each therapy episode; and, thus,
we are maintaining the requirement. We do not agree with the commenter
who suggested that we could simply use the last reported current status
to represent the status at discharge since this may not be an accurate
representation of the beneficiary's status at the time of discharge.
However, in those cases where this functional status is derived from a
patient survey, for example, FOTO, Am-PAC or OPTIMAL, and the survey is
routinely sent to the patient who misses his/her final treatment, the
therapist should report this data once subsequently gained, on the
final bill for services unless the bill for the last treatment day has
already been submitted. There are instances where not reporting the
discharge status would make it impossible for us to distinguish the
start of the reporting for a new or subsequently-reported functional
limitation or the treatment for a new therapy episode in the data. We
are finalizing our proposal to require discharge reporting (except in
cases where therapy services are discontinued by the beneficiary prior
to the planned discharge visit) using the discharge G-code, along with
the goal status G-code, to indicate the end of a therapy episode or to
signal the end of reporting on one

[[Page 68975]]

functional limitation, while further therapy is necessary for another
one.
Significant Change in Beneficiary Condition. We proposed
that, in addition to reporting at the intervals discussed above, the G-
code/modifier measures would be required to be reported when a formal
and medically necessary re-evaluation of the beneficiary results in an
alteration of the goals in the beneficiary's POC. This could result
from new clinical findings, an added comorbidity, or a failure to
respond to treatment. We noted that this reporting affords the
therapist the opportunity to explain a beneficiary's failure to
progress toward the initially established goal(s) and permits either
the revision of the severity status of the existing goal or the
establishment of a new goal or goals. Under the proposal, the therapist
would be required to begin a new reporting period when submitting a
claim containing a CPT code for an evaluation or a re-evaluation. This
functional reporting of G-codes, along with the associated modifiers,
could be used to show an increase in the severity of functional
limitations; or, they could be used to reflect the severity of newly
identified functional limitations as delineated in the revised plan of
care.
The following is a summary of the comments we received regarding
the proposal that in addition to reporting at the intervals discussed
above, the G-code and related modifier would be required to be reported
when a formal and medically necessary re-evaluation of the beneficiary
results in an alteration of the goals in the beneficiary's POC.
Comment: One commenter recommended that instead of requiring
periodic reporting throughout a therapy episode that we require it only
at the time of a re-evaluation. This commenter believed that capturing
the functional information using G-codes within the treatment episode
is burdensome and reporting at the time of the progress report would
put unnecessary emphasis on a therapist capturing a change in a
beneficiary's assessment.
Response: We did not receive comments objecting to claims-based
reporting at the time that a re-evaluation code is billed for PT or OT
or a subsequent or second evaluation code is billed for SLP. Therefore,
we are finalizing the requirement for functional reporting when a
formal and medically necessary re-evaluation, for PT or OT, or a second
or repeat SLP evaluation of the beneficiary is furnished. We are
requiring claims-based reporting in conjunction with the evaluation at
the outset of therapy, on or before each 10th treatment day throughout
therapy, and at therapy discharge (except in cases where therapy
services are unexpectedly discontinued by the beneficiary prior to the
planned discharge visit and the necessary information is not available)
or to signal the end of reporting on one functional limitation. On a
claim, two G-codes would be required depending on the reporting
interval. Table 25 shows a revised example of which codes are used for
specified reporting under our final policy. We should note that this
example utilizes the mobility functional limitation G-codes, G8978-
G8980 for ``walking and moving around'' and the ``Other or Primary'' G-
codes, G8990-G8992 and is for illustrative purposes only. This table
not only shows how the final reporting works but by comparing it to the
table showing the same details for reporting under the proposed policy
one can see how much less reporting is required. Any of the other
functional limitation G-code sets listed in Table 21 would also be
applicable here.

[[Page 68976]]

[GRAPHIC] [TIFF OMITTED] TR16NO12.004

In summary, we maintain that claims-based reporting should occur at
the outset of therapy episode, on or before every 10 treatment days
throughout the course of therapy, and at the time of discharge from
therapy. Additionally, functional reporting is also required at the
time the beneficiary's condition changes significantly enough to
clinically warrant a re-evaluation such that a HCPCS/CPT code for a re-
evaluation or a repeat evaluation is billed.
(7) Documentation
We proposed to require that documentation of the information used
for reporting under this system must be included in the beneficiary's
medical record. As proposed, the therapist would need to track in the
medical record the G-codes and the corresponding severity modifiers
that were used to report the status of the functional limitations at
the time reporting was required. Including G-codes and related
modifiers in the medical record creates an auditable record, assists in
improving the quality of data CMS collects, and allows therapists to
track assessment and functional information. In the proposed rule, we
provided the example of a situation where the therapist selects the
mobility functional limitation of ``walking and moving'' as the primary
functional limitation and determines that at therapy outset the
beneficiary has a 60 percent limitation and sets the goal to reduce the
limitation to 5 percent. We noted that the therapist uses GXXX1-XH to
report the current status of the functional impairment and GXXX2-XB to
report the goal. Additionally, we said that the therapist should note
in the beneficiary's medical record that the functional limitation is
``walking and moving'' and document the G-codes and severity modifiers
used to report this functional limitation on the claim for therapy
services.
The following is a summary of comments we received concerning our
documentation requirements.
Comment: Some commenters suggested that the proposal would impose
significant additional documentation and claims reporting requirements.
Further, one commenter objected to the requirement to include
information in the medical record on the G-codes and modifiers used for
billing as it would be highly unusual and time intensive to do so.
Another commenter supported our proposal, agreeing that documentation
of the information used for reporting under this system must be
included in the beneficiary's medical record.
Response: We disagree with the commenters' statements that the
required documentation is overly burdensome. In fact, by maintaining
the G-code descriptor and related modifier in the medical record,
therapists may find it easier to link treatment and reporting.
Additionally, to enforce the reporting requirements on the claims,
documentation in the medical record is required. In cases where the
therapist uses other information in addition to certain measurement
tools in order to assess functional impairment, he or she would also
want to document the relevant information used to determine the overall
percentage of functional limitation to select the severity modifier. In
instances where it becomes necessary for a different therapist to
furnish the therapy services, the substitute therapist can look in the
beneficiary's medical record to note previous G-codes and related
modifiers

[[Page 68977]]

reported. We are finalizing the proposed requirement that the G-codes
and related modifiers must be documented in the beneficiary's medical
record.
(8) Claims Requirements
In the proposed rule, we noted that except for the addition of the
proposed G-codes and the associated modifiers, nothing in this proposal
would modify other existing requirements for submission of therapy
claims. We noted in the proposed rule that, in addition to the new G-
codes and modifiers used for the claims-based data collection system,
the therapy modifiers--GO, GP, and GN, would still be required on
claims to indicate that the therapy services are furnished under an OT,
PT, or SLP plan of care, respectively; and, therefore, we are
designating these nonpayable G-codes as ``always therapy.'' We noted in
the proposed rule that institutional claims for therapy services would
require that a charge be included on the service line for each one of
these G-codes used in the required functional reporting. We also noted
that this charge would not be used for payment purposes and would not
affect processing. Further, we noted claims for professional services
do not require that a charge be included for these nonpayable G-codes,
but that reporting a charge for the nonpayable G-codes would not affect
claims processing. To illustrate this policy, for each nonpayable G-
code on the claim, that line of service would also need to contain one
of the severity modifiers, the corresponding GO, GP, or GN therapy
modifier to indicate the respective OT, PT, or SLP therapy discipline
and related POC; and the date of service it references. For each line
on the institutional claim submitted by hospitals, SNFs, rehabilitation
agencies, CORFs and HHAs, a charge of one penny, $0.01, can be added.
For each line on the professional claim submitted by private practice
therapists and physician/NPPs, a charge of $0.00 can be added. We
believe that many therapists submitting professional claims are already
submitting nonpayable G-code quality measures under the PQRS and will
be familiar with the parameters of nonpayable G-codes on claims for
Medicare services.
Finally, we noted that Medicare does not process claims that do not
include a billable service. As a result, reporting under this claims-
based data collection system would need to be included on the same
claim as a furnished service that Medicare covers.
We did not receive any comments specifically on the claims
requirements so we are finalizing these as proposed.
(9) Implementation Date
In accordance with section 3005(g) of the MCTRJCA, we proposed to
implement these data reporting requirements on January 1, 2013. We
recognized that with electronic health records and electronic claims
submission, therapists might encounter difficulty in including this new
data on claims. To accommodate those that may experience operational or
other difficulties with moving to this new reporting system and to
assure smooth transition, we proposed a testing period from January 1,
2013 until July 1, 2013. We noted that we would expect that all those
billing for outpatient therapy services would take advantage of this
testing period and would begin attempting to report the new G-codes and
modifiers as close to January 1, 2013, as possible, in preparation for
required reporting beginning on July 1, 2013. Taking advantage of this
testing period would help to minimize potential problems after July 1,
2013, when claims without the appropriate G-codes and modifiers would
be returned unpaid.
The following is a summary of comments we received concerning our
implementation of the new system on January 1, 2013 with enforcement
beginning after July 1, 2013.
Comment: Given the statutory deadline, most commenters acknowledged
that the new program needed to be implemented on January 1, 2013. Many
commenters supported the proposed testing period. They indicated that a
testing period was needed to train therapists, change documentation
practices, modify electronic health records systems, educate billing
contractors, and adjust billing systems. However, numerous commenters
expressed concern that 6 months is an insufficient and unrealistic
amount of time to transition to the new data reporting requirements.
Commenters requested that we recognize the significant time and
financial burden of the new reporting requirement and that we alleviate
these concerns with delayed enforcement. Commenters requested a longer
period to make software adjustments and educate therapists on the new
reporting and frequency of documentation requirements. Further,
commenters believed that we, in the limited time period, did not
recognize the potential capital changes that would be necessary or
allow for the typical process for acquiring funds. Commenters proposed
various alternatives, which included extending the testing period to 9
or 12 months. A few suggested that we delay implementation of the
mandate until the completion of the DOTPA study. As an alternative to
nationwide data reporting, a few commenters suggested we consider
testing the requirement under a pilot program in a small sample of the
country, allowing us to analyze preliminary data and draw conclusions
regarding the effectiveness of reporting through non-payable G-codes
and modifiers before it is implemented nationwide.
Response: We are required by law to implement the claims-based data
collection strategy on January 1, 2013. Our contractors and systems
will be able to accept and process claims for therapy services with
functional information at this time. We recognize that therapists may
need time to adjust their claims processing to accommodate these
additional codes but, we believe the necessary changes can be
accomplished well within the 8 months between the time this final rule
with comment period is issued and the end of the testing period. We do
not believe a small pilot as suggested by some commenters would meet
the statutory requirement to implement as of January 1, 2013 a claims-
based data collection strategy to assist in reforming outpatient
therapy services. Nor would it meet our needs to gather data to assist
in developing potential alternative payment systems for therapy
services. We are finalizing an implementation date of January 1, 2013
with a 6-month testing period such that claims that do not comply with
the data reporting requirements will be returned beginning July 1,
2013.
(10) Compliance Required as a Condition for Payment and Regulatory
Changes
To implement the claims-based data collection system required by
MCTRJCA and described above, we proposed to amend the regulations
establishing the conditions for payment governing outpatient and CORF
PT, OT, and SLP services to add a requirement that the claims include
information on beneficiary functional limitations. In addition, we
proposed to amend the POC requirements set forth in the regulations for
outpatient therapy services and CORFs to require that the therapy
goals, which must be included in the POC, are consistent with the
beneficiary's functional limitations and goals reported on claims for
services.
Specifically, we proposed to amend the regulations for outpatient
OT, PT, and SLP (Sec. 410.59, Sec. 410.60, and Sec. 410.62,
respectively) by adding a new paragraph (a)(4) to require that claims
submitted for services furnished contain

[[Page 68978]]

the required information on beneficiary functional limitations.
We also proposed to amend the POC requirements set forth at Sec.
410.61(c) to require that the therapy goals, which must be included in
the treatment plan, must be consistent with those reported on claims
for services. This requirement is in addition to those already existing
conditions for the POC.
To achieve consistency in the provision of PT, OT, and SLP services
across therapy benefits, we proposed to amend Sec. 410.105 to include
the same requirements for these services furnished in CORFs. These
proposed revisions would require that the goals specified in the
treatment plan be consistent with the beneficiary functional
limitations and goals reported on claims for services and that claims
submitted for services furnished contain specified information on
beneficiary functional limitations, respectively. The requirements do
not apply to respiratory therapy services.
We did not receive any comments on the proposed regulatory changes
and are finalizing the changes as proposed.
(11) Consulting With Relevant Stakeholders
Section 3005(g) of the MCTRJCA requires us to consult with relevant
stakeholders as we propose and implement this reporting system. In the
CY 2013 PFS proposed rule, we indicated that we are meeting this
requirement through the publication of this proposal and specifically
by soliciting public comment on the various aspects of our proposal. In
addition, we noted that we would meet with key stakeholders and discuss
this issue in Open Door Forums over the course of the summer.
During the CY 2013 proposed rule comment period, we met with the
various therapy professional associations and provider groups in order
to solicit their comments on the various aspects of this proposal. At
the CMS Physicians, Nurses & Allied Health Professionals Open Door
Forum on July 17, 2012, we discussed the provisions of the proposed
rule, including these requirements. We also discussed this proposed
rule at the CMS Hospital & Hospital Quality Open Door Forum on July 18,
2012. In developing the final rule, we took into consideration many of
the critical issues that were raised by the various stakeholders in
these meetings and Forums. Accordingly, we believe we have met our
obligation to consult with relevant stakeholders in proposing and
implementing the required claims-based data collection strategy, and in
developing our final policies, we have taken into consideration the
various needs of stakeholders affected by this effort.

H. Primary Care and Care Coordination

In recent years, we have recognized primary care and care
coordination as critical components in achieving better care for
individuals, better health for individuals, and reduced expenditure
growth. Accordingly, we have prioritized the development and
implementation of a series of initiatives designed to improve payment
for, and encourage long-term investment in, primary care and care
management services. These initiatives include the following programs
and demonstrations:
The Medicare Shared Savings Program (described in
``Medicare Program; Medicare Shared Savings Program: Accountable Care
Organizations; Final Rule'' which appeared in the Federal Register on
November 2, 2011 (76 FR 67802)).
++ The testing of the Pioneer ACO model, designed for experienced
health care organizations (described on the Center for Medicare and
Medicaid Innovation's (Innovation Center's) Web site at
innovations.cms.gov/initiatives/ACO/Pioneer/index.html).
++ The testing of the Advance Payment ACO model, designed to
support organizations participating in the Medicare Shared Savings
Program (described on the Innovation Center's Web site at
innovations.cms.gov/initiatives/ACO/Advance-Payment/index.html).
The Primary Care Incentive Payment (PCIP) Program
(described on the CMS Web site at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/Downloads/PCIP-2011-Payments.pdf).
The patient-centered medical home model in the Multi-payer
Advanced Primary Care Practice (MAPCP) Demonstration designed to test
whether the quality and coordination of health care services are
improved by making advanced primary care practices more broadly
available (described on the CMS Web site at www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf).
The Federally Qualified Health Center (FQHC) Advanced
Primary Care Practice demonstration (described on the CMS Web site at
www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf and the Innovation Center's Web site
at innovations.cms.gov/initiatives/FQHCs/index.html).
The Comprehensive Primary Care (CPC) initiative (described
on the Innovation Center's Web site at innovations.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html). The CPC initiative
is a multi-payer initiative fostering collaboration between public and
private health care payers to strengthen primary care in certain
markets across the country.
In coordination with these initiatives, we also continue to explore
other potential refinements to the PFS that would appropriately value
primary care and care coordination within Medicare's statutory
structure for fee-for-service physician payment and quality reporting.
We believe that improvements in payment for primary care and
recognizing care coordination initiatives are particularly important as
EHR technology diffuses and improves the ability of physicians and
other providers of health care to work together to improve patient
care. We view these potential refinements to the PFS as part of a
broader strategy that relies on input and information gathered from the
initiatives described above, research and demonstrations from other
public and private stakeholders, the work of all parties involved in
the potentially misvalued code initiative, and from the public at
large.
In the CY 2012 PFS proposed rule (76 FR 42793 through 42794), we
initiated a discussion to gather information about how primary care
services have evolved to focus on preventing and managing chronic
conditions. We also proposed to review evaluation and management (E/M)
services as potentially misvalued and suggested that the American
Medical Association Relative (Value) Update Committee (AMA RUC) might
consider changes in the practice of chronic conditions management and
care coordination as key reason for undertaking this review. In the CY
2012 PFS final rule with comment period (76 FR 73062 through 73065), we
did not finalize our proposal to review E/M codes due to consensus from
an overwhelming majority of commenters that a review of E/M services
using our current processes could not appropriately value the evolving
practice of chronic care coordination at the time, and therefore, would
not accomplish the agency's goal of paying appropriately for primary
care services. We stated that we would continue to consider ongoing
research projects, demonstrations, and the numerous policy alternatives
suggested by commenters. In addition, in the CY 2012 PFS proposed rule
(76 FR 42917 through 42920), we initiated a public

[[Page 68979]]

discussion regarding payments for post-discharge care management
services. We sought broad public comment on how to further improve care
management for a beneficiary's transition from the hospital to the
community setting within the existing statutory structure for physician
payment and quality reporting. We specifically discussed how post
discharge care management services are coded and valued under the
current E/M coding structure, and we requested public comment. The
physician community responded that comprehensive care coordination
services are not adequately represented in the descriptions of, or
payments for, office/outpatient E/M services. The American Medical
Association (AMA) and the American Academy of Family Physicians (AAFP)
created workgroups to consider new options for coding and payment for
primary care services. The AAFP Task Force recommended that CMS create
new primary care E/M codes and pay separately for non-face-to-face E/M
Current Procedural Terminology (CPT) codes. (A summary of these
recommendations is available at www.aafp.org/online/en/home/publications/news/news-now/inside-aafp/20120314cmsrecommendations.html.) The AMA workgroup, Chronic Care
Coordination Workgroup (C3W), has and continues to develop codes to
describe care transition and care coordination activities. (Several
workgroup meeting minutes and other related items are available at
www.ama-assn.org/ama/pub/physician-resources/solutions-managing-your-practice/coding-billing-insurance/medicare/care-coordination.page.)
Since the publication of the proposed rule, the C3W has completed
development of two new transitional care management (TCM) codes. These
new codes are:
99495 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of at least moderate complexity during
the service period.
++ Face-to-face visit, within 14 calendar days of discharge.
99496 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of high complexity during the service
period.
++ Face-to-face visit, within 7 calendar days of discharge.
We discuss these codes in greater detail below.
Under current PFS policy, care coordination is a component of E/M
services which are generally reported using E/M CPT codes. The pre- and
post-encounter non-face-to-face care management work is included in
calculating the total work for the typical E/M services, and the total
work for the typical service is used to develop RVUs for the E/M
services. In the CY 2012 PFS proposed rule, we highlighted some of the
E/M services that include substantial care coordination work.
Specifically, we noted that the vignettes that describe a typical
service for mid-level office/outpatient services (CPT codes 99203 and
99213) include furnishing care coordination, communication, and other
necessary care management related to the office visit in the post-
service work. We also highlighted vignettes that describe a typical
service for hospital discharge day management (CPT codes 99238 and
99239), which include furnishing care coordination, communication, and
other necessary management related to the hospitalization in the post-
service work.
The payment for non-face-to-face care management services is
bundled into the payment for face-to-face E/M visits. Moreover,
Medicare does not pay for services that are furnished to parties other
than the beneficiary and which Medicare does not cover, for example,
communication with caregivers. Accordingly, we do not pay separately
for CPT codes for telephone calls, medical team conferences, prolonged
services without patient contact, or anticoagulation management
services.
However, the physician community continues to tell us that the care
coordination included in many of the E/M services, such as office
visits, does not adequately describe the non-face-to-face care
management work involved in primary care. Because the current E/M
office/outpatient visit CPT codes were designed to support all office
visits and reflect an overall orientation toward episodic treatment, we
agree that these E/M codes may not reflect all the services and
resources required to furnish comprehensive, coordinated care
management for certain categories of beneficiaries such as those who
are returning to a community setting following discharge from a
hospital or SNF stay. As part of our multi-year strategy to recognize
and support primary care and care management, we proposed in the CY
2013 PFS proposed rule (77 FR 44776-44780) to create a HCPCS G code to
describe care management involving the transition of a beneficiary from
care furnished by a treating physician during a hospital stay
(inpatient, outpatient observation services, or outpatient partial
hospitalization), SNF stay, or community mental health center (CMHC)
partial hospitalization program to care furnished by the beneficiary's
primary physician in the community. We also solicited comment on how
care furnished in these settings might be incorporated into the current
fee-for-service structure of the PFS.
Specifically, this HCPCS G code would describe all non-face-to-face
services related to the TCM furnished by the community physician or
qualified nonphysician practitioner within 30 calendar days following
the date of discharge from an inpatient acute care hospital,
psychiatric hospital, long-term care hospital, skilled nursing
facility, and inpatient rehabilitation facility; hospital outpatient
for observation services or partial hospitalization services; and a
partial hospitalization program at a CMHC to community-based care. The
post-discharge TCM service includes non-face-to-face care management
services furnished by clinical staff member(s) or office-based case
manager(s) under the supervision of the community physician or
qualified nonphysician practitioner. We based the concept of this
proposal, in part, on our policy for care plan oversight services. We
currently pay physicians for the non-face-to-face care plan oversight
services furnished for beneficiaries under care of home health agencies
or hospices. These beneficiaries require complex and multidisciplinary
care modalities that involve: Regular physician development and/or
revision of care plans, subsequent reports of patient status, review of
laboratory and other studies, communication with other health
professionals not employed in the same practice who are involved in the
patient's care, integration of new information into the care plan, and/
or adjustment of medical therapy. Physicians furnishing these services
bill HCPCS codes G0181 or G0182 (See the Medicare benefit manual, 100-
02, Chapter 15, Section 30 for detailed description of these services.)
For CY 2013, we proposed to create a new code to describe post-
discharge TCM services. This service was proposed to include:
Assuming responsibility for the beneficiary's care without
a gap.
++ Obtaining and reviewing the discharge summary.
++ Reviewing diagnostic tests and treatments.

[[Page 68980]]

++ Updating of the patient's medical record based on a discharge
summary to incorporate changes in health conditions and on-going
treatments related to the hospital or nursing home stay within 14
business days of the discharge.
Establishing or adjusting a plan of care to reflect
required and indicated elements, particularly in light of the services
furnished during the stay at the specified facility and to reflect
result of communication with beneficiary.
++ An assessment of the patient's health status, medical needs,
functional status, pain control, and psychosocial needs following the
discharge.
Communication (direct contact, telephone, electronic) with
the beneficiary and/or caregiver, including education of patient and/or
caregiver within 2 business days of discharge based on a review of the
discharge summary and other available information such as diagnostic
test results, including each of the following tasks:
++ An assessment of the patient's or caregiver's understanding of
the medication regimen as well as education to reconcile the medication
regimen differences between the pre- and post-hospital, CMHC, or SNF
stay.
++ Education of the patient or caregiver regarding the on-going
care plan and the potential complications that should be anticipated
and how they should be addressed if they arise.
++ Assessment of the need for and assistance in establishing or re-
establishing necessary home and community based resources.
++ Addressing the patient's medical and psychosocial issues, and
medication reconciliation and management.
When indicated for a specific patient, the post-discharge
transitional care service was also proposed to include:
Communication with other health care professionals who
will (re)assume care of the beneficiary, education of patient, family,
guardian, and/or caregiver.
Assessment of the need for and assistance in coordinating
follow up visits with health care providers and other necessary
services in the community.
Establishment or reestablishment of needed community
resources.
Assistance in scheduling any required follow-up with
community providers and services.
The proposed post-discharge transitional care HCPCS G code was
described as follows:
GXXX1 Post-discharge transitional care management with the
following required elements:
Communication (direct contact, telephone, electronic) with
the patient or caregiver within 2 business days of discharge.
Medical decision making of moderate or high complexity
during the service period.
To be eligible to bill the service, physicians or
qualified nonphysician practitioners must have had a face-to-face E/M
visit with the patient in the 30 days prior to the transition in care
or within 14 business days following the transition in care.
The post-discharge transitional care services HCPCS G code we
proposed would be used by the community physician or qualified
nonphysician practitioner to report the services furnished in the
community to ensure the coordination and continuity of care for
patients discharged from a hospital (inpatient stay, outpatient
observation, or outpatient partial hospitalization), SNF stay, or CMHC.
The post-discharge transitional care service would parallel the
discharge day management service for the community physician or
qualified nonphysician practitioner and complement the E/M office/
outpatient visit CPT codes.
We proposed that the post-discharge transitional care service HCPCS
G code would be used to report physician or qualifying nonphysician
practitioner services for a patient whose medical and/or psychosocial
problems requires moderate or high complexity medical decision-making
during transitions in care from hospital (inpatient stay, outpatient
observation, and partial hospitalization), SNF stay, or CMHC settings
to community-based care. The Evaluation and Management Guidelines
define decision-making of moderate and high medical complexity. In
general, moderate complexity medical decision-making includes multiple
diagnoses or management options, moderate complexity and amount of data
to be reviewed, a moderate amount and/or complexity of data to be
reviewed; and a moderate risk of significant complications, morbidity,
and/or mortality. High complexity decision-making includes an extensive
number of diagnoses or management options, an extensive amount and/or
complexity of data to be reviewed, and high risk of significant
complications, morbidity, and/or mortality (See Evaluation and
Management Services Guide, Centers for Medicare & Medicaid Services,
December 2010.) We proposed that the post-discharge transitional care
HCPCS code (GXXX1) would be payable only once in the 30 days following
a discharge, per patient per discharge, to a single community physician
or qualified nonphysician practitioner (or group practice) who assumes
responsibility for the patient's post-discharge TCM services. The
service would be billable only at 30 days post discharge or thereafter.
The post-discharge TCM service would be distinct from services
furnished by the discharging physician or qualified nonphysician
practitioner reporting CPT codes 99238 (Hospital discharge day
management, 30 minutes or less); 99239 (Hospital discharge day
management, more than 30 minutes); 99217 (Observation care discharge
day management); or Observation or Inpatient Care services, CPT codes
99234 -99236; as appropriate.
We proposed to pay only one claim for the post-discharge
transitional care GXXX1 billed per beneficiary at the conclusion of the
30 day post-discharge period Given the elements of the service and the
short window of time following a discharge during which a physician or
qualifying nonphysician practitioner will need to perform several tasks
on behalf of a beneficiary, we stated our belief that it would be
unlikely that two or more physicians or practitioners would have had a
face-to-face E/M contact with the beneficiary in the specified window
of 30 days prior or 14 days post discharge and have furnished the
proposed post-discharge TCM services listed above. Therefore, we did
not believe it necessary to take further steps to identify a
beneficiary's community physician or qualified nonphysician
practitioner who furnished the post-discharge TCM services. We proposed
to pay only one claim for the post-discharge transitional care GXXX1
billed per beneficiary at the conclusion of the 30 day post-discharge
period. Post-discharge TCM services relating to any subsequent
discharges for a beneficiary in the same 30-day period would be
included in the single payment. Practitioners billing this post-
discharge transitional care code accept responsibility for managing and
coordinating the beneficiary's care over the first 30 days after
discharge.
Comment: We received many comments on the proposed new code. The
vast majority supported the concept in whole or in part. Only a handful
of comments were generally opposed to the proposal to recognize and pay
for TCM services. One commenter, while acknowledging that our proposal
was ``well intentioned,'' expressed concern about adopting such an
important proposal without explicit statutory direction. In particular,
the commenter

[[Page 68981]]

recommended that we should be more judicious in using the PFS
rulemaking process to adopt far-reaching new policies requiring sizable
BN adjustments. The commenter suggested that, if the proposed policies
had been mandated by the Congress, the BN adjustment would presumably
not be required. Another commenter suggested that the proposed new code
was duplicative, because pre- and post-encounter non-face-to-face care
management work is included in the total work for the typical E/M
services, and the total work for subsequent post-operative visits that
accompany surgical procedures.
Response: We thank the commenters who wrote in support of this
proposal. For the reasons that we stated in the proposed rule, we do
not believe that all the pre- and post- encounter non-face-to-face care
management work that typically occurs when a beneficiary is discharged
from a hospital, SNF or CMHC stay is included in the total work for the
typical E/M services. This is because the E/M codes represent the
typical outpatient visit and do not capture or reflect the significant
care coordination that needs to occur when a beneficiary transitions
from institutional to community-based care. (77 FR 44776) Therefore, we
continue to believe that separate payment for TCM services does not
duplicate payment for typical E/M services. We also believe that
adoption of new codes such as our proposed TCM code is consistent with
our statutory directive to maintain the physician fee schedule by
recognizing changes in practice patterns and by adjusting codes,
relative values, and payment accordingly. We have routinely added new
codes created by AMA CPT to the fee schedule. As we indicated in the
proposed rule, our proposal was, in part, a response to work by the
AMAs C3W to develop new codes for TCM services. Below we discuss the
AMA's recommendation that we adopt the TCM codes developed by that
workgroup in place of our proposed TCM G-code.
Comment: Most comments were generally supportive of the proposal to
recognize and pay for TCM services. A few commenters merely expressed
general support for the proposal. However, the great majority of these
generally positive comments also recommended adopting the proposed TCM
G code with revisions to the code description, or adopting the AMA's
new CPT TCM codes in place of our proposed TCM G-code.
Response: We appreciate the widespread support for our initiative
to recognize and pay for TCM services. As we discuss below, we are
proceeding with our proposal in a modified form, adopting some of the
commenters' specific recommendations for revision. Most importantly, we
are accepting the recommendation of many commenters that we adopt the
AMA's CPT TCM codes in place of our proposed TCM G-code. As discussed
below, we will therefore pay for new CPT TCM codes 99495 and 99496 with
some small modifications to the code descriptions developed by the
AMA's C3W. The new TCM codes developed by the AMA C3W are:
99495 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of at least moderate complexity during
the service period.
++ Face-to-face visit, within 14 calendar days of discharge.
99496 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of high complexity during the service
period.
++ Face-to-face visit, within 7 calendar days of discharge.
We discuss these codes in greater detail and respond to these
specific recommendations below.
Comment: Many commenters, including the AMA and other specialty
societies, expressed appreciation for our initiative to propose a new
G-code and language to describe TCM, but urged us instead to implement
the new CPT TCM codes. Commenters emphasized that these codes
represented the consensus of the physician community as represented by
the AMA's C3W. Commenters also emphasized that the CPT TCM codes are
very similar to our proposal, with a few key differences. We summarize
the key differences between our proposed TCM G-code and the CPT TCM
codes in Table 26.

Table 26--Key Differences Between Proposed Transitional Care Management
(TCM) G-Code and the CPT Codes
------------------------------------------------------------------------
CMS Proposed TCM G-
code CPT TCM codes
------------------------------------------------------------------------
Code(s)..................... GXXX1--Post- 99490X--Transitional
discharge care management
transitional care services (medical
management (medical decision making of
decision making of moderate
moderate to high complexity), and
complexity). 99491X--Transitiona
l care management
services (decision
making of high
complexity).
Face-to-face visit.......... Separately billed Face-to-face visit
face-to-face E/M within 14 calendar
visit within 30 days of discharge
days prior to the (99490X), or within
hospital discharge 7 calendar days
or within the first (99491X). The first
14 days of the 30- face-to-face visit
day period of TCM is part of the TCM
services. service and not
reported
separately. E/M
services after the
first face-to-face
visit may be
reported
separately.
Relationship with patient... The patient may be The reporting
new to the physician or NPP
physician's must have an
practice (provided established
the face-to-face relationship with
visit requirements the patient.
above are met). Established patient
means a visit in
the past 3 years.
Discharge management........ The physician or NPP A physician or NPP
who bills for may report both the
discharge discharge code and
management services appropriate TCM
during the time code.
period covered by
TCM services may
not also bill for
GXXX1.

[[Page 68982]]

Global services............. The physician who The physician who
reports a service reports a service
with a global with a global
period of 010 or period of 010 or
090 days may not 090 days may not
also report the TCM also report the TCM
service. service. However,
the AMA recommends
that specialties
work on a CPT
proposal for a new
code to describe
extensive post-
discharge TCM
services.
------------------------------------------------------------------------

A few commenters from the medical community did not specifically
recommend adopting the CPT TCM codes. For example, one major medical
society supported our proposal on the grounds, among other
considerations, that it was consistent with the ``general direction of
organized medicine, as evidenced by the fact that the AMA's CPT
Editorial Panel has created two new codes for transitional care
management.'' This commenter then expressed support for several of the
several elements in our proposed G code which differ from the CPT TCM
codes, such as our ``proposal to keep the required post-discharge face-
to-face E/M separately reportable.'' (We discuss this issue in further
detail later in this section.)
Response: We agree with those commenters who recommended that we
should acknowledge the physician community's work on primary care by
adopting the CPT TCM codes in place of our proposed G-code. With regard
to the differences noted above, we agree with the AMA's CPT
construction that uses two separate codes to distinguish moderate and
high complexity services in place of our single proposed G-code, which
allowed for reporting services of either moderate or high complexity.
We discuss the issues connected with the other differences between our
proposed TCM G-code and the AMA's CPT TCM codes in responses to more
specific comments of the AMA and others below.
We explicitly constructed this proposal as a payment for non-face-
to-face post-discharge TCM services separate from payment for E/M or
other medical visits. However, we believe that it is important to
ensure that the community physician or qualified nonphysician
practitioner furnishing post-discharge TCM services either already have
or establish, soon after discharge, a relationship with the
beneficiary. As such, we proposed that the community physician or
qualified nonphysician practitioner reporting post-discharge TCM GXXX1
should already have a relationship with the beneficiary, or establish
one soon after discharge, prior to furnishing TCM and billing this
code. Therefore, we specifically proposed that the community physician
or qualified nonphysician practitioner reporting a TCM G-code must have
billed an E/M visit for that beneficiary within 30 days prior to the
hospital discharge (the start of post-discharge TCM period), or must
conduct an E/M office/outpatient visit (99201 to 99215) within the
first 14 days of the 30-day post-discharge period of TCM services. In
either case, the E/M visit would be separately billed under our G-code
proposal. While we proposed that the post-discharge TCM code would not
include a face-to-face visit, and that physicians or qualified
nonphysician practitioners would bill and be paid for this care
management service separately from a medical visit, we sought comments
about whether we should require a face-to-face visit when billing for
the post-discharge TCM service: That is, whether we should bundle a
required visit into the reporting and payment for the TCM codes. We
were also concerned about whether beneficiaries would understand their
coinsurance liability for the post-discharge transitional care service
when they did not visit the physician's or qualified nonphysician
practitioner's office.
Comment: The AMA and many other commenters recommended that we
should require a face-to-face visit within 7 to 14 days after discharge
when billing for the post-discharge TCM service. Under the CPT TCM
codes, the first face-to-face visit is part of the TCM service and not
reported separately. Additional E/M services required for managing the
beneficiary's clinical issues in addition to the required face-to-face
visit may be reported separately. These commenters emphasized that
requiring a face-to-face visit within 7 to 14 days of discharge will
provide for a more successful transition from facility to community.
Other commenters maintained that we should retain the requirement for a
separately billable face-to-face E/M either within 30 days before or 14
days after discharge. These commenters emphasized that such a
requirement acknowledges that an established relationship with the
patient is needed to bill the new code, and the level of E/M service
will not be the same for every patient. A few commenters specifically
recommended that it was not necessary to adopt any such requirement for
a face-to-face visit (whether separately billable or not) in the
context of a service that is essentially non-face-to-face. Some
emphasized that it could be inefficient to require a visit that may not
always be clinically necessary, and that the clinical decision about
whether a visit is necessary should be left to the physician or
qualified nonphysician practitioner. Other commenters emphasized that
an office visit could be impractical in cases where patients may have
limited mobility or otherwise have difficulty travelling to a physician
office. Some of these commenters urged that we not adopt such a
requirement, while others recommended that we expand the list of
acceptable face-to-face visits to include other outpatient visit codes,
such as home visits (99341-99350) and domiciliary/rest home visits
(99324-99337). Still others stated that the window in which the post
discharge visit must occur should be extended to 30 days post-
discharge, not 14 days.
Response: The primary driver in creating these new CPT TCM codes
has been to improve care coordination and to provide better incentives
to ensure that these patients are seen in a physician's office, rather
than be at risk for readmission. Therefore, we agree that care
coordination beginning immediately upon discharge and the face-to-face
visit within 7 or 14 days of discharge (as appropriate) will provide
for a more successful transition from a facility to the community.
However, as we indicated in the proposed rule, our adoption of codes
for TCM services is part of the broader HHS and CMS multi-year strategy
to recognize and support primary care and care management, and we are
committed to considering new options and developing future proposals
for payment of primary care services under the MPFS. Therefore, we
consider the requirement for a face-to-face visit in

[[Page 68983]]

association with the non-face-to-face tasks of TCM to be a short-term,
transitional strategy while we continue to explore our interest in
further improvements to advanced primary care payment.
We also share the commenters' concerns about beneficiaries who may
have limited mobility or otherwise have difficulty travelling to a
physician office in the period following a discharge. We note that the
final CPT TCM codes, 99495 and 99496, which we are adopting in this
final rule with comment period, requires a face-to-face visit, but does
not specify the location/setting for that portion of the service. The
AMA RUC states in its recommendation that, ``each code includes a
timely face-to-face visit which typically occurs in the office, but can
also occur at home or other location where the patient resides.''
Finally, we agree with those commenters who stated that beneficiaries
would understand their coinsurance liability better if the TCM services
included a required E/M visit as part of the service.
We also sought comments regarding whether we should incorporate
such a required visit on the same day into the payment for the proposed
code. We considered several reasons for requiring a face-to-face visit
on the same day as the date of discharge. We wondered whether, with a
face-to-face visit immediately after discharge, the plan of care would
be more accurate given that the patient's medical or psychosocial
condition may have changed from the time the practitioner last met with
the patient and the practitioner could better develop a plan of care
through an in-person visit and discussion. On the other hand, we
contemplated several scenarios where it is not possible for a
beneficiary to get to the physician's or qualified nonphysician
practitioner's office and welcomed comment on whether an exception
process would be appropriate if we were to finalize a same day face-to-
face visit as a requirement for billing the post-discharge TCM code.
Comment: Commenters were almost uniformly opposed to a requirement
for a same day visit. The commenters believed that a same day visit is
unrealistic and should not be required because hospital discharge
records are not always immediately available to the physician who would
be assuming responsibility for transitional care. Some commenters,
including several who favor a face-to-face requirement other than a
same day requirement, also favored an exception for beneficiaries too
feeble to travel to an office. Other commenters maintained that a
requirement for a face-to-face encounter with an exception process
could prove confusing and administratively challenging as it would
require communication of exceptions criteria and audit/appeals
processes.
Response: In conjunction with adopting the AMA's recommendation to
require a face-to-face visit within 7 or 14 days of discharge for
reporting the CPT TCM codes, we have also decided not to proceed with a
requirement for a same day face-to-face visit. We agree with commenters
who stated that such a requirement would be unrealistic in many
situations, and would require the adoption of an exceptions process
that could, unto itself, prove administratively difficult and
confusing. At the same time, we emphasize that we believe physicians
should seek to make an assessment and conduct the face-to-face visit as
quickly as medically necessary after discharge in order to address
patient care needs.
Comment: As we noted above, we proposed to require communication
(direct contact, telephone, electronic) with the patient or caregiver
within 2 business days of discharge. Some commenters stated that the
specific requirement for the physician to communicate with the patient
within 2 business days of discharge to begin the coordination of care
is unrealistic. Some contended that hospital discharge records are not
always available that quickly. Several other commenters expressed
concern about the references to ``business days'' in this requirement.
(Other requirements, for length of TCM service and the timing of the
required E/M visit are established in terms of calendar days for
purposes of the TCM codes.) The commenters noted that, traditionally,
business days are Monday through Friday, except for holidays. However,
many primary care practices are also open on weekends, making those
``business days'' for those practices. Most importantly, beneficiaries'
need for medical care and care coordination is not limited to
``business days,'' nor are their discharges. Thus, the commenters
recommended that CMS change ``business days'' to ``calendar days'' in
this context, which, they asserted, would be consistent with CMS's
proposal to define the code as a 30 calendar day service. The AMA CPT
TCM codes incorporate a requirement for an interactive contact with the
patient or caregiver, as appropriate, within 2 business days of
discharge. This contact may be direct (face-to-face), telephonic, or by
electronic means. The AMA CPT TCM codes also specify that, for purposes
of this requirement, business days are Monday through Friday, except
holidays, without respect to normal practice hours or date of
notification of discharge. If two or more separate attempts are made in
a timely manner, but are unsuccessful and other TCM criteria are met,
the service may be reported. We emphasize, however, that we expect
attempts to communicate to continue until they are successful.
Response: Our proposed TCM G-code contained a requirement for
communication with the patient or caretaker within 2 business days of
discharge. We also agree with the AMA's assessment concerning the
importance of such a requirement to meeting the goals of successful
TCM. We also agree with the AMA's provision to allow for billing of the
TCM service if two or more separate, unsuccessful attempts at
communication are made within a timely fashion. We believe that this
provision should substantially reduce the concerns of some commenters
about the tight timeline for making this initial contact. We also
believe that concerns about the availability of hospital discharge
records should decline dramatically as both hospitals and physicians
respond to the current incentive payments (and the payment reductions
beginning in 2015) to encourage adoption of electronic health records
systems. We cannot agree with those commenters who suggested that we
should substitute ``calendar days'' for ``business days'' in this
requirement. We do not believe that the timeframe for this requirement
needs to be expressed in calendar days to be consistent with the 30
calendar day timeframe for the service. More importantly, establishing
a timeframe of 2 calendar days for this initial contact would severely
disadvantage those practices which do not have regular business hours
on the weekends.
Comment: In our proposed G-code, we required that physicians or
qualified nonphysician practitioners must have had a face-to-face E/M
visit with the beneficiary in the 30 days prior to the transition in
care or within 14 business days following the transition in care.
However, we allowed that, if the physician or qualified nonphysician
practitioner met this requirement, the patient could otherwise be new
to the practice. The AMA recommended that the physician reporting the
CPT TCM codes must have an established relationship with the patient,
as required for the those codes, rather than allowing physicians to
bill for TCM services furnished to patients who are new to their
practices. Under CPT TCM definitions, an established relationship with
a patient exists when a physician has billed a visit with the patient
within

[[Page 68984]]

the last three years. Many commenters maintained that a visit within 30
days prior to the discharge was largely irrelevant to the actual
provision of TCM services. Other commenters maintained that defining a
pre-existing relationship as a visit within 30 days prior to the
discharge is far too restrictive. A patient with established disease
may only be seen by a physician every 3 to 6 months. We should
therefore allow an E/M service to be furnished any time in the 12
months prior to the discharge to be considered evidence of an
established relationship.
Response: We agree with commenters that a visit within 30 days
before the hospital discharge might be too restrictive for purposes of
establishing an existing relationship with a patient. We are therefore
accepting the AMA's recommendation not to include such a requirement in
the CPT TCM codes and note that the CPT TCM codes also do not require a
visit within 30 days before discharge. Rather, as the AMA has
recommended, we will include a requirement for a face-to-face visit
with the beneficiary within 14 days (in the case of CPT code 99495) or
7 days (in the case of CPT code 99495. This required visit is bundled
into the payment for the codes and is not separately payable. We do not
entirely agree with the AMA's recommendation that the physician must
have an established relationship prior to the discharge with the
patient to report the CPT TCM codes. We are concerned that such a
requirement would make it impossible for an especially vulnerable group
of patients, specifically, those who do not have an established a
relationship with a primary care or other community physician, to
receive the benefit of post-discharge TCM services. These patients may
well be among those who would benefit most from these services,
particularly because receiving TCM services could provide the
opportunity for them to establish a continuing relationship with a
physician who is able to assume overall management of their care.
Therefore,, in conjunction with our adoption of the CPT TCM codes, we
will develop additional Medicare-specific guidance for the use of these
codes that modifies this element of the CPT TCM prefatory instructions,
to allow a physician to bill these codes for new patients (provided
that the physician meets visit requirement and all other requirements
for the CPT TCM codes). It is important to note, however, that the
payment amount for the CPT TCM codes will be the same whether the codes
are billed under Medicare for treating new or established patients
under the TCM codes. For Medicare purposes we are modifying the
prefatory instructions for the CPT TCM codes because we wish to
encourage the provision of TCM services to those beneficiaries who can
benefit from the services--whether the beneficiary is a new or
established patient. However, we believe that the typical case will
involve provision of TCM services to an established patient, and
relative values for codes are established on the basis of the typical
case. Physicians may choose to bill other appropriate codes (for
example, new patient E/M codes) that better describe the services
furnished.
Comment: We proposed that a physician or qualified nonphysician
practitioner who bills for discharge day management during the time
period covered by the TCM services code may not also bill for HCPCS
code GXXX1. The CPT discharge day management codes are 99217, 99234-
99236, 99238-99239, 99281-99285, or 99315-99316. The AMA/RUC and many
other commenters recommended that a physician reporting the discharge
management should also be able to report the new TCM service. The AMA/
RUC and other commenters noted an AMA data analysis that nearly 25
percent of those visits reported within 14 days of discharge were from
the physician who also furnished the discharge services. The commenters
emphasized that discharge management services reflect the work done at
the time of discharge. The TCM service describes the work following
discharge. Therefore, the commenters contended that there should be
minimal or no overlap in the actual work performed in providing these
two services. Other commenters emphasized that the physician or group
practice billing for discharge day management could also be the
physician or group practice regularly responsible for the patient's
primary care and would therefore be the appropriate physician to take
responsibility for the patient's transition to the community.
Response: We accept the AMA/RUC's recommendation (as supported by a
number of commenters) to allow a physician to report both the discharge
management code and a CPT TCM code. We agree with those commenters who
emphasized that the physician billing discharge day management could
also be the physician who is regularly responsible for the
beneficiary's primary care (this may be especially the case in rural
communities), and who would therefore be the appropriate physician to
take responsibility for the patient's transition to the community.
However, we continue to be concerned that there could be some overlap
in the actual work involved in providing these two services and, that
payment to one physician for both of these services might be excessive
as a result. Therefore, we will monitor claims data to ascertain the
extent to which the same physician bills for both the discharge day
management and TCM services and analyze whether it may be appropriate
to develop a payment adjustment that recognizes overlap in resources in
the future.
In addition, we note that the CPT TCM code prefatory language
provides that the TCM service period ``commences upon the date of
discharge and continues for the next 29 days.'' Subsequent CPT TCM
language indicates that the first visit must occur within 7 or 14
calendar days of the date of discharge depending on the level of
decision-making. We are unclear as to whether the CPT TCM prefatory
language intends to allow the first visit to occur on the same date as
discharge. We note that there is a distinction between the discharge
day management and TCM services, and we wish to avoid any implication
that the E/M services furnished on the day of discharge as part of the
discharge management service could be considered to meet the
requirement for the TCM service that the physician or nonphysician
practitioner must conduct an E/M service within 7 or 14 days of
discharge. Therefore, we will specify that the E/M service required for
the CPT TCM codes cannot be furnished by the same physician or
nonphysician practitioner on the same day as the discharge management
service.
Comment: A number of commenters suggested that payment for the E/M
hospital discharge management codes (CPT 99238 or 99239) is inadequate
to reflect the discharging duties of the physician. While most of these
commenters supported enhanced payment for community physicians to
furnish care coordination services on the receiving end, they stated
that a corresponding increase in payment to those physicians who are
discharging patients is also warranted.
Response: We continue to believe that the current hospital
discharge management codes (CPT codes 99238 and 99239) and nursing
facility discharge services (CPT codes 99315 and 99316) adequately
capture the care coordination services required to discharge a
beneficiary from hospital or skilled nursing facility care. The work
relative values for those discharge management services include a
number of pre-, post-, and intra-care

[[Page 68985]]

coordination activities. For example, the hospital discharge management
codes include the following pre-, intra-, and post- service activities
relating to care coordination:
Pre-service care coordination activities include:
Communicate with other professionals and with patient or
patient's family.
Intra-service care coordination activities include:
Discuss aftercare treatment with the patient, family and
other healthcare professionals;
Provide care coordination for the transition including
instructions for aftercare to caregivers;
Order/arrange for post discharge follow-up professional
services and testing; and
Inform the primary care or referring physician or
qualified nonphysician practitioner of discharge plans.
Post-service care coordination activities include:
Provide necessary care coordination, telephonic or
electronic communication assistance, and other necessary management
related to this hospitalization; and
Revise treatment plan(s) and communicate with patient and/
or caregiver, as necessary.
The hospital and nursing facility discharge management codes also
include a number of other pre-, intra and post-service activities.
We certainly recognize that the services of physicians and other
practitioners providing discharge management services are crucial to
the overall success of TCM services. These codes have been valued by
the AMA/RUC in the past, and these valuations have been reviewed and
accepted by us. At this time, we are not aware of any substantive
evidence that these codes are systematically undervalued.
Comment: We proposed that a physician or qualified nonphysician
practitioner who bills for emergency department visits (99281-99285),
home health care plan oversight services (HCPCS code G0181), or hospice
care plan oversight services (HCPCS code G0182) during the time period
covered by the TCM services code may not also bill for HCPCS code
GXXX1. We indicated that we believed these codes describe care
management services for which Medicare makes separate payment and
should not be billed in conjunction with GXXX1, which is a
comprehensive post-discharge TCM service. The AMA noted that for the
proposed TCM G-code we would not allow TCM services to be reported with
emergency department visits, home health care oversight (G0181),
hospice care plan oversight (G0182). The AMA CPT TCM codes allow for
reporting of emergency department visits. The AMA also indicated that a
physician or other qualified health care professional who reports a TCM
code may not report the CPT codes for care plan oversight services
(99339, 99340, 99374-99380). At the same time, the CPT TCM codes also
specify that many other codes may not be reported with TCM (for
example, non-face-to-face services such as telephone calls).
Response: In conjunction with adopting the AMA CPT TCM, we accept
the recommendation to allow reporting of emergency department visits
when also billing the CPT TCM codes. We also agree with the
recommendation not to allow reporting of care plan oversight services
when also billing the CPT TCM codes. We had proposed to prohibit
billing of the G-codes that we employ for home health care oversight
(G0181), and hospice care plan oversight (G0182) with our proposed TCM
G-code, on the grounds that such care management services duplicate the
services provide in TCM. We are including these G-codes in the list of
codes for such services that are precluded from billing with the CPT
TCM codes, because we continue to believe that they are duplicative of
the CPT care plan management aspects of the CPT TCM codes. We will also
accept the AMA recommendation specifying many additional codes that may
not be reported with CPT TCM codes (for example, non-face-to-face
services such as telephone calls), as specified in the descriptions of
CPT TCM codes 99495 or 99496 below. We are accepting these
recommendations because they similarly avoid duplicate payment for the
same services.
Further, we proposed that a physician or qualified nonphysician
practitioner billing for a procedure with a 10- or 90-day global period
would not also be permitted to bill HCPCS code GXXX1 in conjunction
with that procedure because any follow-up care management would be
included in the post-operative portion of the global period.
Comment: Many commenters expressed concerns with prohibiting
physicians who bill services with a global period from billing the TCM
code as well. One commenter stated that ``permitting a surgeon to
receive payment under these circumstances would not result in duplicate
payment for the same service * * * [I]f follow-up care management
included in the post-operative portion of a global period can be
reimbursed separately from the proposed transitional care management
code when performed by two different physicians, they should remain
separately reimbursable when these functions are all performed by the
same physician.'' One commenter specifically agreed with our proposal
to prohibit the billing of TCM by a physician providing the original
care within a 010 or 090 day global period code. The AMA CPT TCM codes
do not allow physicians billing services with global periods of 010 and
090 days to bill for TCM services. However, the AMA RUC recommends that
specialties work with the CPT Editorial Panel to develop a new code for
those cases in which comprehensive TCM services are furnished along
with the services already bundled into the global codes. However, the
AMA RUC also indicates that it would not be typical for a surgeon to
furnish TCM services.
Response: We agree with the commenters that the physician who
reports a global procedure should not be permitted to also report the
TCM service, and we are adopting that policy in this final rule. The
AMA RUC specifically states in its comment letter that it would not be
typical for surgeons billing global procedures to also provide TCM
services. Our goal is that the physician billing for TCM services
should have an ongoing relationship with the beneficiary. We do not
believe surgeons typically would be in a position to coordinate all
aspects of a patient's care, because their relationship with a
beneficiary frequently ends after the end of the global period (unless
or until additional surgery is required).
We proposed that the TCM code would be payable only once in the 30
days following a discharge, per patient per discharge, to a single
community physician or qualified nonphysician practitioner (or group
practice) who assumes responsibility for the patient's post-discharge
TCM. We expressed our belief that, given the elements of the TCM
service and the short time period during which they must be furnished,
it would be unlikely that two or more physicians would meet the
requirements for billing the TCM code.
Comment: Many commenters requested clarification concerning whether
the TCM codes could be billed again if another hospital admission and
discharge occur within the initial 30 day period following a discharge.
The commenters recommended that we allow the clock to start over with
each admission, that is, allow for payment of TCM even when readmission
occurs within the original 30 day period after a discharge. A few
commenters recommended that CMS develop a mechanism to monitor
readmissions for patients receiving TCM services to

[[Page 68986]]

determine if this effort positively impacts beneficiary outcomes and
decreases the burden on the healthcare system. The mechanism would
require physician reporting at the beginning and end of the care
period, and may require a ``start'' and a ``stop'' modifier to the new
G-code. A few commenters specifically supported the ``only once within
30 days of discharge'' policy. The AMA's C3W stipulated that the CPT
TCM codes may be reported ``* * * only once per patient within 30 days
of discharge. Another CPT TCM code may not be reported by the same
individual or group for any subsequent discharge(s) within the 30
days.''
Response: In adopting the CPT TCM codes, we believe it is
appropriate to maintain the limitation that the codes can be billed
only once per patient within 30 days of discharge, which is consistent
with the policy we proposed for our TCM G-code. Preventing unnecessary
hospital readmissions in the period shortly after a discharge is an
important goal and part of the reason we proposed improved recognition
and payment of TCM services (as well as other initiatives within the
Medicare program). We believe that it would be at least inconsistent
with this goal, and perhaps even counterproductive to it, to allow for
another TCM code to be billed when a hospital discharge occurs within
30 days after the original discharge for which a TCM code has been
billed. We appreciate the comments recommending that we monitor
readmissions for patients receiving TCM services to determine if this
effort positively impacts beneficiary outcomes and decreases the burden
on the healthcare system. We will consider how to incorporate this into
our existing initiatives that address these issues.
Comment: We proposed that the TCM G-code would be payable to a
single community physician or nonphysician practitioner (or group
practice) who assumes responsibility for the patient's post-discharge
TCM. Many commenters recommended allowing more than one physician to
bill a TCM code during the same 30-day period on the grounds that:
``Complex patients often have to follow-up with more than one provider
after a discharge. Each of these providers could be performing care
coordination and should be compensated accordingly.'' The CPT TCM codes
allow for only one individual to report these services and only once
per patient within 30 days of discharge.
Response: We disagree that more than one physician should be
allowed to bill the TCM codes during a single 30 day period after a
discharge. Coordination of care intrinsically involves developing and
implementing a single plan of care for a patient. Allowing multiple
physicians to furnish this service simultaneously would introduce the
danger that an individual patient might be subjected to inconsistent or
even contradictory plans of care. In other words, allowing more than
one physician to bill TCM codes simultaneously could lead to
uncoordinated rather than coordinated post-discharge care. We will
therefore follow the CPT TCM code rule that these services may be
billed by only one individual during the 30 day period after discharge.
Comment: Other commenters recommended further restricting and/or
raising the bar for billing TCM codes. Many objected to our proposal to
pay the first physician or qualified nonphysician practitioner who
submitted a claim because, they asserted, it would lead to an
uncoordinated, sub-optimal ``race to bill.'' One of these commenters
expressed concern that practitioners' offices would have to compete
with each other to submit the bill first. In addition, this commenter
was concerned that practitioners' offices would not be able to track
whether or not they are the first to submit a claim and could get paid
for the service. MedPAC noted that the first physician or nonphysician
practitioner to submit a claim may not be providing the bulk of the TCM
services, and recommended raising the bar to ensure payment goes to
physicians actually providing comprehensive primary care to the
beneficiary by requiring that the billing provider must have billed for
an E&M visit (that is, a face-to-face visit) that took place within the
30 days prior to admission and within the 14 days following discharge.
Another commenter recommended that we adopt a multi-stage process of
screening claims to identify the beneficiary's primary care physician,
who then would be the only physician permitted to bill a TCM code. The
commenter noted that we referred to the community-based physician as
the one who would manage and coordinate a beneficiary's care in the
post-discharge period, and we anticipated that most community
physicians will be primary care physicians and practitioners. The
commenter also stated: ``It is thus perplexing that CMS did not propose
to restrict the use of this code to actual primary care physicians.''
Others recommended employing a ``plurality of services'' determination
in case more than one physician and/or nonphysician practitioner bills
TCM after the same discharge. One commenter recommended that we should
require beneficiaries to prospectively identify their primary care
provider.
Response Any physician who is appropriately enrolled in Medicare
and furnishes the service may bill for that service. We continue to
expect that most community physicians who are furnishing TCM services
will be primary care physicians and practitioners. However, we also
believe that there will be circumstances in which cardiologists,
oncologists, or other specialists will be in the best position to
furnish transitional care coordination after a hospital discharge.
Furthermore, we believe that the requirements for physicians or
qualified nonphysician practitioners to furnish multiple specific
services for the beneficiary within a restricted period of time will
limit the circumstances under which more than one practitioner might be
able to bill the TCM codes. We appreciate MedPAC's suggestion that we
require that the billing provider must have billed for an E/M visit
(that is, a face-to-face visit) that took place within the 30 days
prior to admission and within the 14 days following discharge. However
we are concerned that adopting such a policy would actually have the
unintended consequence of prohibiting many physicians with well-
established relationships and a history of providing comprehensive care
for their beneficiaries from reporting the TCM service for these same
patients, simply because an office visit may not have occurred within
30 days prior to a, possibly even unanticipated, hospitalization. After
considering all these comments, we continue to believe that it is not
necessary to develop any further restrictions or complex operational
mechanisms to identify one and only one physician or nonphysician
practitioner who may bill the codes for a specific beneficiary. We have
used such a ``first claim'' policy in other areas, such as a radiology
interpretation and the Annual Wellness Visit. However, we would expect
the discharging physician to support TCM services by discussing post-
discharge services with the beneficiary (which is an element in the
discharge day management vignette), and to identify a community
physician for follow-up whenever possible. Specifically, we expect
discharging physicians and other physicians seeing beneficiaries in a
facility to inform the beneficiaries that they should receive TCM
services from their doctor or other practitioner after their discharge,
and that Medicare will pay for those services. As a part of this

[[Page 68987]]

disclosure to patients, we also expect that the discharging physician
would ask the beneficiary to identify the physician or nonphysician
practitioner whom he or she wishes to furnish these transitional care
management services. If the beneficiary does not have a preference for
the physician who would furnish these services, the discharging
physician may suggest a specific physician who might be in the best
position to furnish the TCM services. The recording of this information
could also help in the transitional care coordination activities. We
believe that it could be helpful for the physician providing discharge
day management services to record the community physician who would be
providing TCM services in the discharge medical record and the
discharge instructions for patients. We note that recent literature
highlights the importance of these patient-centered communication
activities for effective transitional care management.\1\ As we further
consider how Advanced Primary Care practices can fit with a fee-for-
service model, we also will actively consider methodologies that could
allow Medicare to identify the beneficiary's community/primary care
physician.
---------------------------------------------------------------------------

\1\ Hesselink MA, Schoonhoven L, Barach P et al. Improving
patient handovers from hospital to primary care. Annals of Internal
Medicine 2012; 157: 417-428.
---------------------------------------------------------------------------

Comment: Many commenters endorsed our proposal not to restrict
billing of this proposed TCM code to primary care physicians. Other
commenters requested that we confirm that specialists can bill the new
code if they meet the service requirements of comprehensive TCM
services. Other commenters similarly requested confirmation that they
can bill the TCM code if they meet the requirements. Some commenters
from health care professions other than physicians, NPs, PAs, CNSs, and
CNMs similarly requested that they be permitted to bill the CPT TCM
codes and receive payment for these services.
Response: We appreciate these comments and take this opportunity to
confirm that, while we expect the TCM codes to be billed most
frequently by primary care physicians, specialists who furnish the
requisite services in the code descriptions may also bill the new TCM
codes. As for nonphysician qualified health care professionals, we
believe only NPs, PAs, CNSs, and certified nurse midwives (CNMs) can
furnish the full range of E/M services and complete medical management
of a patient under their Medicare benefit to the limit of their state
scope of practice. Other nonphysician practitioners (such as registered
dieticians, nutrition professionals or clinical social workers) or
limited-license practitioners, (such as optometrists, podiatrists,
doctors of dental surgery or dental medicine), are limited by the scope
of their state licensing or their statutory Medicare benefit to furnish
comprehensive medical evaluation and management services, and there is
no Medicare benefit category that allows explicit payment to some of
the other health professionals (such as pharmacists and care
coordinators) seeking to bill TCM services. Accordingly, we will not
adopt the requests of other health care professionals to bill the CPT
TCM codes because these services go beyond the statutory benefit and
state scope of practice for the requesting practitioners. As already
discussed, we consider the separate coding and payment for these TCM
services to be a short-term initiative as we further consider
alternatives to ensure that any payment for primary care services would
constitute a minimum level of care coordination, such as payments in a
FFS setting.
Comment: Several commenters requested that we extend recognition of
care coordination to RHC physicians and providers as well or at least
clarify whether providers practicing in rural health clinics may
utilize the new HCPCS G-code.
Response: While we recognize that RHCs have an important role in
furnishing care in their communities, RHCs are paid an all-inclusive
rate per visit. Since RHCs are not paid under the PFS, physicians and
other RHC providers whose services are paid within the RHC all-
inclusive rate cannot bill using the CPT TCM codes for services
furnished in the RHC. However, an RHC physician or other qualified
provider who has a separate fee-for-service practice when not working
at the RHC may bill the CPT TCM codes, subject to the other existing
requirements for billing under the MPFS.
Comment: We also proposed that the TCM G-code would be ``billable
only at 30 days post discharge or thereafter.'' Although we proposed
that the billing for TCM services would occur, as it does for most
services, after the conclusion of the service that is, only at 30 days
post discharge or thereafter), we welcomed comment on whether, in this
case, there would be merit to allowing billing for the code to occur at
the time the plan of care is established. Many commenters recommended
that billing of TCM services should occur (as proposed) at the end of
the 30-day TCM period. A smaller number of commenters recommended that
it should be allowed to occur at the time the plan of care is
established. One commenter observed that billing for the post-
transitional service at the time the plan of care is established may
help prevent a ``race to the billing office'' by various providers, as
the appropriate provider coordinating the post-transitional care would
be well-established among the various medical providers involved in the
patient's care. The CPT TCM code prefatory language provides: ``Only
one individual may report these services and only once per patient
within 30 days of discharge.'' (Emphasis supplied.)
Response: We continue to believe that the billing for TCM services
under the PFS should occur, as it does for most fee schedule services,
after the conclusion of the service (that is, only at 30 days post
discharge or thereafter). Allowing for billing at the time the plan of
care is established, or at any other time prior to the end of the 30-
day period, would pose serious administrative problems. For example,
adopting any policy other than billing at the end of the 30-day service
period would make it difficult to monitor the CPT TCM requirement that
the code be billed only once in the 30-day period beginning with the
discharge. It would also be very challenging to monitor our policy that
subsequent hospital admissions during that period will not begin a new
30-day period and allow reporting of another TCM service. We will
provide guidance to physicians and qualified NPPs regarding the billing
of the CPT TCM codes, which will occur at the conclusion of the period
for providing TCM services, 30 days post discharge. We appreciate the
concern about preventing a situation where two physicians may rush to
bill for TCM services. However, as we have previously discussed, we
believe it would be quite unlikely that more than one physician or
nonphysician practitioner will be able simultaneously to satisfy the
numerous and complex requirements for billing the CPT TCM codes.
Comment: Some commenters were concerned about the large number of
activities that are required to furnish the TCM service. The commenters
emphasized that many of the activities listed could require a lengthy
discussion or actions that need to be undertaken with the patient that
would far exceed that allowable time. Some commenters stated that the
specific requirement that the physician communicate with the patient
within 2 business days of discharge to begin the coordination of care
is unrealistic because hospital

[[Page 68988]]

discharge records are not always available that quickly. Other
commenters pointed to the requirement for an assessment of the
patient's psychosocial needs as potentially an excessively burdensome
requirement. One commenter asked us to reconsider the requirement that
these codes only cover patients of moderate to high complexity on the
grounds that most admissions are relatively straightforward and
patients do not require moderate to complex decision making but that
these less complex patients still require TCM services. On the other
hand, some commenters recommended additions to the services already
listed, such as the addition of communication between the accepting
primary care/community physician and the discharging inpatient
physician.
Response: We agree with the commenters that a large number of
activities are required to report the TCM codes. However, we believe
that these requirements are entirely appropriate. As we have noted
before, TCM services require management and coordination of all
relevant aspects of a beneficiary's health status in the post-discharge
period. And as a number of commenters maintained, physicians should not
undertake TCM services unless they are capable and willing to assume
comprehensive responsibility for a patient's care during the period of
the service. In the light of these considerations, we believe the
lengthy list of services required by our proposed G-code, and largely
paralleled in the AMA's CPT TCM codes that we are adopting in this
final rule, is quite appropriate to the nature of the service. With
regard to the specific requirement for assessment of psychosocial
needs, we note again for example that depression in older adults occurs
in a complex psychosocial and medical context and opportunities are
often missed to improve behavioral health and general medical outcomes
when mental disorders are under-recognized and undertreated in primary
care settings. We believe that it is therefore important to emphasize
the equal importance of the beneficiary's mental health and his or her
physical condition to successful discharge into the community. We
believe that AMA has confirmed our assessment by requiring those
reporting the CPT TCM codes to oversee the ``management and
coordination of services, as needed, for all medical conditions,
psychosocial needs and activity of daily living supports * * *'' The
AMA has also confirmed our assessment that patients typically require
complex and multidisciplinary care modalities in the post-discharge
period by establishing a requirement of moderate to high complexity for
reporting the CPT TCM codes. We do not believe that it is necessary to
add a formal requirement for communication between the accepting
primary care/community physician and the discharging inpatient
physician. The accepting community physician is responsible for
reviewing the discharge summary, and the community physician can decide
whether standard clinical practice indicates the need for further
communication with the discharging physician. However, as indicated
above, we note our expectation that the discharging physician will
communicate with the community physician as necessary as part of
billing for discharge day management services.
Comment: Some commenters recommended that we create disease
specific TCM codes for major chronic conditions (for example,
Alzheimer's, diabetes, HIV, cancer survivors planning services, etc.)
or for special services (for example, comprehensive medication
management services). The commenters were concerned that, otherwise,
many cognitive specialists and other practitioners would not be able to
bill the proposed TCM G-code.
Response: With regard to treatment of the chronic conditions
mentioned by commenters, both our proposed TCM G-code and the CPT TCM
codes we are adopting in this final rule are defined broadly enough to
incorporate the TCM activities involved in the treatment of patients
with such diseases in the period after discharge. In addition, as we
discuss below, we will be considering adoption of the complex care
coordination codes developed by the AMA as we continue to explore
payment for primary care services in future rulemaking. With regard to
the TCM codes, we indicated in the proposed rule that we proposed the
TCM G-code to recognize the services related to TCM by a community
physician or qualified nonphysician practitioner. We used the term
community physician and practitioner to refer to the community-based
physician managing and coordinating a beneficiary's care in the post-
discharge period. We also indicated that we anticipated that most
community physicians would be primary care physicians and
practitioners. This is because the nature of the services involved in
TCM (for example, communication with patient and family education to
support self-management, independent living, and activities of daily
living, assessment and support for treatment regimen adherence and
medication management, etc.) are characteristic of primary care
services as such services are usually understood. At the same time,
neither the TCM G-code we proposed, nor the CPT TCM codes we are
adopting in this final rule, preclude cognitive or other specialists
from reporting these codes when they are appropriately furnishing the
required primary care services of TCM. We certainly want to encourage
cognitive and other specialists to assume responsibility for the
comprehensive care of patients contemplated in the requirements of the
CPT TCM codes when they are in the position to do so during the post-
discharge period.
Comment: A few commenters recommended that there should be special
TCM G-codes for psychologists and others who are not permitted to bill
E/M codes.
Response: The TCM service includes ``the management and/or
coordination of services, as needed, for all medical conditions,
psychosocial needs and activities of daily living.'' For reasons we
have discussed at length above, the services described in the CPT E/M
codes are intrinsic to furnishing the TCM service. It was for this
reason that the AMA decided to include a post-discharge, face to face
E/M service as a requirement for reporting the CPT TCM codes. We have
had a longstanding restriction on the use of E/M codes by clinical
psychologists. As we have explained in previous rulemaking (62 FR
59057), the evaluation and management services included in the codes
that psychologists cannot bill are services involving medical
evaluation and management. Psychologists are not licensed to perform
these types of services. Therefore, we do not believe it would be
appropriate to provide a special TCM G-code for these practitioners.
However, we would expect the community physicians and qualified
nonphysician practitioners to refer patients to psychologists and other
mental health professionals as part of the TCM service when doing so is
warranted by evaluation of patients' psychosocial needs in the period
after discharge. As indicated above, we believe the only nonphysician
practitioners who may furnish the full range of E/M services and
complete medical management of a patient under their Medicare benefit
are NPs, PAs, CNSs, and CNMs, unless they are otherwise limited by
their state scope of practice. Other nonphysician practitioners or
limited-license practitioners, (such as optometrists, podiatrists,
doctors of dental surgery or

[[Page 68989]]

dental medicine), are limited by the scope of their state licensing or
their Medicare benefit from furnishing comprehensive medical evaluation
and management services. As already discussed, we consider these TCM
services to be a short-term initiative as we further consider
alternatives to target payment for primary care services.
Comment: Some commenters cited our statement that the proposed TCM
G-code may be used ``[d]uring transitions in care from hospital
(inpatient stay, outpatient observation, and partial hospitalization),
SNF stay, or CMHC settings to community-based care.'' The commenters
stated that this statement seems to avoid the reality that in many
instances the transition from a hospital to a facility such as a SNF
is, for all intents and purposes, the transition back to the community
for many patients.
Response: Individuals in SNFs are considered inpatients, and
therefore the TCM codes may not be billed when patients are discharged
to a SNF. For patients in SNFs there are E/M codes for initial,
subsequent, discharge care, and the visit for the annual facility
assessment, specifically CPT codes 99304-99318. These codes may be
billed for SNF beneficiaries for the care management services they
receive in the period after discharge from an acute care hospital. And
then when SNF patients are discharged from the SNF to the community or
to a nursing facility (even when the SNF and nursing facility are part
of the same entity or located in the same building), the physician or
practitioner who furnishes transitional care management services can
use the CPT TCM codes to bill for those services. As such, we believe
there will be appropriate payment for transitional care management
services furnished following each transition of care from acute
inpatient, to SNF, to the community or nursing facility setting.
After considering all these comments, and for the reasons stated
above we are adopting the CPT TCM codes subject to the modifications
described in our responses to comments on the issues discussed above.
In summary, these specific modifications are: Our decision not to
restrict the billing of the CPT TCM codes to established patients, our
clarification of the post-discharge service period, and our prohibition
against billing a discharge day management service on the same day that
a required E/M visit is furnished under the CPT TCM codes for the same
patient. We will provide guidance to contractors and revise the
relevant manual provisions in order to implement these policies.
Below are the requirements of the CPT TCM codes as modified for
Medicare purposes in this final rule.
99495 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of at least moderate complexity during
the service period.
++ Face-to-face visit, within 14 calendar days of discharge.
99496 Transitional Care Management Services with the
following required elements:
++ Communication (direct contact, telephone, electronic) with the
patient and/or caregiver within 2 business days of discharge.
++ Medical decision making of high complexity during the service
period.
++ Face-to-face visit, within 7 calendar days of discharge.
CPT codes 99495 and 99496 are used to report transitional care
management services. These services are for a patient whose medical
and/or psychosocial problems require moderate or high complexity
medical decision making during transitions in care from an inpatient
hospital setting (including acute hospital, rehabilitation hospital,
long-term acute care hospital), partial hospital, observation status in
a hospital, or skilled nursing facility/nursing facility, to the
patient's community setting (home, domiciliary, rest home, or assisted
living). Transitional care management commences upon the date of
discharge and continues for the next 29 days.
Transitional care management is comprised of one face-to-face visit
within the specified time frames, in combination with non-face-to-face
services that may be performed by the physician or other qualified
health care professional and/or licensed clinical staff under his or
her direction. It is our expectation that the services in the two lists
of non-face-to-face services below will be routinely provided as part
of transitional care management service unless the practitioner's
reasonable assessment of the patient indicates that a particular
service is not medically indicated or needed.
Non-face-to-face services provided by clinical staff, under the
direction of the physician or other qualified health care professional,
may include:
Communication (direct contact, telephone, electronic) with
the patient and/or caregiver within 2 business days of discharge.
Communication with home health agencies and other
community services utilized by the patient.
Patient and/or family/caretaker education to support self-
management, independent living, and activities of daily living.
Assessment and support for treatment regimen adherence and
medication management.
Identification of available community and health
resources.
Facilitating access to care and services needed by the
patient and/or family.
Non-face-to-face services provided by the physician or other
qualified health care provider may include:
Obtaining and reviewing the discharge information (for
example, discharge summary, as available, or continuity of care
documents).
Reviewing need for or follow-up on pending diagnostic
tests and treatments.
Interaction with other qualified health care professionals
who will assume or reassume care of the patient's system-specific
problems.
Education of patient, family, guardian, and/or caregiver.
Establishment or reestablishment of referrals and
arranging for needed community resources.
Assistance in scheduling any required follow-up with
community providers and services.
Transitional care management requires a face-to-face visit, initial
patient contact, and medication reconciliation within specified time
frames. The first face-to-face visit is part of the transitional care
management service and not reported separately. Additional E/M services
after the first face-to-face visit may be reported separately.
Transitional care management requires an interactive contact with the
patient or caregiver, as appropriate, within 2 business days of
discharge. The contact may be direct (face-to-face), telephonic, or by
electronic means. telephonic, or by electronic means. Medication
reconciliation and management must occur no later than the date of the
face-to-face visit.
Medical decision making and the date of the first face-to-face
visit are used to select and report the appropriate transitional care
management code. For 99496, the face-to-face visit must occur within 7
calendar days of the date discharge and medical decision making must be
of high complexity. For 99495, the face-to-face visit must occur within
14 calendar days of the date of discharge and medical decision making
must be of at least moderate complexity.

[[Page 68990]]

Medical decision making is defined by the E/M Services Guidelines.
The medical decision making over the service period reported is used to
define the medical decision making of transitional care management.
Documentation includes the timing of the initial post discharge
communication with the patient or caregivers, date of the face-to-face
visit, and the complexity of medical decision making.
(The E/M Services Guidelines define levels of medical decision
making on the basis of the following factors:
The number of possible diagnoses and/or the number of
management options that must be considered;
The amount and/or complexity of medical records,
diagnostic tests, and/or other information that must be obtained,
reviewed, and analyzed; and
The risk of significant complications, morbidity, and/or
mortality as well as comorbidities associated with the patient's
presenting problem(s), the diagnostic procedure(s), and/or the possible
management options.

Medical decision making of moderate complexity requires multiple
possible diagnoses and/or the management options, moderate complexity
of the medical data (tests, etc.) to be reviewed, and moderate risk of
significant complications, morbidity, and/or mortality as well as
comorbidities. Medical decision making of high complexity requires an
extensive number of possible diagnoses and/or the management options,
extensive complexity of the medical data (tests, etc.) to be reviewed,
and a high risk of significant complications, morbidity, and/or
mortality as well as comorbidities)
Only one individual may report these services and only once per
patient within 30 days of discharge. Another transitional care
management service may not be reported by the same individual or group
for any subsequent discharge(s) within the 30 days. The same individual
may report hospital or observation discharge services and transitional
care management. The same individual should not report transitional
care management services provided in the post-operative period for a
service with a global period.
A physician or other qualified health care professional who reports
codes 99495, 99496 may not report care plan oversight services (99339,
99340, 99374-99380), prolonged services without direct patient contact
(99358, 99359), anticoagulant management (99363, 99364), medical team
conferences (99366-99368), education and training (98960-98962, 99071,
99078), telephone services (98966-98968, 99441-99443), end stage renal
disease services (90951-90970), online medical evaluation services
(98969, 99444), preparation of special reports (99080), analysis of
data (99090, 99091), complex chronic care coordination services
(99481X-99483X), medication therapy management services (99605-99607),
during the time period covered by the transitional care management
services codes.
It is very important to emphasize that we consider the non-face-to-
face services to be furnished by physicians, qualified health care
professionals, and clinical staff to be intrinsic, indeed essential,
components of the TCM codes. To support the non-face-to-face services,
the TCM service requires a face-to-face visit, initial patient contact,
and medication reconciliation within specified time frames. The first
face-to-face visit is part of the TCM service and may not be reported
separately. Additional reasonable and necessary E/M services required
for managing the beneficiary's clinical issues in addition to the face-
to-face visit may be reported separately.
Despite the importance of the face-to-face service that is a
required element of the CPT TCM codes, the non-face-to-face services
such as communication, referrals, education, identification of
community resources, and medication management constitute the truly
essential features that distinguish TCM from those services that are
predominantly or exclusively face-to-face in nature.
We are adopting these new CPT TCM codes to provide a separate
reporting mechanism for the community physician for these services in
the context of the broader CMS multi-year strategy to recognize and
support primary care and care management. Therefore, we plan to monitor
the use of the transitional care management billing codes. We wish to
emphasize again that the policies we are finalizing in this final rule
may be short-term payment strategies that may be modified and/or
revised over time to be consistent with broader primary care and care
management initiatives. Because CPT TCM codes 99495 and 99496 are new
codes, they will be valued and designated as interim final in this
final rule with comment period and subject to public comment.
We would also note that this proposal coincides with our discussion
under section III.J. of this final rule with comment period on the
Value-based Payment Modifier and Physician Feedback Reporting Program
which discusses hospital admission measures and a readmission measure
as outcome measures for the proposed value-based payment modifier
adjustment beginning in CY 2015.
c. Proposed Payment for Post-Discharge Transitional Care Management
Service
To establish a physician work relative value unit (RVU) for the
proposed post-discharge TCM, HCPCS code GXXX1, we compared GXXX1 with
CPT code 99238 (Hospital discharge day management; 30 minutes or less)
(work RVU = 1.28). We recognized that, unlike CPT code 99238, HCPCS
code GXXX1 is not a face-to-face visit. However, we believed that the
physician time and intensity involved in post-discharge community care
management is most equivalent to CPT code 99238 which, like the
proposed new G code, involves a significant number of care management
services. Therefore, we proposed a work RVU of 1.28 for HCPCS code
GXXX1 for CY 2013. We also proposed the following physician times: 8
minutes pre-evaluation; 20 minutes intra-service; and 10 minutes
immediate post-service. In addition, we proposed to crosswalk the
clinical labor inputs from CPT code 99214 (Level 4 established patient
office or other outpatient visit) to proposed HCPCS code GXXX1. For
malpractice expense, we proposed a malpractice crosswalk of CPT code
99214 for HCPCS code GXXX1 for CY 2013. We believe the malpractice risk
factor for CPT code 99214 appropriately reflects the relative
malpractice risk associated with furnishing HCPCS code GXXX1. In our
proposal, we noted that, as with other services paid under the PFS, the
20 percent beneficiary coinsurance would apply to the post-discharge
TCM service as would the Part B deductible.
Comment: Several commenters recommended that we await the
recommendations of the RUC and accept the RUC RVU values, so that we
can fully take into account feedback from practicing physicians of all
specialties before finalizing values for these non-face-to-face, care
management services. With regard to the proposed RVU for physician
work, a few commenters noted that our source code for GXXX1 included
only 30 minutes of work for the discharging physician for whom most of
the information is more readily available and that that time
understates the effort required of the receiving physician. The
commenters urged us to consider the significant potential variability
in time and effort for the receiving physician. Another commenter urged
CMS to utilize the

[[Page 68991]]

work RVUs used for care plan oversight HCPCS codes G0181 and G0182 in
valuing the new code.
With regard to PE, another commenter recommended that we assign
clinical staff type RN/LPN only for the clinical staff work for the TCM
codes because those are the only two clinical staff types who furnish
clinical staff TCM activities. A commenter noted that this proposal
largely ignores equipment costs (for example, computer, electronic
health record, and telephone) that are essential to furnishing this
service, and urged us to reconsider whether 1.41 is an appropriate
practice expense RVU amount. Another commenter noted that our source
code for practice expense, CPT code 99214, is for moderate complexity
decision-making and that we should consider the greater costs
associated with a patient of high complexity. One commenter agreed with
our proposed malpractice value.
Response: We agree with commenters that any valuation under the PFS
should benefit from as much public review and input as possible,
including review by the AMA RUC. The AMA RUC conducted a multi-
specialty survey of 110 physicians and recommended an RVU for each of
the new CPT TCM codes. For CPT code 99495, the AMA RUC recommended the
median survey work RVU of 2.11 with 40 minutes of intra-service time,
and for CPT code 99496, the AMA RUC recommended the median work RVU of
3.05 with 60 minutes of intra-service time. For CPT code 99496, we
disagree with the observed median intra-service time of 60 minutes. We
believe that 50 minutes of intra-service time is a more appropriate
intra-service time for CPT code 99496. We observe that the primary
reference code for CPT code 99495, CPT code 99214, has 25 minutes of
intra-service time. We conclude that the typical physician time
engaging in additional non-face-to-face activities and overseeing
clinical staff care management activities is the difference between the
intra-service time for CPT code 99214 and median intra-service time for
CPT code 99495, 15 minutes. We believe that 50 minutes of intra-service
time is more appropriate for CPT codes 99496 because it adds the
additional non-face-to-face care management time of 15 minutes, to the
intra-service time for the primary reference CPT code 99496, which is
CPT code 99215 with an intra-service time of 35 minutes.
We appreciate comments suggesting that we value our proposed G-
code, GXXX1, comparable to CPT codes G0180 and G0181. However, because
we not finalizing the proposed G-codes and instead are adopting the CPT
TCM codes on an interim final basis in this final rule with comment
period, we believe that the AMA RUC recommendation, which reflects the
services we included in the proposed G-code as well as a face-to-face
visit, is a more basis for appropriate valuation. In response to
comments noting that the discharge day management source code, CPT code
99238, for GXXX1, does not contain sufficient time for the receiving
physician and that the time does not reflect differences in the
complexity of decision-making, we note that we are adopting AMA RUC
recommended times as modified in the preceding paragraph on an interim
final basis, with refinement, which include a longer time than the
proposed time of 30 minutes, and those times are specific to the level
of complexity. We also note that there is a significant amount of
clinical labor time incorporated in the practice expense calculation
for these codes. In summary, we are assigning a work RVU of 2.11 to CPT
TCM code 99495 with intra-service time of 40 minutes, and a work RVU of
3.05 with intra-service time of 50 minutes. The work RVUs included in
Addendum B to this final rule with comment period reflect these interim
final values. The physician time file associated with this PFS final
rule with comment period is available on the CMS Web site in the
Downloads section for the CY 2013 PFS final rule with comment period at
www.cms.gov/PhysicianFeeSched/.
Consistent with our policy discussed in section II.C.1. of this
final rule with comment period for assigning malpractice RVUs, we
developed malpractice RVUs for the new CPT TCM codes. For CPT code
99495, the AMA RUC recommended a malpractice risk factor crosswalk to
CPT code 99214, resulting in a malpractice RVU of 0.14 for CPT code
99495. For CPT code 99496, the AMA RUC recommended a malpractice risk
factor crosswalk to CPT code 99215, resulting in a malpractice RVU of
0.20 for CPT code 99496. We are accepting the AMA RUC's recommended
malpractice crosswalks for CPT codes 99495 and 99496 on an interim
final basis. We appreciate comments in support of our proposed
malpractice value for our non-face-to-face G-code, GXXX1, of 0.09. We
believe that the interim final malpractice crosswalks recommended by
the AMA RUC provide appropriate malpractice values for the CPT TCM
codes, which include a face-to-face visit.
For practice expense, we are accepting the AMA RUC-recommended
practice expense inputs for these codes with one refinement to clinical
labor time for CPT code 99496. We are refining the 60 minutes of
recommended clinical labor time for a RN/LPN nurse blend dedicated to
non-face-to-face care management activities from 60 minutes to 70
minutes. We believe that the total clinical labor staff time and
physician intra-service work time that the AMA RUC-recommended for non-
face-to-face care management activities was accurate, but that the
proportionality between physician work and clinical staff time should
be refined to reflect greater clinical staff time. In response to the
comment on appropriate clinical staff type for non-face-to-face care
management services, we note that we are accepting the AMA RUC
recommended clinical labor staff type of an RN/LPN for conducting non-
face-to-face care coordination activities. The AMA RUC did not include
additional costs for computer, EHR, and telephone in their
recommendations. We believe accounting for the infrastructure required
to furnish advanced primary care services is an issue we will consider
as we pursue the broader HHS and CMS multi-year strategy to recognize
and support primary care and care management under the MPFS.
The CY 2013 final rule with comment period direct PE input database
reflects these inputs and is available on the CMS Web site under the
supporting data files for the CY 2013 PFS final rule with comment
period at www.cms.gov/PhysicianFeeSched/. The PE RVUs included in
Addendum B to this final rule with comment period reflect the RVUs that
resulted from adopting these interim final values.
For BN calculations, we estimated that physicians or qualified
nonphysician practitioners would furnish post-discharge TCM services
for 10 million discharges in CY 2013. We estimated that this number
roughly considers the total number of hospital inpatient and SNF
discharges, hospital outpatient observation services and partial
hospitalization patients that may require moderate to high complexity
decision-making following discharge.
Comment: Some commenters indicated that our estimate of the number
of claims we would receive for the transitional care services was
overstated. Using a different set of assumptions, the AMA RUC commented
that the number of billings would be closer to 2 million per year. The
AMA RUC provided us with detailed utilization assumptions for the CPT
TCM codes. These detailed utilization assumptions indicated physicians
would bill 2,166,719 claims in CY 2013 for the CPT TCM codes, with 60
percent of those claims for CPT TCM code99495

[[Page 68992]]

and 40 percent for CPT TCM code99496. Commenters also indicated that we
should offset the cost of the TCM codes in our BN calculation with
savings from reduced readmissions to hospitals and other facilities.
Response: The estimate of the number of billings we will receive in
CY 2013 for TCM services is sensitive to the utilization assumptions
used and cannot be easily derived from existing codes. The number of
discharge day management visits that are billed to Medicare is
approximately 10 million. As reflected in the RUC recommendations, we
agree with commenters that this is a reasonable starting point in the
development of the estimate for the number of billings for the TCM
services.
The next step is to determine how many of these discharges will be
readmissions in CY 2013. Since the patient would only be eligible for
one TCM service associated with a hospital discharge and the later
readmission, we are not counting the readmission in our utilization
estimate. The AMA RUC used an estimate of 19.6 percent. We disagree
with this estimate. More recent work by MedPAC indicates that the all
cause readmission rate was closer to 15 percent in CY 2011.\2\
Accordingly, we adopted a 15 percent readmission rate.
---------------------------------------------------------------------------

\2\ MedPAC September 7, 2012 Public Meeting Transcript, page 94,
at http://medpac.gov/transcripts/092012_transcript.pdf, or slide 4
at http://www.medpac.gov/transcripts/readmissions%20Sept%2012%20presentation.pdf.
---------------------------------------------------------------------------

The AMA RUC also cited a variety of factors that it believes will
reduce the number of billings from the universe of discharges,
including the number of patients requiring moderate or high complexity
decision-making based on the percentage of high cost Medicare patients
in the Medicare population, the number of patients currently seen
within 14 days of discharge, discharges where the primary care
physician didn't know patient was in the hospital, cases where the
patient couldn't be contacted or seen, cases where the patient died,
cases where the patient changed doctors or didn't see the primary care
doctor, and cases for which physicians will not furnish the TCM service
as rapidly as we have assumed. The AMA RUC provided assumptions about
the number of discharges it believes will not result in the billing of
a TCM service. We have posted the AMA RUC calculation on our Web site
at www.cms.gov/PhysicianFeeSched/. While we generally agree that some
of these factors will impact the billings for the TCM code, we believe
that the construct of the RUC estimate with assumed exact values for
each and every one of these factors understates the likely TCM
billings.
In considering this and similar comments, we examined the current
distribution of the inpatient, observation, and nursing facility
evaluation and management codes. Within each of these families, we also
examined the severity of the presenting problems and the level of
complexity of the medical decision-making to help differentiate the
codes. We found that 85 percent of Hospital Observation and Initial and
Subsequent Hospital Care services (CPT codes 99218-99233) were at Level
2 or Level 3, generally indicating moderate to high severity and
complexity. We note that over 90 percent of place of service
designations for the discharge codes are inpatient or outpatient
hospital. We found that 43 percent of Nursing Facility Care services
(CPT codes 99304-99310) were at Level 2 or Level 3, generally
indicating moderate to high severity and complexity. Although less
relevant for the TCM policy, we also examined the Office or Other
Outpatient visits (CPT codes 99201-99213) as a point of comparison and
found that 41 percent of services were at Level 4 or Level 5, generally
indicating moderate to high severity and complexity.
In light of the data on the current severity and complexity levels
of the evaluation and management services, and after consideration of
the factors included in the AMA RUC estimate and removing 15 percent
for readmissions, we believe that two-thirds of the discharges
reflected in the discharge day management codes, are likely to result
in TCM claims. This represents approximately 5.7 million claims [=10
million discharges * (1-.15) for readmissions * (\2/3\) for severity
and other factors)].
We disagree with the RUC that 60 percent of those claims will be
for 99495 and 40 percent for 99496. In looking at the relationship
between the moderate and high Hospital Observation and Initial and
Subsequent Hospital Care services (CPT codes 99218-99233) and the
relationship between the moderate and high Nursing Facility Care
services (99304-99310), we believe a more reasonable estimate is that
75 percent of the TCM claims will be for 99495 and 25 percent for
99496.
Because the practice expense RVUs for the transitional care codes
will vary depending on whether or not the service is billed in a
facility or non-facility setting, we also need to further refine the
estimate to determine the proportion of TCM services that will be paid
at the facility rate versus the non-facility rate. After examining the
facility and non-facility distribution of the 99214 and 99215 visit
codes billed by primary care specialties, we believe that 92 percent of
the TCM services will be billed in the non-facility setting.
Lastly, we agree with the RUC that 26 percent of patients had at
least one visit within 7 calendar days of discharge and 44 percent had
one within 14 days of discharge. Because these are existing visits that
will potentially now be billed as part of the TCM service, we partially
offset the cost of the TCM services with the cost of the existing
visits assumed to be billed as part of the CPT TCM code.
For the comments requesting that we also offset the cost of the CPT
TCM codes in our BN calculation with savings from reduced readmissions,
there are currently many efforts underway to reduce hospital
readmissions. We do not believe that it would be possible to isolate
the effect of payment for TCM services on the readmission rate.
Furthermore, the statute does not permit costs or savings from outside
of the physician fee schedule to be used in the physician fee schedule
BN calculation.
For purposes of the Primary Care Incentive Payment Program (PCIP),
we proposed to exclude the post discharge TCM services from the total
allowed charges used in the denominator calculation to determine
whether a physician is a primary care practitioner. Under section
1833(x) of the Act, the PCIP provides a 10 percent incentive payment
for primary care services within a specific range of E/M services when
furnished by a primary care practitioner. Specific physician
specialties and qualified nonphysician practitioners can qualify as
primary care practitioners if 60 percent of their PFS allowed charges
are primary care services. As we explained in the CY 2011 PFS final
rule (75 FR 73435-73436), we do not believe the statute authorizes us
to add codes (additional services) to the definition of primary care
services. However, to avoid inadvertently disqualifying community
primary care physicians who follow their patients into the hospital
setting, we finalized a policy to remove allowed charges for certain E/
M services furnished to hospital inpatients and outpatients from the
total allowed charges in the PCIP primary care percentage calculation.
In the proposed rule, we also proposed that the TCM code should be
treated in the same manner as those services for the purposes of PCIP
because post-discharge TCM services are a complement in the community
setting to the hospital-based discharge day management services already

[[Page 68993]]

excluded from the PCIP denominator. Similar to the codes already
excluded from the PCIP denominator, we expressed concern that inclusion
of the TCM code in the denominator of the primary care percentage
calculation could produce unwarranted bias against ``true primary care
practitioners'' who are involved in furnishing post-discharge care to
their patients. Therefore, while physicians and qualified nonphysician
practitioners who furnish TCM services would not receive an additional
incentive payment under the PCIP for the service itself (because it is
not considered a ``primary care service'' for purposes of the PCIP),
the allowed charges for TCM services would not be included in the
denominator when calculating a physician's or practitioner's percent of
allowed charges that were primary care services for purposes of the
PCIP.
Comment: Some commenters recommended that the proposed TCM G-codes
should be eligible for the PCIP. The commenters acknowledged that, to
add our proposed G-code to the codes eligible for PCIP, we would have
to revise our previous interpretation concerning the extent of the
Secretary's discretion to modify the list of primary care E/M services
eligible for PCIP. However, the commenters stated that our previous
interpretation of the statutory language was incorrect, or at least not
the only reasonable interpretation of the statutory language. A few
commenters opposed excluding the allowed charges for TCM services from
the denominator of the ratio used to determine qualification for the
PCIP.
Response: We continue to believe that the statute does not permit
us to add codes (additional services) to the statutory definition of
primary care services, which is a range of E/M services including
office visits. The new CPT TCM codes fall outside the designated range
of codes that qualify for the PCIP. Therefore, we cannot agree with
those commenters who contended that it is permissible to add the new
TCM codes to the list of codes eligible for PCIP. However, to avoid
disadvantaging physicians who furnish post-discharge TCM services to
their patients, we are finalizing our proposal to exclude the allowed
charges for TCM services from the denominator when calculating a
physician's or practitioner's percent of allowed charges that were
primary care services for purposes of the PCIP.
Comment: Many commenters urged us not to apply the 20 percent
beneficiary coinsurance to TCM services. Some commenters stated a
belief that we should categorize TCM as a preventive service and that
we should therefore waive the coinsurance for the service. Other
commenters expressed concern that beneficiaries will not understand
their coinsurance liability for this service, since our proposed new
post-discharge TCM G-code would not include a face-to-face visit. Some
commenters were also concerned that this confusion would lead to
increased bad debt for physicians and qualified NPPs billing the CPT
TCM codes. Others urged us to work with the Congress to enact
legislation to waive the beneficiary coinsurance for post-discharge
care management services. On the other hand, some commenters noted that
requiring a face-to-face E/M visit when billing the TCM code would
reduce potential beneficiary confusion about the coinsurance for the
TCM service.
Response: We appreciate the reasons commenters have offered for
waiving the beneficiary coinsurance for TCM as a preventive service.
However, we do not believe we have authority to do so through the
rulemaking process. This is because section 1861(ddd)(1)(B) of the Act
requires, among other criteria, that ``additional preventive services''
can be added only if such services are recommended with a grade of A or
B by the United States Preventive Services Task Force. We lack such a
recommendation regarding the services described by the new CPT TCM
codes. As we have discussed above, we agree with those commenters who
observed that requiring a face-to-face E/M visit when billing the TCM
code would reduce potential beneficiary confusion about the coinsurance
for the TCM service. Now that we have modified our proposal for a TCM
service to include a face-to-face service, beneficiaries will
experience a face-to-face encounter to which they can relate their
copayments for the service. We therefore believe that our adoption of
the CPT TCM codes that include a required face-to-face visit as a
component of the service will greatly reduce the potential for
beneficiary confusion over the coinsurance for the service and the
possibility of increased bad debt for physicians.
2. Primary Care Services Furnished in Advanced Primary Care Practices
a. Background
As we discussed above, we are committed to considering new options
and developing future proposals for payment of primary care services
under the MPFS. Such options would promote comprehensive and continuous
assessment, care management, and attention to preventive services that
constitute effective primary care by establishing appropriate payment
when physicians furnish such services. One potential method for
ensuring that any targeted payment for primary care services would
constitute a minimum level of care coordination and continuous
assessment under the MPFS would be to pay physicians for services
furnished in an ``advanced primary care practice'' that has implemented
a medical home model supporting patient-specific care. The medical home
model has been the subject of extensive study in medical literature.
Since 2007, the AMA, American Academy of Family Physicians (AAFP), the
American Academy of Pediatrics (AAP), the American College of
Physicians (ACP), and the American Osteopathic Association (AOA), and
many other physician organizations have also endorsed ``Joint
Principles of the Patient-Centered Medical Home.'' In February 2011,
the AAFP, the AAP, the ACP, and AOA also published formal ``Guidelines
for Patient-Centered Medical Home (PCMH) Recognition and Accreditation
Programs'' to develop and promote the concept and practice of the PCMH.
(These guidelines are available at www.aafp.org/online/etc/medialib/aafp_org/documents/membership/pcmh/pcmhtools/pcmhguidelines.Par.0001.File.dat/GuidelinesPCMHRecognitionAccreditationPrograms.pdf.) As we have
discussed above, the Innovation Center has been conducting several
initiatives based on the medical home concept.
The medical home concept emphasizes establishing an extensive
infrastructure requiring both capital investments and new staffing,
along with sophisticated processes, to support continuous and
coordinated care with an emphasis on prevention and early diagnosis and
treatment. The literature, reports, and guidelines dealing with the
medical home concept define the requisite elements or functions that
constitute this infrastructure and processes in various ways. For
example, the Innovation Center's CPC initiative identified a set of
five ``comprehensive primary care functions,'' which form the service
delivery model being tested and the required framework for practice
transformation under the CPC initiative. In the proposed rule (77 FR
44780), we discussed these five ``comprehensive primary care
functions'' as an appropriate starting point for discussing the
incorporation of the comprehensive primary care services delivered in
advanced primary care practices (practices implementing a medical home
model) into the MPFS. These five

[[Page 68994]]

functions are: Risk-stratified care management, access and continuity,
planned care for chronic conditions and preventive care, patient and
caregiver engagement, and coordination of care across the medical
neighborhood. (See our detailed discussion of these functions at the
citation noted above.)
In the proposed rule, we also discussed the need to establish a set
of parameters to determine whether or not a clinical practice could be
considered an advanced primary care practice (medical home) in the
event that we were to establish an enhanced payment for primary care
services furnished to Medicare beneficiaries in an advanced primary
care practice environment. (77 FR 44781-44782) Specifically, we
discussed two possible approaches to determining whether a practice has
implemented all the necessary functions to be considered an advanced
primary care practice or medical home. One approach would be to
recognize one or more of the nationally available accreditation
programs currently in use by major organizations that provide
accreditation for advanced primary care practices, frequently
credentialed as ``PCMHs.'' We identified four national models that
provide accreditation for organizations wishing to become an advanced
primary care practice; the Accreditation Association for Ambulatory
Health, The Joint Commission, the NCQA, and the Utilization Review
Accreditation Commission (URAC). Alternatively, we could develop our
own criteria using, for example, the five functions of comprehensive
primary care used in the CPC initiative and described above, to
determine what constitutes advanced primary care for purposes of
Medicare payment. We would then need to develop a process for
determining whether specific physician practices meet the criteria for
advanced primary care. This could include creating our own processes
for review or could include using existing accrediting bodies to
measure compliance against advanced primary care criteria determined by
CMS.
We also discussed another potential issue surrounding comprehensive
primary care services delivered in an advanced primary care practice,
specifically attribution of a beneficiary to an advanced primary care
practice. (77 FR 44782) In a fee-for-service environment we would need
to determine which practice is currently serving as the advanced
primary care practice for the beneficiary to ensure appropriate
payment. One method of attribution could be that each beneficiary
prospectively chooses an advanced primary care practice. Other
attribution methodologies might examine the quantity and type of E/M or
other designated services furnished to that beneficiary by the
practice. We welcomed input on the most appropriate approach to the
issue of how to best determine the practice that is functioning as the
advanced primary care practice for each beneficiary. We emphasized that
we would not consider proposals that would restrict a beneficiary's
free choice of practitioners.
In summary, we stated our belief that targeting primary care
management payments to advanced primary care practices could have many
merits, including ensuring a basic level of care coordination and care
management. We recognize that the advanced primary care model has
demonstrated efficacy in improving the value of health care in several
contexts, and we are exploring whether we can achieve these outcomes
for the Medicare population through several demonstration projects.
Careful analysis of the outcomes of these demonstration projects will
inform our understanding of how this model of care affects the Medicare
population and of potential PFS payment mechanisms for these services.
At the same time, we also believe that there are many policy and
operational issues to be considered when nationally implementing such a
program within the PFS. Therefore, we generally invited broad public
comment on the accreditation and attribution issues discussed above and
any other aspect, including payment, of integrating an advanced primary
care model into the PFS.
We received many helpful and informative comments on the issues we
discussed in relation to recognizing advanced primary care practices,
especially on the criteria and processes that should be used to
identify such practices. We welcome these comments because we are
actively considering such an advanced primary care practice model in
the near future after a complete assessment of the results of ongoing
demonstrations and policy and operational considerations.
We also received many comments recommending that we adopt the
complex care coordination codes developed by the AMA's C3W for CY 2013.
As discussed in section III.M.3.a. of this final rule with comment
period, on an interim final basis for CY 2013, we are assigning CPT
codes 99487, 99488, and 99489 a PFS procedure status indicator of B
(Payments for covered services are always bundled into payment for
other services, which are not specified. If RVUs are shown, they are
not used for Medicare payment. If these services are covered, payment
for them is subsumed by the payment for the services to which they are
bundled (for example, a telephone call from a hospital nurse regarding
care of a patient). We will consider these codes, as well as other
payment approaches as we continue our multi-year strategy to recognize
and support primary care and care management.

I. Payment for Molecular Pathology Services

The AMA CPT Editorial Panel has created new CPT codes to replace
the codes used to bill for molecular pathology services that will be
deleted at the end of CY 2012. The new codes describe distinct
molecular pathology tests and test methods. CPT divided these molecular
pathology codes into Tiers. Tier 1 codes describe common gene-specific
and genomic procedures. Tier 2 codes capture reporting for less common
tests. Each Tier 2 code represents a group of tests that the CPT
Editorial Panel believes involve similar technical resources and
interpretive work. The CPT Editorial Panel created 101 new molecular
pathology CPT codes for CY 2012 and another 14 new molecular pathology
codes for CY 2013.
We stated in our notice for the Clinical Laboratory Fee Schedule
(CLFS) Annual Public Meeting held on July 16, 2012 (77 FR 31620) that
we were following our regular process to determine the appropriate
basis and payment amounts for new clinical diagnostic laboratory tests,
including molecular pathology tests, under the CLFS for CY 2013.
However, we also stated that we understand stakeholders in the
molecular pathology community continue to debate whether Medicare
should pay for molecular pathology tests under the CLFS or the PFS.
Medicare pays for clinical diagnostic laboratory tests through the CLFS
and for services that ordinarily require physician work through the
PFS. We stated that we believed we would benefit from additional public
comments on whether these tests are clinical diagnostic laboratory
tests that should be paid under the CLFS or whether they are
physicians' services that should be paid under the PFS. Therefore, we
solicited public comment on this issue in the CY 2013 PFS proposed rule
(77 FR 44782 and 44783), as well as public comment on pricing policies
for these tests under the CLFS during the CLFS Annual Public Meeting
process.
In the PFS proposed rule, we first discussed and requested public
comment on whether these molecular pathology CPT codes describe
services

[[Page 68995]]

that ordinarily require physician work, and then we discussed our
proposal to address payment for these CPT codes on the PFS, pending
public comment and resolution of the first question. The PFS proposal
paralleled the CLFS Annual Public Meeting process during which we
receive comments and recommendations on the appropriate basis for
establishing a payment amount for the molecular pathology CPT codes as
clinical diagnostic laboratory tests under the CLFS.
As detailed in section II.B.1. of this final rule with comment
period, Medicare establishes payment under the PFS by setting RVUs for
work, practice expense (PE), and malpractice expense for services that
ordinarily require physician work. To establish RVUs for physician
work, we conduct a clinical review of the relative physician work (time
by intensity) required for each PFS service. This clinical review
includes the review of RVUs recommended by the American Medical
Association/Specialty Society Relative Value Scale Update Committee
(AMA RUC) and others. The AMA RUC-recommended work RVUs for a service
typically are based in part on results of a survey conducted by the
relevant specialty society. CMS establishes PE RVUs under a resource-
based PE methodology that considers the cost of direct inputs, as well
as indirect PE costs. The AMA RUC, through the Practice Expense
Subcommittee, recommends direct PE inputs to CMS, and the relevant
specialty societies provide pricing information for those direct inputs
to CMS. After we determine the appropriate direct PE inputs, the PE
methodology is used to develop PE RVUs. Physician work and PE RVUs for
each CPT code are constructed to reflect the typical case; that is,
they reflect the service as it is most commonly furnished (71 FR
69629). CMS establishes resource-based malpractice expense RVUs using
weighted specialty-specific malpractice insurance premium data
collected from commercial and physician-owned insurers, last updated
for the CY 2010 final rule (74 FR 61758). For most services paid under
the PFS, beneficiary cost-sharing is 20 percent of the fee schedule
payment amount.
CMS establishes a payment rate for new clinical diagnostic
laboratory tests under the CLFS by either crosswalking or gap-filling.
Crosswalking is used when a new test code is comparable to an existing
test code, multiple existing test codes, or a portion of an existing
test code on the CLFS. Under this methodology, the new test code is
assigned the local fee schedule amounts and the national limitation
amount (NLA) of the existing test, with payment made at the lesser of
the local fee schedule amount or the NLA. Gap-filling is used when no
comparable test exists on the CLFS. In the first year a test is gap-
filled, contractor-specific amounts are established for the new test
code using the following sources of information: Charges for the test
and routine discounts to charges; resources required to perform the
test; payment amounts determined by other payers; and charges, payment
amounts, and resources required for other tests that may be comparable
or otherwise relevant. For the second year, the NLA is calculated,
which is the median of the carrier-specific amounts. See Sec. 414.508.
Services paid under the CLFS do not account for any physician work,
although tests paid under the CLFS can involve assessment by a
laboratory technician/technologist, a chemist, molecular biologist, or
a geneticist--none of which are health care professional occupations
that meet the statutory definition of a physician. Although payments
can vary geographically due to contractor discretion across locality
areas (which are the same localities used for the GPCIs under the PFS),
payments cannot exceed a NLA, nor are they adjusted once rates are
determined (apart from inflation updates as required by statute). In
the CY 2008 PFS final rule with comment period, we adopted a
prospective reconsideration process for new tests paid under the CLFS,
allowing a single year for Medicare and stakeholders to review pricing
for new tests after a payment is initially established through
crosswalking, and in certain circumstances, up to 2 years for Medicare
and stakeholders to review pricing for new tests after a payment is
initially established through gap-filling (72 FR 66275 through 66279,
66401 through 66402). Finally, in almost all circumstances, there is no
beneficiary cost-sharing for clinical laboratory diagnostic tests paid
on the CLFS.
For a handful of clinical laboratory services paid under the CLFS,
we allow an additional payment under the PFS for the professional
services of a pathologist when they meet the requirements for a
clinical consultation service as defined in Sec. 415.130(c). The PFS
pays for services that ordinarily require the work of a physician and,
with regard to pathology services, explicitly pays for both the
professional and technical component of the services of a pathologist
as defined in Sec. 415.130(b), including surgical pathology,
cytopathology, hematology, certain blood banking services, clinical
consultations, and interpretive clinical laboratory services.
Molecular pathology tests are currently billed using combinations
of longstanding CPT codes that describe each of the various steps
required to perform a given test. This billing method is called
``stacking'' because different ``stacks'' of codes are billed depending
on the components of the furnished test. Currently, all of the stacking
codes are paid through the CLFS; and one stacking code, CPT code 83912
(molecular diagnostics; interpretation and report), is paid on both the
CLFS and the PFS. Payment for the interpretation and report of a
molecular pathology test when furnished and billed by a physician is
made under the PFS using the professional component (PC, or modifier
26) of CPT code 83912 (83912-26). Payment for the interpretation and
report of a molecular pathology test when furnished by nonphysician
laboratory professional is bundled into payment made under the CLFS
using CPT code 83912.
As we stated in the CY 2013 PFS proposed rule (77 FR 44783), since
the creation of new molecular pathology CPT codes, there has been
significant debate in the stakeholder community regarding whether these
new molecular pathology CPT codes describe physicians' services that
ordinarily require physician work and would be paid under the PFS, or
whether they describe clinical diagnostic laboratory tests that would
be paid on the CLFS. In the CY 2013 PFS proposed rule (77 FR 44783), we
stated that there is little agreement on whether the technical
component and/or professional component (interpretation and report) of
these services are ordinarily furnished by a physician or a
nonphysician laboratory professional. Additionally, we stated that some
stakeholders have suggested that interpretation and report by any
health care professional is generally not necessary for these services,
as the laboratory result reporting is becoming more automated.
In the CY 2012 PFS final rule with comment period (76 FR 73190), we
stated that for CY 2012, Medicare would continue to use the existing
stacking codes for the reporting and payment of these molecular
pathology tests, and that the new molecular pathology CPT codes would
not be valid for payment for CY 2012. We did this because we were
concerned that we did not have sufficient information to know whether
the new molecular pathology CPT codes describe clinical diagnostic
laboratory tests or services that ordinarily require physician work. In
the PFS proposed

[[Page 68996]]

rule, we stated that, for CY 2013, we continue to have many of the same
concerns that led us not to recognize the 101 molecular pathology CPT
codes for payment for CY 2012. We requested comment on whether the new
molecular pathology CPT codes describe physicians' services that should
be paid under the PFS, or whether they describe clinical diagnostic
laboratory tests that should be paid under the CLFS. We also requested
comment on the following more specific questions:
Do each of the 101 molecular pathology CPT codes describe
services that are ordinarily furnished by a physician?
Do each of these molecular pathology CPT codes ordinarily
require interpretation and written report?
What is the nature of that interpretation and does it
typically require physician work?
Who furnishes interpretation services and how frequently?
In the CY 2013 PFS proposed rule, we also proposed to price all of
the new molecular pathology CPT codes through a single fee schedule,
either the CLFS or the PFS. We stated that after meeting with
stakeholders and reviewing each CPT code, we believed that there are a
discrete number of laboratory methods used to generate results across
molecular pathology tests. For example, two different tests
(represented by different CPT codes) may be run using the same testing
methodologies, but using different genes. However, there are very
different processes for establishing payment rates under the PFS and
the CLFS. As discussed above, Medicare sets payment under the CLFS by
either crosswalking or gap-filling and, after the prospective
reconsideration process we do not adjust the payment amount further
(apart from inflation updates as required by statute). In contrast,
Medicare sets payment under the PFS through a set of resource-based
methodologies for physician work, PE, and malpractice expense, and
payment can be reviewed and adjusted as the resources required to
furnish a service change. We stated that we were concerned that
establishing different prices for comparable laboratory services across
two different payment systems would create a financial incentive to
choose one test over another simply because of its fee schedule
placement. We stated that we were also concerned that the differences
in prices would become more pronounced over time, as we continue to
review the values for physician work and PE inputs on the PFS relative
to established CLFS prices. Therefore, largely because of the
homogeneity of the laboratory methodologies behind these procedure test
codes, we stated that we believe that it is appropriate for all new
molecular pathology CPT codes to be priced on the same fee schedule
using the same methodology. We invited public comment on that proposal.
As we considered public comment on whether these molecular
pathology CPT codes describe services that ordinarily require physician
work, we wanted to ensure that there was a payment mechanism in place
to pay for these CPT codes for CY 2013, either on the PFS or the CLFS.
We stated that, because we believe that these molecular pathology CPT
codes may be clinical diagnostic laboratory tests payable on the CLFS,
comments and recommendations from the public on the appropriate basis
for establishing payment amounts on the CLFS would be discussed and
received through the CY 2013 CLFS Annual Public Meeting process. More
information on these tests is available on the CMS Web site at
www.cms.hhs.gov/ClinicalLabFeeSched.
As a parallel to determining the appropriate basis and payment
amounts for the molecular pathology CPT codes as clinical diagnostic
laboratory tests through the CLFS Annual Public Meeting process, we
also proposed payment for these codes under the PFS for CY 2013. In the
CY 2013 PFS proposed rule, we stated that the AMA RUC and the College
of American Pathologists (CAP) provided CMS with recommendations for
physician work RVUs and PE inputs for most of the molecular pathology
CPT codes. We did not have recommendations on physician work RVUs or
direct PE inputs for a small number of codes, which represent tests
that are patented, and therefore the methodology used to furnish the
test is proprietary and was unavailable to the AMA RUC or CMS to
support developing appropriate work and direct PE inputs. As we stated
in the PFS proposed rule, the AMA RUC-recommended physician work RVUs
range from 0.13 to 2.35, with a median work RVU of 0.45. The AMA RUC-
recommended physician intra-service times (which, for these codes,
equals the total times) range from 7 minutes to 80 minutes, with a
median intra-service time of 18 minutes. We noted that the physician
work RVU for CPT code 83912-26 and all but one of the other clinical
diagnostic laboratory services for which CMS recognizes payment for
clinical interpretation is 0.37. Table 27 lists AMA RUC-recommended
physician work RVUs and times, as well as the AMA RUC-estimated CY 2013
utilization for these codes. This table contains the AMA RUC's
estimated CY 2013 utilization for all 115 molecular pathology codes
effective for CY 2013 and recommended physician work RVUs and times
only for those codes that CAP believes are ordinarily performed by a
physician. These values are listed for reference only and were not used
for PFS rate-setting.
As we stated in the PFS proposed rule, molecular pathology tests
can be furnished in laboratories of different types and sizes (for
example, a large commercial laboratory, academic or research
laboratory, typically hospital-based, or potentially, a pathology group
practice), and tests may be furnished in small or large batches. Also,
although there are largely homogenous methods across the different
tests considered here, we recognize that for a specific test, the
combination of methods may vary across different laboratories. When
developing direct PE input recommendations for CMS, CAP and the AMA RUC
made assumptions about the typical laboratory setting and batch size to
determine the typical direct PE inputs for each service. Given that
many of these services are furnished by private laboratories, it was
challenging for CAP and the AMA RUC to provide recommendations on the
typical inputs for many services, and not possible for other services.
We posted the AMA RUC- and CAP-recommended direct PE inputs on the CMS
Web site in the files supporting the CY 2013 PFS proposed rule at
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We stated in the
CY 2013 PFS proposed rule (77 FR 44784) that we appreciate all of the
effort CAP has made to develop national pricing inputs; however, we
agree with its view that, in many cases, there is no established
approach for the specific number and combination of methods involved in
executing many of these tests and that the potential pathways for a
laboratory or pathology group practice to execute these tests can vary
considerably.
As we discussed in the CY 2013 PFS proposed rule, in addition to
recommendations on physician work and direct PE inputs, the AMA RUC
provided CMS with recommended utilization crosswalks for most of the
molecular pathology tests. When there are coding changes, the
utilization crosswalk tracks Medicare utilization from an existing code
to a new code. The existing code utilization figures are drawn from
Medicare Part B claims data. We use utilization crosswalk assumptions
to ensure PFS budget neutrality and to create PE RVUs

[[Page 68997]]

through the PE methodology. The AMA RUC's recommended crosswalk
utilization is presented in Table 27 for reference, however, we note
that because these services are not payable under the PFS, these values
were not used for rate-setting. In the CY 2013 PFS proposed rule, we
stated that we believe that the utilization assumptions for the
technical component of the new CPT codes should be based on the
utilization of the corresponding CPT codes currently billed on the
CLFS, and not on the utilization of CPT code 83912-26. As we discussed
in the CY 2013 PFS proposed rule, several laboratories provided us with
a list of the molecular pathology tests that they perform, and
identified the stacking codes that are currently used to bill for each
test and the new CPT code that would be billed for each test. However,
because the same molecular pathology test may be billed using different
stacks, and the same stack may be billed for different tests, it is not
possible to determine which stacks match which new CPT codes unless the
billing entity billed both the new molecular pathology CPT code and the
stacking codes. Additionally, if a beneficiary has more than one test
on the same date of service and both stacks are billed on the same
Medicare claim, it is not possible to determine which stacking codes on
the claim relate to each test. Furthermore, some tests described by the
new CPT codes are currently billed using general ``not otherwise
classified'' (NOC) pathology CPT codes that capture a range of services
and not just the specific molecular pathology tests described by the
new CPT codes. We stated that, given these factors, it is difficult to
estimate the utilization of the new molecular pathology CPT codes based
on the Medicare billing of the current stacking and NOC codes.
We stated that if we were to finalize payment for molecular
pathology tests under the PFS, we did not believe that we could propose
national payment rates, because the following questions remained:
If these services are furnished by a physician, what are
the appropriate physician work RVUs and times relative to other similar
services?
Where and how are each of these services typically
furnished--for example, what is the typical laboratory setting and
batch size?
What is the correct projected utilization for each of
these services?
In the CY 2013 PFS proposed rule, we stated that, given these major
areas of uncertainty, if CMS determined that new molecular pathology
CPT codes should be paid under the PFS for CY 2013, we would propose to
allow the Medicare contractors to price these codes because we do not
believe that we have sufficient information to engage in accurate
national pricing and because the price of tests can vary locally. As
previously discussed, this proposal was parallel to the CLFS Annual
Public Meeting process through which we received comments and
recommendations on the appropriate basis for establishing a payment
amount for these molecular pathology tests as clinical diagnostic
laboratory tests under the CLFS. We stated that if we decided to
finalize payment for these new codes under the PFS, we would consider
modifying Sec. 415.130 as appropriate to provide for payment to a
pathologist for molecular pathology tests.
Finally, we stated that, after reviewing comments received on the
proposals contained within the CY 2013 PFS proposed rule (77 FR 44782
through 44787), and after hearing the discussion at the CLFS Annual
Public Meeting and reviewing comments and recommendations during the
public meeting process, we would determine the appropriate basis for
establishing payment amounts for the new molecular pathology CPT codes.
We stated that we would publish our final decision in the CY 2013 PFS
final rule with comment period and, at the same time the final rule is
published, post final payment determinations for any molecular
pathology tests that will be paid under the CLFS.
A summary of the comments received on the questions and proposals
discussed in the CY 2013 PFS proposed rule, followed by our responses
and conclusions are below.
We received the following comments in response to our questions on
whether these molecular pathology CPT codes describe services that are
ordinarily furnished by a physician; whether the services require
interpretation and written report and, if so, who ordinarily furnishes
that interpretation and how frequently; what is the nature of that
interpretation and does it typically require physician work; and the
broader question of whether these codes describe physicians' services
that should be paid under the PFS or if they describe clinical
diagnostic laboratory tests that should be paid under the CLFS; as well
as our proposal to price all molecular pathology CPT codes through a
single fee schedule:
Comment: Many commenters stated that these molecular pathology
tests are not ordinarily furnished by a physician. These commenters
stated that the services described by the new molecular pathology CPT
codes do not require physician involvement, and that the vast majority
of tests are performed (both the technical component and the
interpretation) without a physician. The American Clinical Laboratory
Association (ACLA) commented that a survey of its members showed that
in most cases, the tests are performed, supervised, and interpreted by
nonphysicians, most often doctoral-level scientists with expertise in
medical genetics. ACLA noted that both Ph.D. geneticists and
pathologists can be certified in genetics by an American Board of
Medical Specialties. Comments indicated that some laboratories
performing these tests do not employ physicians.
In contrast, other commenters noted that the molecular pathology
CPT codes were developed as global services, including both
professional (physician work) and technical components together, and so
the CPT codes inherently include physician work. They noted that many
of the clinical vignettes developed as a part of the CPT and AMA RUC
processes demonstrate the incorporation of the technical steps and the
professional services by a pathologist associated with each code.
There was little agreement among commenters on whether molecular
pathology tests require any interpretation and whether that
interpretation is ordinarily furnished by a physician. Several
commenters noted that molecular pathology tests can be divided into
three groups based on interpretation requirements. The first group
includes tests that require interpretation by a physician to generate a
beneficiary-specific result, which, they stated, includes tests that
utilize fluorescence in situ hybridization or immunohistochemistry
technology. The second group includes tests that require interpretation
by a nonphysician qualified healthcare professional to produce a
beneficiary-specific result, which, they stated, includes many of the
genetic tests assigned to Tier 1 and Tier 2 CPT codes. The third group
includes tests that do not require interpretation by either a physician
or health care professional because the test system produces the
beneficiary-specific result, which, they stated, includes multi-analyte
assays with algorithmic analyses (MAAAs) and in vitro diagnostic kits
for genetic tests that have been assigned Tier 1 and Tier 2 CPT codes.
Other commenters noted that each of the tests represented by the
new molecular pathology CPT codes ordinarily requires interpretation
and report. Several commenters explained that even clearly negative
results, in

[[Page 68998]]

most instances, require an expenditure of resources for interpretation.
One commenter explained that the results of these technical procedures
require interpretation of the raw data generated, and that a
pathologist assumes the responsibility for the generation of these
results and performs the work associated with interpreting them,
irrespective of whether the beneficiary has a positive or negative
result. Additionally, one commenter noted that as molecular pathology
tests become more and more automated as the field and science evolve,
the interpretation and reporting of these tests is concurrently
becoming more and more complex.
There was also little agreement among commenters as to whether the
interpretation and report associated with these molecular pathology
tests is ordinarily performed by a physician. Many commenters stated
that clinical molecular diagnostics is a rapidly evolving diagnostic
subspecialty that requires both technical and medical knowledge to
interpret test results for use in beneficiary care. They explained that
these molecular pathology tests require review by an expert who is
well-versed in the interpretation of molecular pathology test results,
who has the medical knowledge to place the results in a clinical
context, and who can guide decisions about beneficiary treatment
options and care management. They contended that selecting the best
treatment path for an individual beneficiary's disease state is a key
facet of molecular pathology and depends upon the pathologist's
clinical expertise in the disease area. Commenters stated that, with
molecular pathology, it is medically necessary for the pathologist to
provide the referring physician with clinical insight about how the
result should be interpreted based on the technique used and on the
beneficiary's history and medical condition. They contended that this
differs from other laboratory subspecialties where the ordering
physician typically has the expertise to interpret test results. These
commenters stated that interpretation and report of a molecular
pathology test is ordinarily furnished by a physician.
In contrast, other commenters noted that, regardless of the nature
of the interpretation for a molecular pathology test, doctoral-level
geneticists are qualified and credentialed to perform the
interpretation. The commenters stated that physician interpretation is
not typical. They stated that in some laboratories, physicians may
interpret test results when circumstances require a broader clinical
review. They went on to note that among 367,370 molecular pathology
allowed services with interpretation and report paid by Medicare in
2010, approximately 80 percent of the services did not require a
physician interpretation.
Commenters who stated that molecular pathology tests ordinarily
require the interpretation of a physician also stated that the
molecular pathology tests should be paid under the PFS. Generally,
these commenters contended that it is medically necessary for a
physician to interpret the molecular pathology test results, guide the
beneficiary's treatment, assess the beneficiary's progress, and prepare
the final report for the beneficiary's record. As such, the commenter
stated molecular pathology, as a field, is fundamentally different from
laboratory medicine. They reasoned that complex tests that require
physician interpretation to be clinically meaningful belong on the PFS.
Additionally, some commenters stated that these services should be paid
under the PFS because the resources involved in furnishing molecular
pathology tests are changing rapidly. They pointed out that only the
PFS currently allows the valuation of the codes to be continuously
reviewed and scrutinized, taking into account changing technology and
increased efficiencies as technology is adopted and becomes more
widespread. They noted that placing the CPT codes for these molecular
pathology tests on the PFS will enable the healthcare system to capture
those savings. Finally, some commenters who stated that the molecular
pathology tests should be paid under the PFS also thought that CMS
should establish CLFS payment for laboratory interpretation and report
of a molecular pathology test.
Commenters who stated that molecular pathology tests do not
ordinarily require the interpretation of a physician also stated that
the molecular pathology tests should be paid under the CLFS. Generally,
these commenters contended that if a service is not ordinarily
furnished by a physician, then CMS is precluded from paying for the
service under the PFS. They explained that, as stated by the regulation
at Sec. 415.130(b), allowable physician pathology tests can only be
paid if they first meet the threshold criteria of Sec. 415.102(a)(1)
(``The services are personally furnished for an individual beneficiary
by a physician'') and Sec. 415.102(a)(3) (``The services ordinarily
require performance by a physician.'') Additionally, some commenters
stated that the tests described by the new molecular pathology CPT
codes will continue to be performed exactly as they were prior to the
coding change and that there is no reason why the tests should not
continue to be paid under the CLFS. Finally, some commenters who stated
that the molecular pathology tests should be paid under the CLFS also
suggested that CMS should establish PFS payment for physician
interpretation and report of a molecular pathology test.
Finally, in response to our proposal to price all molecular
pathology CPT codes through a single fee schedule, most commenters
stated that CMS should assess each CPT code independently and include
the molecular pathology tests that require physician work on the PFS,
and the molecular pathology tests that do not require physician work on
the CLFS. However, as stated above, some commenters stated that all the
molecular pathology CPT codes include physician work, and should all be
placed together on the PFS, while others stated that none of the
molecular pathology CPT codes require physician work, and all should be
placed together on the CLFS. Finally, as stated above, some commenters
suggested that the tests should be paid under the CLFS with a PFS
payment for physician interpretation and report of a molecular
pathology test whereas others stated that the tests should be paid
under the PFS with a CLFS payment for laboratory interpretation and
report of a molecular pathology test.
Response: We thank the commenters for their thorough responses to
our questions and proposals. After reviewing the comments, we believe
that the molecular pathology CPT codes describe clinical diagnostic
laboratory tests that should be paid under the CLFS because these
services do not ordinarily require interpretation by a physician to
produce a meaningful result. While we recognize that these tests may be
furnished by a physician, after reviewing the public comments and
listening to numerous presentations by stakeholders throughout the
comment period, we are not convinced that all these tests ordinarily
require interpretation by a physician. Many commenters stated that
geneticists can provide any necessary interpretation for a meaningful
test result of a molecular pathology test if some interpretation is
required. ACLA noted that both Ph.D. geneticists and pathologists can
be certified in genetics by an American Board of Medical Specialties,
evidence that the medical community recognizes geneticists as qualified
to interpret molecular pathology test results. Commenters described
automated laboratory processes and organizational structures that rely
on geneticist

[[Page 68999]]

interpretation when needed, and they presented a claims analysis
demonstrating that physician interpretation currently is not typical
across molecular pathology services in CY 2010. Further, commenters
stated that these molecular pathology tests are currently payable on
the CLFS.
We do not agree with some commenters that these codes inherently
include physician work because they were developed as global services.
We have a long-standing policy of dividing a global diagnostic service
into a professional and technical component to separately capture the
resources involved in the professional work and technical component of
the test. We are not convinced that a physician must be involved in
performing portions of the technical component. We believe that some
molecular pathology tests are automated and do not require
interpretation. Where the laboratory processes are not automated,
laboratory personnel, including doctoral-level geneticists, can produce
accurate molecular pathology test results. Although there might be
occasions when a physician furnishes some of the technical component of
a clinical laboratory test paid under the CLFS, we do not believe that
performance by a physician changes the nature of the work. Rather, we
believe it would still be appropriate to make payment for the technical
work as part of the CLFS payment for the test. One commenter provided a
claims analysis demonstrating that physicians are the most common
entity to bill CPT code 89312 in the 2009 claims data; that there are
more individual pathologists submitting claims for molecular pathology
services than there are independent laboratories submitting claims for
molecular pathology services. We believe this speaks to the different
business structures in the pathology and laboratory communities. We
would expect numerous different pathologists working in a hospital-
based academic or research laboratory to bill for their professional
services interpreting and reporting on a molecular pathology test
independently under their NPI or group NPI using CPT code 83912-26. We
would expect commercial laboratories to bill CPT code 83912 for
interpretation and report by a nonphysician laboratory professional,
like a doctoral-level geneticist, for a great volume of tests under a
single laboratory NPI. We do not believe this analysis of the typical
provider supports an assessment of whether interpretation is ordinarily
required for furnishing molecular pathology services.
Finally, while we considered the differences in methodology for
pricing under the CLFS versus the PFS, including the ability to apply a
budget neutrality adjustment under the PFS, we do not believe that the
differences in payment methodologies should be a definitive basis for
deciding to choose a specific fee schedule. Rather, the statute
requires Medicare to pay using separate methodologies for physicians'
services and for clinical diagnostic laboratory tests. Ultimately, we
believe the primary criterion for determining the appropriate payment
methodology is the identification of a service as one or the other.
Therefore, for CY 2013, we are assigning a PFS procedure status
indicator of X (Statutory exclusion. These codes represent an item or
service that is not within the statutory definition of ``physicians'
services'' for PFS payment purposes (for example, ambulance services).
No RVUs are shown for these codes and no payment may be made under the
PFS to the molecular pathology CPT codes listed in Table 27, because
payment will be made for these tests under the CLFS. More information
on the CLFS determination of the appropriate basis for payment
(crosswalk or gap-filling) for these tests is available on the CMS Web
site at www.cms.hhs.gov/ClinicalLabFeeSched.
While we do not believe the molecular pathology tests are
ordinarily performed by physicians, we do believe that, in some cases,
a physician interpretation of a molecular pathology test may be
medically necessary to provide a clinically meaningful, beneficiary-
specific result. In order to make PFS payment for that physician
interpretation, on an interim basis for CY 2013, we have created HCPCS
G-code G0452 (molecular pathology procedure; physician interpretation
and report) to describe medically necessary interpretation and written
report of a molecular pathology test, above and beyond the report of
laboratory results. This professional component-only HCPCS G-code will
be considered a ``clinical laboratory interpretation service,'' which
is one of the current categories of PFS pathology services under the
definition of physician pathology services at Sec. 415.130(b)(4).
Section Sec. 415.130(b)(4) of the regulations and section 60 of the
Claims Processing Manual (IOM 100-04, Ch. 12, section 60.E.) specify
certain requirements for billing the professional component of certain
clinical laboratory services including that the interpretation (1) must
be requested by the patient's attending physician, (2) must result in a
written narrative report included in the patient's medical record, and
(3) requires the exercise of medical judgment by the consultant
physician. We note that a hospital's standing order policy can be used
as a substitute for the individual request by a patient's attending
physician. The current CPT code for interpretation and report, 83912-
26, is included on the current list of clinical laboratory
interpretation services but will be deleted at the end of CY 2012.
We will monitor the utilization of this service and collect data on
billing patterns to ensure that G0452 is only being used when
interpretation and report by a physician is medically necessary and is
not duplicative of laboratory reporting paid under the CLFS. In the
near future, we intend to reassess whether this HCPCS code is
necessary, and if so, in conjunction with which molecular pathology
tests. A discussion of the work and direct PE inputs for HCPCS G-code
G0452 can be found later in this section. We note that physicians can
continue to receive payment for the current clinical pathology
consultation CPT codes 80500 (Clinical pathology consultation; limited,
without review of a patient's history and medical records) and 80502
(Clinical pathology consultation; comprehensive, for a complex
diagnostic problem, with review of patient's history and medical
records) if the pathology consultation services relating to a molecular
pathology test meet the definition of those codes.
We do not believe it is appropriate to establish a HCPCS G-code on
the CLFS for the interpretation and report of a molecular pathology
test by a doctoral-level scientist or other appropriately trained
nonphysician health care professional. The new molecular pathology CPT
codes consolidate the services previously reported using the CLFS
stacking codes, including the CLFS stacking code for laboratory
interpretation and report of a molecular pathology test (CPT code
83912). As such, we believe that payment for the interpretation and
report service would be considered part of the overall CLFS payment for
the molecular pathology CPT codes. In addition, geneticists and other
nonphysician laboratory personnel do not have a Medicare benefit
category that allows them to bill and be paid for their interpretation
services; therefore, they cannot bill or receive PFS payment for HCPCS
code G0452.
In response to our questions about the appropriate physician work
RVUs and times, utilization crosswalks, and direct PE inputs for the
molecular pathology services described by the CPT codes, as

[[Page 69000]]

well as our proposal to contractor price the codes for CY 2013 if we
determined that the codes should be paid under the PFS for CY 2013, we
received the following comments:
Comment: Commenters were not in favor of our proposal to contractor
price these CPT codes if we determined that the codes should be paid
under the PFS. Commenters urged CMS to establish national payment rates
for the new molecular pathology CPT codes. Several commenters
recommended that we use the AMA RUC- and CAP-recommended RVUs and
inputs for these tests. One commenter suggested that contractor pricing
is unnecessary to set payment rates for the technical component, since
CMS has hospital cost data that can be used to develop payment rates.
This commenter went on to strongly urge CMS to provide clear and
specific guidance that contractors must work with cost data from
constituents in their areas to set appropriate rates for physician
services.
Commenters stated that they are concerned that contractor pricing
would lack the breadth of input, external scrutiny, and relativity
utilized in the development of the AMA RUC recommendations. Commenters
also believe that contractor pricing would add administrative
complexities and costs, and that variations in contractor pricing would
be disruptive. Also, commenters stated that contractor pricing could
result in movement of sites of testing to the highest paying regions in
order to maximize Medicare payment for individual services.
Furthermore, commenters suggested that the variation in the costs of
these tests is related to differences in laboratory facilities,
equipment, and/or test methodologies, and that the variation is not
geographically based; therefore, contractor pricing is not appropriate.
Regarding the utilization estimates for the new molecular pathology
CPT codes, the AMA RUC noted that its utilization projections were
based on the utilization of CPT code 83912 (molecular diagnostics;
interpretation and report), which includes interpretation on both the
physician fee schedule (83912-26) and the clinical laboratory fee
schedule (83912), when interpretation by technical laboratory
personnel, such as a geneticist, accompanies performance of the
molecular pathology test represented by other ``stacking'' codes on a
claim. The AMA RUC noted that utilization of this service has been
growing rapidly and provided updated utilization assumptions based on
2011 Medicare allowed charges for CPT code 83912. These utilization
assumptions, and the AMA RUC-recommended physician work RVUs and times,
for all 115 codes are included in Table 27 for reference. However, we
note that because these services are not payable under the PFS, these
values were not used for rate-setting.
Response: We thank the commenters for their detailed responses to
our questions and proposals. Beginning in CY 2013, the molecular
pathology CPT codes will be paid under the CLFS, and HCPCS code G0452
(Molecular diagnostics; interpretation and report) will be paid under
the PFS. Because payment for the molecular pathology CPT codes will be
made under the CLFS rather than the PFS, it is not necessary to
consider further whether contractor pricing would be appropriate for
the molecular pathology CPT codes under the PFS. We will add a new
HCPCS code, G0452, to replace the current CPT code that is used to bill
under the PFS for interpretation and report of a molecular pathology
test (CPT code 83912-26), which is being deleted at the end of CY 2012.
After reviewing the public comments, the AMA RUC and CAP
recommendations, and the values of the current and similar services, we
believe we have enough information to nationally price HCPCS code G0452
for CY 2013. We believe it is appropriate to directly crosswalk the
work RVUs, time, utilization, and malpractice risk factor of CPT code
83912-26 to HCPCS code G0452, because we do not believe this coding
change reflects a change in the service or in the resources involved in
furnishing the service. The current work RVU of 0.37 for CPT code
83912-26 is the same as nearly all the clinical laboratory
interpretation service codes. This value is also within the range of
AMA RUC- recommended values for the molecular pathology CPT codes--the
utilization-weighted average AMA RUC-recommended work RVU was 0.33, and
the median AMA RUC-recommended work RVU was 0.45 for the molecular
pathology CPT codes. Based on this information, we believe a work RVU
of 0.37 appropriately reflects the work of HCPCS code G0452. Therefore,
we are assigning a work RVU of 0.37 and 5 minutes of pre-service time,
10 minutes of intra-service time, and 5 minutes of post-service time to
HCPCS code G0452 on an interim final basis for CY 2013. We request
public comment on the interim final values for HCPCS code G0452.

Table 27--AMA RUC-Recommended Physician Work RVUs, Times, and Estimated CY 2013 Utilization for Molecular
Pathology CPT Codes
[Please note, these values are displayed for reference only and were not used for PFS rate-setting.]
----------------------------------------------------------------------------------------------------------------
AMA RUC
AMA RUC AMA RUC estimated CY
CPT code Short descriptor recommended recommended 2013
work RVU physician time utilization
----------------------------------------------------------------------------------------------------------------
81200...................... Aspa gene.......................... .............. .............. 450
81201...................... Apc gene full sequence............. 1.40 60 450
81202...................... Apc gene known fam variants........ 0.77 28 90
81203...................... Apc gene dup/delet variants........ 0.80 30 400
81205 *.................... Bckdhb gene........................ .............. .............. 450
81206...................... Bcr/abl1 gene major bp............. 0.37 15 45,729
81207...................... Bcr/abl1 gene minor bp............. 0.15 11 3,500
81208...................... Bcr/abl1 gene other bp............. 0.46 18 1,000
81209 *.................... Blm gene........................... .............. .............. 450
81210...................... Braf gene.......................... 0.37 15 7,000
81211 *.................... Brca1&2 seq & com dup/del.......... .............. .............. 4,000
81212 *.................... Brca1&2 185&5385&6174 var.......... .............. .............. 2,000
81213 *.................... Brca1&2 uncom dup/del var.......... .............. .............. 4,000
81214 *.................... Brca1 full seq & com dup/del....... .............. .............. 4,000
81215 *.................... Brca1 gene known fam variant....... .............. .............. 1,000
81216 *.................... Brca2 gene full sequence........... .............. .............. 4,000
81217 *.................... Brca2 gene known fam variant....... .............. .............. 600

[[Page 69001]]

81220...................... Cftr gene com variants............. 0.15 10 7,000
81221...................... Cftr gene known fam variants....... 0.40 20 1,000
81222...................... Cftr gene dup/delet variants....... 0.22 13 1,300
81223...................... Cftr gene full sequence............ 0.40 20 1,000
81224...................... Cftr gene intron poly t............ 0.15 10 1,300
81225...................... Cyp2c19 gene com variants.......... 0.37 13 2,000
81226...................... Cyp2d6 gene com variants........... 0.43 15 2,000
81227...................... Cyp2c9 gene com variants........... 0.38 14 4,000
81228 *.................... Cytogen micrarray copy nmbr........ .............. .............. 900
81229 *.................... Cytogen m array copy no&snp........ .............. .............. 900
81235...................... Egfr gene com variants............. 0.51 20 9,000
81240...................... F2 gene............................ 0.13 7 31,000
81241...................... F5 gene............................ 0.13 8 43,000
81242 *.................... Fancc gene......................... .............. .............. 450
81243...................... Fmr1 gene detection................ 0.37 15 4,000
81244...................... Fmr1 gene characterization......... 0.51 20 100
81245...................... Flt3 gene.......................... 0.37 15 6,000
81250 *.................... G6pc gene.......................... .............. .............. 450
81251 *.................... Gba gene........................... .............. .............. 450
81252...................... Gjb2 gene full sequence............ 0.65 30 400
81253...................... Gjb2 gene known fam variants....... 0.52 28 150
81254...................... Gjb6 gene com variants............. 0.40 15 500
81255 *.................... Hexa gene.......................... .............. .............. 450
81256...................... Hfe gene........................... 0.13 7 25,000
81257...................... Hba1/hba2 gene..................... 0.50 20 4,500
81260 *.................... Ikbkap gene........................ .............. .............. 450
81261...................... Igh gene rearrange amp meth........ 0.52 21 4,500
81262...................... Igh gene rearrang dir probe........ 0.61 20 700
81263...................... Igh vari regional mutation......... 0.52 23 400
81264...................... Igk rearrangeabn clonal pop........ 0.58 22 4,000
81265...................... Str markers specimen anal.......... 0.40 17 14,000
81266...................... Str markers spec anal addl......... 0.41 15 300
81267...................... Chimerism anal no cell selec....... 0.45 18 2,000
81268...................... Chimerism anal w/cell select....... 0.51 20 300
81270...................... Jak2 gene.......................... 0.15 10 19,000
81275...................... Kras gene.......................... 0.50 20 14,000
81280 *.................... Long qt synd gene full seq......... .............. .............. 450
81281 *.................... Long qt synd known fam var......... .............. .............. 450
81282 *.................... Long qt syn gene dup/dlt var....... .............. .............. 450
81290 *.................... Mcoln1 gene........................ .............. .............. 450
81291...................... Mthfr gene......................... 0.15 10 9,000
81292...................... Mlh1 gene full seq................. 1.40 60 1,000
81293...................... Mlh1 gene known variants........... 0.52 28 500
81294...................... Mlh1 gene dup/delete variant....... 0.80 30 800
81295...................... Msh2 gene full seq................. 1.40 60 1,000
81296...................... Msh2 gene known variants........... 0.52 28 500
81297...................... Msh2 gene dup/delete variant....... 0.80 30 800
81298...................... Msh6 gene full seq................. 0.80 30 450
81299...................... Msh6 gene known variants........... 0.52 28 600
81300...................... Msh6 gene dup/delete variant....... 0.65 30 500
81301...................... Microsatellite instability......... 0.50 20 1,000
81302...................... Mecp2 gene full seq................ 0.65 30 200
81303...................... Mecp2 gene known variant........... 0.52 28 50
81304...................... Mecp2 gene dup/delet variant....... 0.52 28 150
81310...................... Npm1 gene.......................... 0.39 19 4,500
81315...................... Pml/raralpha com breakpoints....... 0.37 15 1,000
81316...................... Pml/raralpha 1 breakpoint.......... 0.22 12 5,000
81317...................... Pms2 gene full seq analysis........ 1.40 60 600
81318...................... Pms2 known familial variants....... 0.52 28 200
81319...................... Pms2 gene dup/delet variants....... 0.80 30 375
81321...................... Pten gene full sequence............ 0.80 30 950
81322...................... Pten gene known fam variant........ 0.52 28 150
81323...................... Pten gene dup/delet variant........ 0.65 30 200
81324 *.................... Pmp22 gene dup/delet............... .............. .............. 450
81325 *.................... Pmp22 gene full sequence........... .............. .............. 450
81326 *.................... Pmp22 gene known fam variant....... .............. .............. 450
81330 *.................... Smpd1 gene common variants......... .............. .............. 450
81331...................... Snrpn/ube3a gene................... 0.39 15 250

[[Page 69002]]

81332...................... Serpina1 gene...................... 0.40 15 1,000
81340...................... Trb@ gene rearrange amplify........ 0.63 25 4,000
81341...................... Trb@ gene rearrange dirprobe....... 0.45 19 1,000
81342...................... Trg gene rearrangement anal........ 0.57 25 5,000
81350...................... Ugt1a1 gene........................ 0.37 15 850
81355...................... Vkorc1 gene........................ 0.38 15 4,000
81370...................... Hla i & ii typing lr............... 0.54 15 14,000
81371...................... Hla i & ii type verify lr.......... 0.60 30 9,000
81372...................... Hla i typing complete lr........... 0.52 15 4,000
81373...................... Hla i typing 1 locus lr............ 0.37 15 4,000
81374...................... Hla i typing 1 antigen lr.......... 0.34 13 13,000
81375...................... Hla ii typing ag equiv lr.......... 0.60 15 2,000
81376...................... Hla ii typing 1 locus lr........... 0.50 15 2,000
81377...................... Hla ii type 1 ag equiv lr.......... 0.43 15 2,000
81378...................... Hla i & ii typing hr............... 0.45 20 2,000
81379...................... Hla i typing complete hr........... 0.45 15 1,000
81380...................... Hla i typing 1 locus hr............ 0.45 15 1,000
81381...................... Hla i typing 1 allele hr........... 0.45 12 1,000
81382...................... Hla ii typing 1 loc hr............. 0.45 15 1,000
81383...................... Hla ii typing 1 allele hr.......... 0.45 15 1,000
81400...................... Mopath procedure level 1........... 0.32 10 2,500
81401...................... Mopath procedure level 2........... 0.40 15 2,000
81402...................... Mopath procedure level 3........... 0.50 20 2,000
81403...................... Mopath procedure level 4........... 0.52 28 2,000
81404...................... Mopath procedure level 5........... 0.65 30 2,000
81405...................... Mopath procedure level 6........... 0.80 30 1,850
81406...................... Mopath procedure level 7........... 1.40 60 1,000
81407...................... Mopath procedure level 8........... 1.85 60 1,000
81408...................... Mopath procedure level 9........... 2.35 80 1,000
81479 *.................... Unlisted molecular pathology....... .............. .............. 0
----------------------------------------------------------------------------------------------------------------
* The AMA RUC concluded that these services are not typically performed by a physician at this time. Therefore,
they have not been reviewed for physician work or time by the AMA RUC.

J. Payment for New Preventive Service HCPCS G-Codes

Under section 1861(ddd) of the Act, as amended by section 4105 of
the Affordable Care Act, CMS is authorized to add coverage of
``additional preventive services'' if certain statutory criteria are
met as determined through the national coverage determination (NCD)
process, including that the service meets all of the following
criteria: (1) They must be reasonable and necessary for the prevention
or early detection of illness or disability, (2) they must be
recommended with a grade of A or B by the United States Preventive
Services Task Force (USPSTF), and (3) they must be appropriate for
individuals entitled to benefits under Part A or enrolled under Part B.
After reviewing the USPSTF recommendations for the preventive services,
conducting evidence reviews, and considering public comments under the
NCD process, we determined that the above criteria were met for the
services listed in Table 28. Medicare now covers each of the following
preventive services:
Screening and Behavioral Counseling Interventions in
Primary Care to Reduce Alcohol Misuse, effective October 14, 2011;
Screening for Depression in Adults, effective October 14,
2011;
Screening for Sexually Transmitted Infections (STIs) and
High Intensity Behavioral Counseling (HIBC) to Prevent STIs, effective
November 8, 2011;
Intensive Behavioral Therapy for Cardiovascular Disease,
effective November 8, 2011; and
Intensive Behavioral Therapy for Obesity, effective
November 29, 2011.
Table 28 lists the HCPCS G-codes created for reporting and payment
of these services. The Medicare PFS payment rates for these services
are discussed below. The NCD process establishing coverage of these
preventive services was not complete at the time of publication of the
CY 2012 PFS final rule with comment period, so we could not include
interim RVUs for these preventive services in the addenda to our CY
2012 final rule with comment period. However, we were able to include
these HCPCS G-codes with national payment amounts for these services in
the CY 2012 PFS national relative value files, which were effective
January 1, 2012. From the effective date of each service to December
31, 2011, the payment amount for these codes was established by the
Medicare Administrative Contractors.

[[Page 69003]]

Table 28--New Preventive Service HCPCS G-Codes
------------------------------------------------------------------------
CMS national
HCPCS code long coverage CMS change
HCPCS code descriptor determination request (CR)
(NCD)
------------------------------------------------------------------------
G0442............... Annual alcohol Screening and CR7633
misuse Behavioral
screening, 15 Counseling
minutes. Interventions
in Primary
Care to Reduce
Alcohol Misuse
(NCD 210.8).
G0443............... Brief face-to- Screening CR7633
face Behavioral
behavioral Counseling
counseling for Interventions
alcohol in Primary
misuse, 15 Care to Reduce
minutes. Alcohol Misuse
(NCD 210.8).
G0444............... Annual Screening for CR7637
Depression Depression in
Screening, 15 Adults (NCD
minutes. 210.9).
G0445............... High-intensity Screening for CR7610
behavioral Sexually
counseling to Transmitted
prevent infections(STI
sexually s) and High-
transmitted Intensity
infections, Behavioral
face-to-face, Counseling
individual, (HIBC) to
includes: prevent STIs
education, (NCD 210.10).
skills
training, and
guidance on
how to change
sexual
behavior;
performed semi-
annually, 30
minutes.
G0446............... Annual, face-to- Intensive CR7636
face intensive Behavioral
behavioral Therapy for
therapy for Cardiovascular
cardiovascular Disease (NCD
disease, 210.11).
individual, 15
minutes.
G0447............... Face-to-face Intensive CR7641
behavioral Behavioral
counseling for Therapy for
obesity, 15 Obesity (NCD
minutes. 210.12).
------------------------------------------------------------------------

Two new HCPCS codes, G0442 (Annual alcohol misuse screening, 15
minutes), and G0443 (Brief face-to-face behavioral counseling for
alcohol misuse, 15 minutes), were created for the reporting and payment
of screening and behavioral counseling interventions in primary care to
reduce alcohol misuse.
As we explained in the proposed rule, we believe that the screening
service described by HCPCS code G0442 requires similar physician work
as CPT code 99211 (Level 1 office or other outpatient visit,
established patient). Accordingly, we proposed a work RVU of 0.18 for
HCPCS code G0442 for CY 2013, the same work RVU as CPT code 99211. For
physician time, we proposed 15 minutes, which is the amount of time
specified in the HCPCS code descriptor for G0442. We proposed a
malpractice expense crosswalk to CPT code 99211. The proposed direct PE
inputs were reflected in the CY 2013 proposed direct PE input database,
available on the CMS Web site under the downloads for the CY 2013 PFS
proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public
comment on this CY 2013 proposed value for HCPCS code G0442.
Comment: Commenters supported the proposed payment for HCPCS code
GO442 although a commenter suggested that in the future CMS should use
the AMA RUC to assist us in valuing new codes.
Response: In response to the suggestion that we rely upon AMA RUC
input in valuing new codes, we agree with the commenter that the input
of the AMA RUC is extremely useful in valuing new codes and in general,
we obtain its recommendations in establishing the original values for
new codes. However, because this new code was added through an NCD
effective as of October 14, 2011, public commenters, including the AMA
RUC, were not able to comment for consideration for CY 2012. We note
that since this code was valued in CY 2012 based upon CPT code 99211
and the AMA RUC had provided a recommendation on this code previously,
the AMA RUC was involved, albeit indirectly, in setting this rate. In
addition, there was opportunity for the AMA RUC to provide comment on
this code in response to the solicitation for comment on the CY 2013
proposed rule.
After consideration of the public comments we received, we are
finalizing our CY 2013 proposal to establish a work RVU of 0.18 and a
time of 15 minutes for HCPCS code G0442. For malpractice expense, we
are finalizing our proposed crosswalk for HCPCS code G0442 to CPT code
99211. We are also finalizing the direct PE inputs as proposed. The
direct PE inputs associated with this code are included in the CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule with comment period at
www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs
included in Addendum B reflect the values that result from the
finalization of this policy.
As we explained in the proposed rule, we believe that the
behavioral counseling service described by HCPCS code G0443 requires
similar work as CPT code 97803 (Medical nutrition therapy; re-
assessment and intervention, individual, face-to-face with the patient,
each 15 minutes). Accordingly, we proposed a work RVU of 0.45 for HCPCS
code G0443 for CY 2013, the same work RVU as CPT code 97803. For
physician time, we proposed 15 minutes, which is the amount of time
specified in the HCPCS code descriptor for G0443. For malpractice
expense, we proposed a malpractice expense crosswalk to CPT code 97803.
The proposed direct PE inputs are reflected in the CY 2013 proposed
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013
proposed value for HCPCS code G0443.
Comment: Commenters supported the proposed payment for HCPCS code
G0443. A commenter inquired why HCPCS code G0443 was crosswalked to CPT
code 99212 and CPT code 97803 rather than to CPT code 99407 (Smoking
and tobacco use cessation counseling visit; intensive, greater than 10
minutes). We also received a comment that in the future CMS should use
the AMA RUC to assist us in valuing new codes.
Response: The commenter was mistaken in stating that HCPCS code
G0443 was crosswalked to CPT code 99212; it was crosswalked only to CPT
code 97803. In response to the comment about crosswalking this code to
CPT 99407, we had considered CPT code 99407 when we initially set the
payment rate for HCPCS code G0443 and after consideration of this
comment we continue to believe that the value based upon CPT code
97803, which is a 15-minute counseling code is appropriate. In response
to the suggestion that we rely upon AMA RUC input in valuing new codes,
we agree with the commenter that the input of the AMA RUC is extremely
useful in valuing new codes and in general, we obtain its
recommendations in establishing the original values for new codes.
However, because this new code

[[Page 69004]]

was added through an NCD effective as of October 14, 2011, public
commenters, including the AMA RUC, were not able to comment for
consideration for CY 2012. We note that since this code was valued in
CY 2012 based upon CPT code 97803 and the AMA RUC had provided
recommendation on this code previously, the AMA RUC was involved,
albeit indirectly, in setting this rate. In addition, there was
opportunity for the AMA RUC to provide comment on this code in the
solicitation for comment on the CY 2013 proposed rule.
After consideration of the public comments that we received, we are
finalizing the proposed work RVU of 0.45 and a time of 15 minutes for
HCPCS code G0443. For malpractice expense, we are finalizing our
proposed crosswalk to for HCPCS code G0443 to CPT code 97803. We are
also finalizing the direct PE inputs as proposed. The direct PE inputs
associated with this code are included in the CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in
Addendum B reflect the values that result from the finalization of this
policy. HCPCS code G0444 (Annual Depression Screening, 15 minutes) was
created for the reporting and payment of screening for depression in
adults. As we explained in the proposed rule, we believe that the
screening service described by HCPCS code G0444 requires similar
physician work as CPT code 99211. Accordingly, we proposed a work RVU
of 0.18 for HCPCS code G0444 for CY 2013, the same work RVU as CPT code
99211. For physician time, we proposed 15 minutes, which is the amount
of time specified in the HCPCS code descriptor for G0444. For
malpractice expense, we proposed a malpractice expense crosswalk to CPT
code 99211. The proposed direct PE inputs were reflected in the CY 2013
proposed PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013
proposed value for HCPCS code G0444.
Comment: Commenters supported the proposed payment for HCPCS code
GO444 although a commenter suggested that in the future CMS should use
the AMA RUC to assist us in valuing new codes.
Response: In response to the suggestion that we rely upon AMA RUC
input in valuing new codes, we agree with the commenter that the input
of the AMA RUC is extremely useful in valuing new codes and in general
, we obtain its recommendations in establishing the original values for
new codes. However, because this new code was added through an NCD
effective as of October 14, 2011, public commenters, including the AMA
RUC, were not able to comment for consideration for CY 2012. We note
that since this code was valued in 2012 based upon CPT code 99211 and
the AMA RUC had provided recommendation on this code previously, the
AMA RUC was involved, albeit indirectly, in setting this rate. In
addition, there was opportunity for the AMA RUC to provide comment on
this code in response to the solicitation for comment on the CY 2013
proposed rule.
After consideration of the public comments we received, we are
finalizing the proposed a work RVU of 0.18, and a time of 15 minutes
for HCPCS G0444 code. For malpractice expense, we are finalizing our
proposed crosswalk for HCPCS G0444 code. For malpractice expense, we
are finalizing our proposed crosswalk for HCPCS code G0444 to CPT code
99211. We are also finalizing the direct PE inputs as proposed. The
direct PE inputs associated with this code are included in the CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule with comment period at
www.cms.gov/PhysicianFee Sched/. Additionally, we note that the PE RVUs
included in Addendum B reflect the values that result from the
finalization of this policy. HCPCS code G0445 (high-intensity
behavioral counseling to prevent sexually transmitted infections, face-
to-face, individual, includes: Education, skills training, and guidance
on how to change sexual behavioral, performed semi-annually, 30
minutes) was created for the reporting and payment of HIBC to prevent
STIs. As we explained in the proposed rule, we believe that the
behavioral counseling service describe by HCPCS code G0445 requires
similar physician work as CPT code 97803. Accordingly, we proposed a
work RVU of 0.45 for HCPCS code G0445 for CY 2013, the same work RVU as
CPT code 97803. For physician time, we proposed 30 minutes, which is
the amount of time specified in the HCPCS code descriptor for G0445.
For malpractice expense, we proposed a malpractice expense, we proposed
a malpractice expense crosswalk to CPT code 97803. The proposed direct
PE inputs were reflected in the CY 2013 proposed direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS CY 2013 proposed rule at www.cms.gov/PhysicianFeeSched/. We
requested public comment on this CY 2013 proposed value for HCPCS code
G0445.
Comment: Commenters supported the proposed payment for HCPCS code
G0445 although a commenter suggested that in the future we should use
the AMA RUC to assist us in valuing new codes.
Response: In response to the suggestion that we rely upon AMA RUC
input in valuing new codes, we agree with the commenter that the input
of the AMA RUC is extremely useful in valuing new codes and in general,
we obtain its recommendations in establishing the original values for
new codes. However, because this new code was added through an NCD
effective as of October 14, 2011, public commenters, including the AMA
RUC, were not able to comment for consideration for CY 2012. We note
that since this code was valued in CY 2012 based upon CPT code 97803
and the AMA RUC had provided recommendation on this code previously,
the AMA RUC was involved, albeit indirectly, in setting this rate. In
addition, there was opportunity for the AMA RUC to provide comment on
this code in response to the solicitation for comment on the CY 2013
proposed rule.
After consideration of the public comments we received, we are
finalizing the proposed a work RVU of 0.45 and a time of 30 minutes for
HCPCS code G0445. For malpractice expense, we are finalizing our
proposed crosswalk for HCPCS code G0445 to CPT code 97803. We are also
finalizing the direct PE inputs as proposed. The direct PE inputs
associated with this code are included in the CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule with comment period at www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in
Addendum B reflect the values that result from the finalization of this
policy. HCPCS code G0446 (Annual, face-to-face intensive behavioral
therapy for cardiovascular disease, individual, 15 minutes) was created
for the reporting and payment of intensive behavioral therapy for
cardiovascular disease. As we explained in the proposed rule, we
believe that the behavioral therapy service described by HCPCS code
G0446 requires similar physician work as CPT code 97803. Accordingly,
we proposed a work RVU of 0.45 for HCPCS code G0446 for CY 2013, the
same work RVU as CPT code

[[Page 69005]]

97803. For physician time, we proposed 15 minutes, which is the amount
of time specified in the HCPCS code descriptor for G0446. For
malpractice expense, we proposed a malpractice expense crosswalk to CPT
code 97803. The proposed direct PE inputs were reflected in the CY 2013
proposed direct PE input database, available on the CMS Web site under
the downloads for the CY 2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested public comment on this CY 2013
proposed value for HCPCS code G0446.
Comment: Commenters supported the proposed payment for HCPCS code
GO446. In addition, a commenter urged a change in our policy to allow
billing of multiple units of this code in one encounter. We also
received a comment that in the future CMS should use the AMA RUC to
assist us in valuing new codes.
Response: In response to the suggestion regarding billing multiple
units of HCPCS code G0446, this proposal deals only with the payment
rate for this service, not coverage issues. We note that the NCD is
clear that only one visit annually is covered. In response to the
suggestion that we rely upon AMA RUC input in valuing new codes, we
agree with the commenter that the input of the AMA RUC is extremely
useful in valuing new codes and in general, we obtain its
recommendations in establishing the original values for new codes.
However, because this new code was added through an NCD effective as of
October 14, 2011, public commenters, including the AMA RUC, were not
able to comment for consideration for CY 2012. We note that since this
code was valued based upon CPT code 97803 and AMA RUC had provided
recommendation on this code previously, the AMA RUC was involved,
albeit indirectly, in setting this rate. In addition, there was
opportunity for the AMA RUC to provide comment on this code in response
to the solicitation for comment on the CY 2013 proposed rule.
Based upon the comments we received, we are finalizing the proposed
rate for HCPCS code G0446. It will be valued with a work RVU of 0.45,
and with a time of 15 minutes. For malpractice expense, we are
finalizing our proposed crosswalk for HCPCS code G0446 to CPT code
97803. We are also finalizing the direct PE inputs as proposed. The
direct PE inputs associated with this code are included in the CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule with comment period at
www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs
included in Addendum B reflect the values that result from the
finalization of this policy. HCPCS G0447 (Face-to-face behavioral
counseling for obesity, 15 minutes) was created for the reporting and
payment of intensive behavioral therapy for obesity. As we explained in
the proposed rule, we believe that the behavioral counseling service
described by HCPCS code G0447 requires similar physician work to CPT
code 97803. Accordingly, we proposed a work RVU of 0.45 for HCPCS code
G0447 for CY 2013, the same work RVU as CPT code 97803. For physician
time, we proposed 15 minutes, which is the amount of time specified in
the HCPCS code descriptor for G0447. For malpractice expense, we
proposed a malpractice expense crosswalk to CPT code 97803. The
proposed direct PE inputs were reflected in the CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS proposed rule at www.cms.gov/PhysicianFeeSched/. We requested
public comment on this CY 2013 proposed value for HCPCS code G0447.
Comment: Commenters supported the proposed payment for HCPCS code
GO447. In addition, a commenter urged a change in our policy to allow
billing of multiple units of this code in one encounter. We also
received a comment that in the future CMS should use the AMA RUC to
assist us in valuing new codes.
Response: With regard to billing for multiple units of HCPCS code
G0447 in the same encounter, this proposal addresses only the payment
rate for, not the coverage of this code. We note that the NCD
establishes that coverage is for one visit per day of service. In
response to the suggestion that we rely upon AMA RUC input in valuing
new codes, we agree with the commenter that the input of the AMA RUC is
extremely useful in valuing new codes and in general, we obtain its
recommendations in establishing the original values for new codes.
However, because this new code was added through an NCD effective as of
October 14, 2011, public commenters, including the AMA RUC, were not
able to comment for consideration for CY 2012. We note that since this
code was valued in CY 2012 based upon CPT code 97803 and AMA RUC had
provided recommendation on this code previously, the AMA RUC was
involved, albeit indirectly, in setting this rate. In addition, there
was opportunity for the AMA RUC to provide comment on this code in the
response to the solicitation for comment on the CY 2013 proposed rule.
After the consideration of the public comments we received, we are
finalizing the proposed work RVU of 0.45 and a time of 15 minutes for
HCPCS G0447 code. For malpractice expense, we are finalizing our
proposal to crosswalk HCPCS code G0447 to CPT code 97803. We are also
finalizing the direct PE inputs as proposed. The direct PE inputs
associated with this code are included in the CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule with comment period at http://www.cms.gov/PhysicianFeeSched/. Additionally, we note that the PE RVUs included in
Addendum B reflect the values that result from the finalization of this
policy.

K. Certified Registered Nurse Anesthetists Scope of Benefit

The benefit category for services furnished by a certified
registered nurse anesthetist (CRNA) was added in section 1861(s)(11) of
the Act by section 9320 of the Omnibus Budget Reconciliation Act (OBRA)
of 1986. Since this benefit was implemented on January 1, 1989, CRNAs
have been eligible to bill Medicare directly for services within this
benefit category. Section 1861(bb)(2) of the Act defines a CRNA as ``a
certified registered nurse anesthetist licensed by the State who meets
such education, training, and other requirements relating to anesthesia
services and related care as the Secretary may prescribe. In
prescribing such requirements the Secretary may use the same
requirements as those established by a national organization for the
certification of nurse anesthetists.''
Section 410.69(b) defines a CRNA as a registered nurse who: (1) Is
licensed as a registered professional nurse by the State in which the
nurse practices; (2) meets any licensure requirements the State imposes
with respect to nonphysician anesthetists; (3) has graduated from a
nurse anesthesia educational program that meets the standards of the
Council on Accreditation of Nurse Anesthesia Programs, or such other
accreditation organization as may be designated by the Secretary; and
(4) meets one of the following criteria: (i) Has passed a certification
examination of the Council on Certification of Nurse Anesthetists, the
Council on Recertification of Nurse Anesthetists, or any other
certification organization that may be designated by the Secretary; or
(ii) is a graduate of a program described in paragraph (3) of

[[Page 69006]]

this definition and within 24 months after that graduation meets the
requirements of paragraph (4)(i) of this definition.
Section 1861(bb)(1) of the Act defines services of a CRNA as
``anesthesia services and related care furnished by a certified
registered nurse anesthetist (as defined in paragraph (2)) which the
nurse anesthetist is legally authorized to perform as such by the State
in which the services are furnished.'' CRNAs are paid at the same rate
as physicians for furnishing such services to Medicare beneficiaries.
Payment for services furnished by CRNAs only differs from physicians in
that payment to CRNAs is made only on an assignment-related basis
(Sec. 414.60) and supervision requirements apply in certain
circumstances.
At the time that the Medicare benefit for CRNA services was
established, anesthesia practice, for anesthesiologists and CRNAs,
largely occurred in the surgical setting and services other than
anesthesia (medical and surgical) were furnished in the immediate pre-
and post-surgery timeframe. The scope of ``anesthesia services and
related care'' as delineated in section 1861(bb)(1) of the Act
reflected that practice. As anesthesiologists and CRNAs have moved into
other practice settings, questions have arisen regarding what services
are encompassed under the benefit category's characterization of
``anesthesia and related care.'' As an example, some CRNAs now offer
chronic pain management services that are separate and distinct from a
surgical procedure. We recently received additional information about
upcoming changes to CRNA curricula to include specific training
regarding chronic pain management services. Such changes in CRNA
practice have prompted questions as to whether these services fall
within the scope of section 1861(bb)(1) of the Act.
As we noted in the CY 2013 proposed rule (77 FR 44788), Medicare
Administrative Contractors (MACs) have reached different conclusions as
to whether the statutory benefit category description of ``anesthesia
services and related care'' encompasses the chronic pain management
services furnished by CRNAs. The scope of the benefit category
determines the scope of services for which a physician, practitioner,
or supplier may receive Medicare payment. In order for the specific
services to be paid by Medicare, the services must be reasonable and
necessary for treatment of the patient's illness or injury.
To address what is included in the benefit category for CRNAs in
the CY 2013 proposed rule, we assessed our current regulations and
subregulatory guidance, and determined that the existing guidance does
not specifically address whether chronic pain management is included in
the CRNA benefit. In the Internet Only Manual (Pub 100-04, Ch 12, Sec
140.4.3), we discuss the medical or surgical services that fall under
the ``related care'' language stating: ``These may include the
insertion of Swan Ganz catheters, central venous pressure lines, pain
management, emergency intubation, and the pre-anesthetic examination
and evaluation of a patient who does not undergo surgery.'' Some have
interpreted the reference to ``pain management'' in this language as
authorizing direct payment to CRNAs for chronic pain management
services, while others have taken the view that the services
highlighted in the manual language are services furnished in the
perioperative setting and refer only to acute pain management
associated with the surgical procedure.
After assessing in the proposed rule (see 77 FR 44788) the
information available to us, we concluded that chronic pain management
was an evolving field, and we recognized that certain states have
determined that the scope of practice for a CRNA should include chronic
pain management to meet health care needs of their residents and ensure
their health and safety. We also found that several states, including
California, Colorado, Missouri, Nevada, South Carolina, and Virginia,
were debating whether to include pain management in the CRNA scope of
practice. After determining that the scope of practice for CRNAs was
evolving and that there was not a clear answer on pain management
specifically, we proposed to revise our regulations at Sec. 410.69(b)
to define the statutory benefit for CRNA services with deference to
state scope of practice laws. Specifically, we proposed to add the
following language: ``Anesthesia and related care includes medical and
surgical services that are related to anesthesia and that a CRNA is
legally authorized to perform by the state in which the services are
furnished.'' We explained that this proposed definition would set a
Medicare standard for the services that can be furnished and billed by
CRNAs while allowing appropriate flexibility to meet the unique needs
of each state. The proposal also dovetailed with the language in
section 1861(bb)(1) of the Act requiring the state's legal
authorization to furnish CRNA services as a key component of the CRNA
benefit category. Finally, we stated that the proposed benefit category
definition was also consistent with our policy to recognize state scope
of practice as defining the services that can be furnished and billed
by other NPPs.
The following is a summary of the comments we received regarding
the proposal to revise our regulations at Sec. 410.69(b) to define the
statutory description of CRNA services. We received a significant
volume of comments from specialty groups, individual physicians, and
practitioners, including CRNAs and Student Registered Nurse
Anesthetists (SRNAs), educational program directors, and patients, who
strongly supported defining the CRNA benefit broadly. There were also
many commenters who strongly opposed this proposal, including specialty
groups, individual physicians and practitioners, patients, educational
program directors, and a patient advocacy group.
Comment: Among those supporting the concept of our proposal, we
received several comments suggesting alternative regulatory definitions
of the statutory benefit category phrase, ``anesthesia and related
care.'' Many commenters said that CMS should allow CRNAs to practice to
the full extent of state law. Some commenters provided alternative
definitions for anesthesia and related care. These included ``medical
and surgical services that are related to anesthesia or that a CRNA is
legally authorized to perform by the State in which the services are
furnished,'' ``medical and surgical services that are related to
anesthesia, including chronic pain management services unless
specifically prohibited or outside the scope of the CRNA's license to
practice,'' ``medical services, surgical services, and chronic and
acute pain management services that a CRNA is legally authorized to
perform by the State in which the services are furnished,'' ``medical
and surgical services a CRNA is legally authorized to perform by the
state in which services are furnished and which are done to provide
surgical or obstetrical anesthesia or alleviate post-operative or
chronic pain,'' and ``medical and surgical services that are related to
anesthesia, including chronic pain management, unless a CRNA is legally
prohibited to perform by the State in which the services are
furnished.'' One commenter made the point that Medicare should use a
definition that included coverage of advanced practice registered nurse
services that are within the scope of practice under applicable state
law, just as physicians' services are now covered.

[[Page 69007]]

Other commenters referenced preamble text in our 1992 final rule,
which states ``we describe related care services as * * * pain
management services, and other services not directly connected with the
anesthesia service or associated with the surgical service'' and noted
that historically, related care services have been recognized as a
different class of anesthesia services, which may or may not be related
to anesthesia. One commenter requested that we define ``related care''
separately from anesthesia, as ``medical and surgical services not
directly related to anesthesia, including but not limited to the
insertion of arterial lines, central venous pressure lines, and Swan
Ganz catheters, acute and chronic pain management and emergency
intubation, and that a CRNA is legally authorized to perform by the
state in which the services are furnished.''
Some commenters pointed to Medicare policies allowing other
advanced practice nurses such as nurse practitioners or clinical nurse
specialists to furnish and bill for physicians' services as support for
recognizing a similar interpretation of the scope of CRNA practice.
Commenters stated that CRNAs should be able to practice to the full
extent of state law. Commenters cited the Institute of Medicine report
[The Future of Nursing: Leading Change, Advancing Health, 11/17/10]
that stated that nurses should be able to practice to the full extent
of their education and training.
Our proposal to define related care as ``related to anesthesia''
resulted in various views as to whether this would include pain
management and other services. Some stated that it restricted the
benefit category, but others believed that it expanded it. The
commenters further stated that there are no chronic, long-term,
anesthesia related services that occur outside the operating room or
recovery room where the practice of anesthesia is appropriate. Others
stated that chronic pain management services are outside the scope of
perioperative related care defined in the Act, and that chronic pain is
not related to anesthesia.
Response: After reviewing comments regarding our proposed
definition of ``anesthesia and related care,'' we believe that the
proposed regulation language stating that ``Anesthesia and related care
includes medical and surgical services that are related to anesthesia
and that a CRNA is legally authorized to perform by the state in which
the services are furnished'' would not accomplish our goals. It would
require updating as health care evolves and as CRNA practice changes.
It also would continue Medicare's differentiation between CRNAs and
other NPPs because the Medicare benefit for other NPPs relies more
heavily on the NPPs' authority under state law. In addition, we agree
with commenters that the primary responsibility for establishing the
scope of services CRNAs are sufficiently trained and, thus, should be
authorized to furnish, resides with the states. We agree with
commenters that, as CRNA training and practice evolve, the state scope
of practice laws for CRNAs serve as a reasonable proxy for what
constitutes ``anesthesia and related care.'' Therefore, we are revising
Sec. 410.69(b) to define the statutory benefit category for CRNAs,
which is specified as ``anesthesia and related care,'' as ``those
services that a certified registered nurse anesthetist is legally
authorized to perform in the state in which the services are
furnished.'' By this action, we are defining the Medicare benefit
category for CRNAs as including any services the CRNA is permitted to
furnish under their state scope of practice. In addition, this action
results in CRNAs being treated similarly to other advanced practice
nurses for Medicare purposes. This policy is consistent with the
Institute of Medicine's recommendation that Medicare cover services
provided by advanced practice nurses to the full extent of their state
scope of practice. CMS will continue to monitor state scope of practice
laws for CRNAs to ensure that they do not expand beyond the appropriate
bounds of ``anesthesia and related care'' for purposes of the Medicare
program.
Comment: Some commenters suggested that the proposal expands the
scope of practice of CRNAs into the practice of medicine, and that the
proposal undermines medical education, the practice of medicine, and
the pain medicine specialty by equating nurses with physicians.
Commenters further stated that such proposals, which lead to
privileging and reimbursement for nonphysician practitioners that are
identical to that of physicians, decrease the incentives to complete
the rigorous training involved in medical school. Others stated that
the proposal would interfere with the authority of states to regulate
scope of practice.
Response: We acknowledge the concerns of the physician community;
however, the intent of the proposal is not to undermine medical
education, the practice of medicine, or the pain medicine specialty,
but to establish parity between the scope of the Medicare benefit
category for CRNAs and the CRNA authority to practice under state law.
This proposal does not address payment rates for anesthesiologists or
CRNAs. The statutory provisions that establish payment rates for CRNAs
at the same rate as anesthesiologists are relatively longstanding. Our
proposal in no way is intended to interfere with the authority of
individual states; rather, it largely defers to individual states to
determine the scope of practice for CRNAs. We believe that using state
scope of practice law as a proxy for services encompassed in the
statutory benefit language ``anesthesia and related care'' is
preferable to choosing among individual interpretations of whether
particular services fall within the scope of ``anesthesia and related
care.'' Moreover, we believe states are in an ideal position to gauge
the status of, and respond to changes in, CRNA training and practice
over time that might warrant changes in the definition of the scope of
``anesthesia services and related care'' for purposes of the Medicare
program. As such, we believe it is appropriate to look to state scope
of practice law as a proxy for the scope of the CRNA benefit.
Comment: Many commenters addressed the extent to which the
standards for nurse anesthesia curricula and the content of nurse
anesthesia educational programs do or do not prepare CRNAs to practice
outside the perioperative setting, and specifically, to furnish chronic
pain services. We received detailed comments regarding the necessary
components of chronic pain services and conflicting information about
whether CRNAs are trained or licensed to furnish such services. We
received thorough descriptions of the skills required to furnish
chronic pain services and the necessity of medical education to prepare
one to furnish such services. Commenters also provided information
about the inherent dangers involved in chronic pain services, the
manner in which technical skills in chronic pain procedures are
obtained, and the ways in which chronic pain services are or are not
similar to other procedures performed by CRNAs in the perioperative
setting and for labor epidurals. We received many comments from the
physician community with concerns about the possibility of the
furnishing of procedures that are not indicated due to lack of medical
knowledge required to screen out patients who are not appropriate
candidates for procedures.
Some commenters pointed to the long period of time during which
CRNAs have furnished chronic pain services with no documented
differences in

[[Page 69008]]

patient outcomes, while others expressed concern about negative
outcomes observed from inadequately trained providers. Descriptions
were also provided regarding lawsuits at the state level that have
debated whether CRNAs are qualified to furnish chronic pain services,
the importance of medical regulation in protecting patients who may not
be able to differentiate between different types of providers, and the
role of the medical education process in ensuring competency of
physicians. Other commenters opined that it is the responsibility of
the individual provider to assure his or her competency for any and all
procedures furnished.
Response: We acknowledge the varying perspectives about the
education and training of CRNAs to furnish chronic pain management
services as well as differences of opinion regarding the safety of
chronic pain management services furnished by CRNAs. We are unable, at
this time, to assess the appropriateness of the CRNA training relating
to specific procedures. We are also unaware of any data regarding the
safety of chronic pain management services when furnished by different
types of professionals. However, we expect that states take into
account all appropriate practitioner training and certifications, as
well as the safety of their citizens, when making decisions about the
scope of services CRNAs are authorized to furnish and providing
licenses to individual practitioners in their jurisdictions.
We note that we did not address the services that CRNAs are trained
and qualified to furnish in our proposal or in this final rule with
comment period. Our proposal and this final rule merely define what
services are included in the scope of the Medicare benefit established
in section 1861(bb)(1) of the Act. The definition that we are adopting
uses the state scope of practice as a proxy for what the term
``anesthesia and related care'' in section 1861(bb)(1) of the Act means
and thus leaves decisions about what services constitute anesthesia and
related care to be resolved by the state. This appropriately recognizes
the actions of state bodies formed specifically to address the issue of
what constitutes the scope of practice for a CRNA. We believe that
determining whether or not CRNAs are adequately trained and can safely
furnish chronic pain management is an appropriate decision for state
bodies. This proposal is consistent with the Institute of Medicine's
report on advanced practice nursing, which recommends that Medicare
should ``include coverage of advanced practice registered nurse
services that are within the scope of practice under applicable state
law, just as physicians' services are now covered.''
We agree with commenters that it also is the responsibility of
individual practitioners (physicians and CRNAs) to ensure that they are
adequately trained and qualified to furnish any and all procedures that
they furnish.
Comment: We received comments about the cost of CRNA services
relative to those furnished by anesthesiologists. Commenters stated
that chronic pain management services are less costly than surgical
interventions, and that the services of CRNAs are more cost-effective
for the Medicare program. Others stated that allowing CRNAs to furnish
these services could increase spending due to the provision of
inappropriate services and the complications that could result from
procedures furnished by CRNAs who are not adequately trained.
Response: We do not have sufficient evidence to determine that
chronic pain management interventions reduce the need for surgical
interventions, or that there would be increased provision of
inappropriate services and complications under a definition of the
Medicare benefit category that defines ``anesthesia and related care''
as services a CRNA is authorized to furnish in his or her state.
Spending for services under Medicare is not a factor in determining
whether the statutory benefit encompasses particular services. However,
we would note that CRNAs are generally paid at the same rate as
anesthesiologists so there are no direct cost savings when services are
furnished by CRNAs.
Comment: We received comments regarding special concerns about
access in rural areas. Commenters stated that CRNAs help patients avoid
traveling long distances and long waits for appointments by having
local providers available. Furthermore, commenters noted that as the
population ages, the demand for chronic pain management services will
increase. Commenters stated that decreased access to chronic pain
management services (which would result if CRNAs are not permitted to
furnish and bill for these services) would result in more
institutionalization, reduced quality of life, longer wait times, and
increased costs. Others stated that chronic pain management services
are not emergent care services; that chronic pain management is a
specialty that should be furnished by those with a high degree of sub-
specialty training, and that pain physicians can be spread out over
large areas since only a small minority of patients need procedural
care. Some commenters cited a shortage of pain management physicians
qualified to treat chronic pain, others stated that there is no
shortage of such providers, while still others stated that the proposal
may increase access, but at the expense of having unqualified
providers. Finally, some commenters stated that procedures furnished
improperly pose a greater danger than a lack of available services.
Response: While assuring access for beneficiaries in rural areas is
a priority for Medicare, we do not have sufficient data to evaluate the
presence or degree of problems of access to chronic pain management
services in rural areas. We also do not have evidence that CRNAs have
furnished chronic pain management services in quantities sufficient to
improve any access problems in rural areas. We further lack sufficient
data to determine whether beneficiaries who lack access to a CRNA care
are more likely to suffer the negative outcomes cited by commenters.
This lack of information does not deter us taking action to define the
statutory benefit as it is not necessary to conclude that beneficiaries
will suffer negative consequences to prompt us to act. Rather we are
issuing this regulation based upon the factors we described above.
Comment: We received comments regarding those services included in
the definition of anesthesia and related care, as well as services
``related to anesthesia.'' Some commenters stated that chronic pain
management services are not directly ``related to anesthesia'' but
still constitute ``related care''. Other commenters stated that CMS has
already acknowledged in early preamble language that CRNAs may furnish
services not directly related to anesthesia. Still other commenters
stated that chronic pain services are not related to anesthesia in any
way. One commenter suggested that CMS has already differentiated
between anesthesia related acute pain and interventional chronic pain
based on the creation of different specialty codes for anesthesia and
chronic pain. One commenter requested that CMS make a regulatory change
to allow CRNAs to order diagnostic tests in order to effectively
provide chronic pain management services.
Response: We believe that the statutory intent was to include
services not directly related to the peri-anesthetic setting in the
CRNA benefit category. We believe that relying on state scope of
practice to define the services encompassed in anesthesia and related
care is preferable to choosing among conflicting definitions of

[[Page 69009]]

``anesthesia and related care'' or listing the specific services that
fall within that benefit category. Rather, we believe states are in a
better position to gauge the status of, and respond to changes in, CRNA
training and practice over time that might warrant changes in the
definition of the scope of ``anesthesia services and related care'' for
purposes of the Medicare program. As such, we believe it is appropriate
to look to state scope of practice law as a proxy for the scope of the
CRNA benefit.
Comment: Several commenters expressed concern with the wording of
our proposal; specifically, that the term ``related to anesthesia'' was
unclear and subject to interpretation. States do not typically define
services ``related to anesthesia'' in their state scope of practice
acts.
Response: We agree with commenters that the wording of the proposal
was unclear. In response to these and other commenter concerns, we are
adopting a modification of our proposal to rely on state scope of
practice to define the services encompassed in ``anesthesia and related
care'' under section 1861(bb)(1) of the Act.
Comment: One commenter requested that we provide clarification for
the payment of CRNA services furnished; specifically, which medical
and/or surgical CRNA services are eligible for cost-based reimbursement
(for CRNA pass-through payments or Method II billing for Critical
Access Hospitals).
Response: We will be modifying the Internet Only Manual to reflect
the change we are making in this final rule with comment period. The
request for the list of services that are eligible for cost-based
reimbursement is beyond the scope of this rule, as it pertains to
hospital billing. We anticipate this matter will be addressed
separately in a forthcoming transmittal.
Comment: Commenters requested that CMS instruct Medicare
contractors to review prior denials of claims for CRNA services prior
to any final rule determination of the scope of the CRNA Medicare
benefit category.
Response: This definition of the Medicare benefit for CRNAs will be
effective for services furnished on or after January 1, 2013. It does
not apply to services furnished prior to this point so we will not be
instructing contractors to review prior denials of claims.
After consideration of all comments, we are finalizing our proposal
with modification to revise our regulations at Sec. 410.69(b) to
define ``Anesthesia and related care'' under the statutory benefit for
CRNA services as follows: ``Anesthesia and related care means those
services that a certified registered nurse anesthetist is legally
authorized to perform in the state in which the services are
furnished.'' We will continue to monitor the state scope of practice
laws for CRNAs in order to insure that the use of state scope of
practice as a proxy to define ``anesthesia services and related care''
is consistent with the goals and needs of Medicare program.

L. Ordering of Portable X-Ray Services

Portable x-ray suppliers furnish diagnostic imaging services at a
beneficiary's location. These services are most often furnished in
residences, including private homes and alternative living facilities
(for example, nursing homes) rather than in a traditional clinical
setting (for example, a doctor's office or hospital). The supplier
transports mobile diagnostic imaging equipment to the beneficiary's
location, sets up the equipment, and administers the test onsite. The
supplier may interpret the results itself or it may furnish the results
to an outside physician for interpretation. Portable x-ray services may
avoid the need for expensive ambulance transport of frail beneficiaries
to a radiology facility or hospital.
Our Medicare Conditions for Coverage (CfC) regulations require that
``portable x-ray examinations are performed only on the order of a
doctor of medicine (MD) or doctor of osteopathy (DO) licensed to
practice in the state * * *'' (Sec. 486.106(a)). With the exception of
portable x-ray services, Medicare payment regulations at Sec.
410.32(a) allow physicians, as defined in section 1861(r) of the Act,
and certain nonphysician practitioners at Sec. 410.32(a)(2) to order
diagnostic x-ray tests, diagnostic laboratory tests, and other
diagnostic tests as long as those nonphysician practitioners are
operating within the scope of their authority under state law and
within the scope of their Medicare statutory benefit. Physicians other
than an MD or DO recognized to order diagnostic tests under Sec.
410.32(a) include the following limited-license practitioners: Doctor
of optometry, doctor of dental surgery and doctor of dental medicine,
and doctor of podiatric medicine. Nonphysician practitioners authorized
to order diagnostic tests under Sec. 410.32(a)(2) include nurse
practitioners, physician assistants, clinical nurse specialists,
certified nurse-midwives, clinical psychologists, and clinical social
workers. Nonphysician practitioners have become an increasingly
important component of clinical care, and we believe that delivery
systems should take full advantage of all members of a healthcare team,
including nonphysician practitioners.
Although current Medicare regulations limit the ordering of
portable x-ray services to a MD or a DO, the Office of the Inspector
General (OIG) in its December 2011 report entitled Questionable Billing
Patterns of Portable X-Ray Suppliers (OEI-12-10-00190) found that
Medicare was paying for portable x-ray services ordered by physicians
other than MDs and DOs, including podiatrists and chiropractors, and by
nonphysician practitioners. We issued a special education article on
January 20, 2012, through the Medicare Learning Network (MLN)
``Important Reminder for Providers and Suppliers Who Provide Services
and Items Ordered or Referred by Other Providers and Suppliers,''
reiterating our current policy that portable x-ray services can only be
ordered by a MD or DO. The article is available at http://www.cms.gov/MLNMattersArticles/downloads/SE1201.pdf on the CMS Web site. Since the
publication of the above mentioned article, several stakeholders have
told us that members of the healthcare community fail to distinguish
ordering for portable x-ray services from ordering for other diagnostic
services where our general policy is to allow nonphysician
practitioners and physicians other than MDs and DOs to order diagnostic
tests within the scope of their authority under state law and their
Medicare statutory benefit. They report finding the different
requirements confusing.
We proposed to revise our current regulations, which limit ordering
of portable x-ray services to only a MD or DO, to allow other
physicians and nonphysician practitioners acting within the scope of
their Medicare benefit and state law to order portable x-ray services.
Specifically, we proposed revisions to the CfC at Sec. 486.106(a) and
Sec. 486.106(b) to permit portable x-ray services to be ordered by a
physician or nonphysician practitioner in accordance with the ordering
policies for other diagnostic services under Sec. 410.32(a).
This proposed change would allow a MD or DO, as well as a nurse
practitioner, clinical nurse specialist, physician assistant, certified
nurse-midwife, doctor of optometry, doctor of dental surgery and doctor
of dental medicine, doctor of podiatric medicine, clinical
psychologist, and clinical social worker to order portable x-ray
services within the scope of their authority under state law and the
scope of their Medicare benefit. Although all of these physicians and
nonphysician practitioners are authorized to order

[[Page 69010]]

diagnostic services in accordance with Sec. 410.32(a), their Medicare
benefit and state scope of practice delimits the services that they can
furnish. For example, the state scope of practice for clinical
psychologists typically is limited to the diagnosis and treatment of
mental health disorders and related services. The scope of the Medicare
benefit for clinical social workers under 1861(hh) of the Act limits
their ability to order diagnostic tests to mental health related tests.
Comment: The majority of commenters supported allowing additional
nonphysician and limited-license practitioners to order portable x-ray
services. The commenters stated that this proposal is consistent with
the increasing role for practitioners other than MDs or DOs in health
care delivery today, with nonphysician and limited license practitioner
training and practice, with staffing decisions for care furnished in
nursing homes and other home care settings, and with the scope of
practice for various practitioners under state law.
Response: We thank the commenters for their support and agree with
these comments. As we stated in the CY 2013 PFS proposed rule, we
believe nonphysician practitioners have become an increasingly
important component of clinical care, and we believe that delivery
systems should take full advantage of all members of a healthcare team,
including nonphysician practitioners. Allowing limited-license and
nonphysician practitioners to order portable x-ray services within the
scope of their practice will enhance the role of those practitioners.
Comment: Some commenters either questioned or opposed the ability
of certain nonphysician or limited-license practitioners to order
portable x-ray services. The commenters stated that by including
clinical psychologists and clinical social workers, our proposal was
too broad as these nonphysician practitioners do not have the
appropriate education or training to order portable x-ray services. In
addition, they noted that the ordering of portable x-ray services is
not within clinical psychologists' and clinical social workers' state
scopes of practice. One commenter stated that the ordering authority
for portable x-ray services should only be expanded to physician
assistants, nurse practitioners, and doctors of podiatric medicine,
stating that there is no convincing or clinically supportable rationale
for other practitioners identified in Sec. 410.32(a), including
certified nurse-midwives, doctors of optometry, doctors of dental
surgery and doctors of dental medicine, clinical social workers, and
clinical psychologists, to order portable x-ray services. A few
commenters stated that some nonphysician and limited-license
practitioners have not been trained to diagnose an illness, to use x-
rays as part of the diagnosis and treatment of a beneficiary, to know
how to interpret an x-ray, and to plan a course of medically
appropriate follow-up treatment. Commenters requested the clinical
rationale and FY 2011 data on portable x-ray ordering by select
nonphysician practitioners. One commenter stated that deferring to
state scope of practice laws for limited- license and nonphysician
practitioners did not constitute sufficient stewardship by Medicare to
ensure payment for appropriate services.
Response: We disagree. We proposed to modify our rule for ordering
portable x-ray services to make it consistent with rules for ordering
all other diagnostic tests. Our proposed policy would eliminate the
specific requirements limiting the types of practitioners who can order
portable x-ray services, and instead place ordering for portable x-ray
services under the general regulations governing ordering of diagnostic
tests in Sec. 410.32(a)(2). Under Sec. 410.32(a)(2), limitations on
the ability of various practitioners to order diagnostic tests are
established by the practitioner's scope of practice under state law and
the scope of the practitioner's Medicare benefit. The current
regulation applies to x-rays (other than portable x-rays), MRI, CT
scans, and a host of other diagnostic tests that are more complex and
potentially higher risk than portable x-ray services. We do not believe
that nonphysician and limited-license practitioners who can routinely
order and employ the results of reasonable and necessary x-rays, MRIs,
and CT scans should continue to be precluded from ordering and
utilizing portable x-ray imaging in the same manner. Further, most of
the nonphysician practitioners listed in Sec. 410.32(a)(2) are
authorized by statute to furnish physician services under the scope of
their Medicare benefit and state scope of practice, including ordering,
interpreting, and using test results to treat a beneficiary.
With regard to clinical social workers, under section 1861(hh) of
the Act, the scope of their Medicare benefit is further limited to
services ``for the diagnosis and treatment of mental illnesses.''
Therefore, the proposed change to our regulations to allow clinical
social workers to order portable x-ray services in the same way that
they are permitted to order other diagnostic tests under Sec.
410.32(a) would not allow clinical social workers to order portable x-
ray services. Portable x-ray services fall within the scope of the
Medicare benefit for the remaining nonphysician and limited-license
practitioners, including clinical psychologists. As noted above, we
believe state scope of practice laws might limit ordering of portable
x-ray services by clinical psychologists or other practitioners.
Additionally, certain other practitioners are unlikely to have a reason
to order portable x-ray services, such as doctors of optometry. We have
no evidence to suggest that clinical psychologists or other limited
license or nonphysician practitioners are ordering significant numbers
of x-rays, CTs, and MRIs under Sec. 410.32(a) authority at this time.
We do not expect any marked change in ordering patterns following the
change in regulation to allow for ordering of portable x-ray services.
With regard to the request for FY 2011 data on portable x-ray
ordering by select nonphysician practitioners, we do not believe this
or any recent data on portable x-ray ordering patterns for limited-
license or nonphysician practitioners would be meaningful information
regarding future potential ordering patterns for portable x-ray
services because these practitioners are not permitted to order
portable x-ray services under the current regulation. We believe our
proposal is consistent with our current regulations that generally
allow nonphysician practitioners to order diagnostic services, and the
agency's interest in having delivery systems take full advantage of all
members of a healthcare delivery team. We describe below our intention
to design monitoring systems that will capture excessive ordering.
Comment: Several commenters requested that CMS clarify that the
proposal for CY 2013 is actually a clarification of long standing
policy that nonphysician practitioners have been able to order portable
x-ray services since implementation of the their authority to order
diagnostic tests under Sec. 410.32(a)(2) and requested that CMS
indicate that this authority is not a change in policy effective
January 1, 2013. Commenters stated that the regulations at Sec.
410.32(a), established as a result of the Balanced Budget Act (BBA) of
1997 (Pub. L. 105-33), were promulgated long after the 1969 CfC
requirement at Sec. 486.106 and that the more recent regulation trumps
older requirements. These commenters stated that it was merely an
oversight on the part of CMS when the agency failed to update the
regulations at Sec. 486.106. They also stated that some manual
language and educational materials have

[[Page 69011]]

been inconsistent in communicating that only MDs or DOs can order
portable x-ray services over the years. Commenters requested that if
CMS does conclude that allowing nonphysician and limited-license
practitioner ordering of portable x-ray services is a change in policy
for CY 2013, then CMS should specify in the preamble that no repayments
or other actions are required, including recoupment efforts as a result
of the OIG's findings in the December 2011 report entitled Questionable
Billing Patterns of Portable X-ray Suppliers (OEI 12-10-00190).
Response: There is a longstanding regulation requiring ordering of
portable x-ray services by an MD or DO at Sec. 486.106(a) and Sec.
486.106(b). There is a specific section of the regulation under Sec.
410.32 dedicated to portable x-ray services, Sec. 410.32(c), that
explicitly cross-references the requirements under Sec. 486.106. As
such, we do not believe that, when revising the regulation at Sec.
410.32 to expand the general rules for ordering diagnostic tests under
the BBA, the agency simply failed to notice the requirement in the same
section relating to portable x-ray tests. Further, the specific
requirement for MD or DO ordering of portable x-ray services under
Sec. 410.32(c) explicitly excepts portable x-ray services from the
general ordering rules under Sec. 410.32(a). The only means to revise
the regulations containing this longstanding CfC is through notice and
comment rulemaking, which was the purpose of the proposal we made in
the CY 2013 proposed rule. The change in policy to allow limited-
license and nonphysician practitioners to order portable x-ray services
will be effective beginning in CY 2013.
The OIG report concluded, and CMS concurred, that CMS should recoup
payment for portable x-ray services identified under the report as
ordered by limited-license physicians and nonphysician practitioners,
other than a MD or DO in accordance with our regulations at Sec.
410.32(c) and Sec. 486.106 since this was consistent with this
recommendation. We will continue our recoupment efforts in response to
the OIG report. However, we have instructed our payment contractors
that the ordering of portable x-ray services should not be made a
priority for additional medical review activity beyond claims
identified in the OIG audit.
After considering the public comments received, we are finalizing
our CY 2013 proposal to revise the CfC at Sec. 486.106(a) and Sec.
486.106(b) to permit portable x-ray services to be ordered by
physicians or nonphysician practitioners in accordance with the general
ordering policies for other diagnostic services as specified under
Sec. 410.32(a). Therefore, effective for services furnished on or
after January 1, 2013, the following practitioners will be permitted to
order portable x-rays in accordance with Medicare regulations and
subject to their scope of practice under state law and their applicable
Medicare statutory benefit: A physician (including an MD or a DO,
doctor of optometry, doctor of dental surgery and doctor of dental
medicine, and doctor of podiatric medicine), or a nurse practitioner,
clinical nurse specialist, physician assistant, certified nurse-
midwife, or clinical psychologist, where the ordering of portable x-ray
services is within the scope of their practice under state law. As
discussed above, although clinical social workers are permitted to
order diagnostic tests under Sec. 410.32(a)(2), the scope of their
Medicare benefit is limited to services for the diagnosis and treatment
of mental illnesses. As such, we do not believe these nonphysician
practitioners would need to order portable x-ray services. We also are
finalizing revisions to the language included under Sec. 410.32(c)
specific to portable x-ray services to recognize the same authority for
physicians and nonphysician practitioners to order diagnostic tests as
is prescribed for other diagnostic services under Sec. 410.32(a).
Finally, we are finalizing two technical corrections that we proposed
to make in the CY 2013 PFS proposed rule. One is to Sec. 410.32(d)(2),
where we currently cite paragraph (a)(3) for the definition of a
qualified nonphysician practitioner. The definition of a qualified
nonphysician practitioner is currently found in paragraph (a)(2), while
paragraph (a)(3) does not exist; therefore, we are correcting the
citation. The second technical correction is in Sec. 410.32(b)(2)(iii)
to better reflect the statutory authority to furnish neuropsychological
testing in addition to psychological testing. We did not receive any
comments on these proposed technical corrections. The documentation
requirement for this paragraph remains unchanged.
Although we believe it is appropriate to finalize policy to allow
nonphysician practitioners and limited-license practitioners to order
portable x-ray services within the scope of their authority under state
law and the scope of their Medicare statutory benefit given overall
changes in health care delivery practice patterns since the beginning
of the Medicare program, we remain concerned about the OIG's recent
findings. The OIG observed other questionable billing patterns for
portable x-ray services in addition to ordering by nonphysician
practitioners. Of specific note was the observation that some portable
x-ray suppliers are furnishing services on the same day that the
beneficiary also receives services in a clinical setting, such as the
physician office or hospital. Under current regulations at Sec.
486.106(a)(2), the order for portable x-ray services must include a
statement concerning the condition of the beneficiary which indicates
why portable x-ray services are necessary. If, on the same day that a
portable x-ray service was furnished, the patient was able to travel
safely to a clinical setting, we believe the statement of need for
portable x-ray services could be questionable. We also are concerned
that the OIG observed some portable x-ray suppliers billing for
multiple trips to a facility on the same day Medicare makes a single
payment for each trip the portable x-ray supplier makes to a particular
location. We make available several modifiers to allow the portable x-
ray supplier to indicate the number of beneficiaries served on a single
trip to a facility. We expect portable x-ray suppliers to use those
modifiers and not to bill multiple trips to the same facility on a
single day when only one trip was made. Additionally, we strongly
encourage portable x-ray suppliers to make efficient use of resources
and consolidate trips, to the extent it is clinically appropriate to do
so, rather than making multiple trips on the same day.
Comment: Several stakeholders provided scenarios where a portable
x-ray service would be medically necessary on the same day as a
hospital, physician office, or other clinical setting.
Response: We agree that there may be unusual circumstances when
portable x-ray services could be appropriate with a same day visit to a
hospital, physician office, or other clinical setting. Proper
documentation of the rationale for such same day occurrences would be
required to substantiate the necessity for those services.
In conjunction with our proposal to expand the scope of physicians
and nonphysician practitioners who can order portable x-ray services,
we intend to develop, as needed, monitoring standards predicated by
these and other OIG findings. In addition, we will be conducting data
analysis of ordering patterns for portable x-ray and other diagnostic
services to determine if additional claims edits, provider audits, or
fraud investigations are required to prevent abuse of these services
and to allow for the collection of any potential

[[Page 69012]]

overpayments. We encourage physicians and practitioners, as with any
diagnostic test, to proactively determine and document the medical
necessity for this testing.
Comment: One commenter noted that our proposal to expand the scope
of ordering for portable x-ray services was at odds with our statements
indicating our intent to engage in greater monitoring of the delivery
of portable x-ray services overall. The commenter recommended that we
target any new program integrity efforts to practitioner groups where
there is evidence of abuse.
Response: We disagree. We believe allowing nonphysician and
limited-license practitioners to order portable x-ray services is
consistent with statutory authority and changes in health care
delivery. Any monitoring effort would target more generally, the
utilization and delivery of portable x-ray services, of which of the
actual x-ray service is only one small component.
In the proposed rule (77 FR 44791), we solicited comments and
suggestions for updating the current regulations at 42 CFR Part 486,
Subpart C--Conditions for Coverage: Portable X-Ray Services through
future rulemaking. Below are our responses to public comments on
suggestions for future rulemaking at 42 CFR Part 486, Subpart C--
Conditions for Coverage: Portable X-Ray Services.
Comment: One commenter suggested CMS clarify the differences
between portable x-ray providers and mobile independent diagnostic
testing facilities (IDTFs). The commenter specifically recommended that
CMS clarify whether portable x-ray suppliers and mobile IDTFs can
furnish the same services to Medicare beneficiaries or whether there
are limitations on the types of services that portable x-ray suppliers
and IDTFs can furnish. The commenter also recommended that CMS
establish educational and training requirements for portable x-ray
suppliers and IDTF technicians.
Response: We appreciate these comments and will take them into
consideration when undertaking future rulemaking.

M. Addressing Interim Final Relative Value Units (RVUs) From CY 2012
and Establishing Interim Final RVUs for CY 2013

Section 1848(c)(2)(B) of the Act requires that we review RVUs for
physicians' services no less often than every 5 years. Under section
1848(c)(2)(K) of the Act (as added by section 3134 of the Affordable
Care Act), we are required to identify and revise RVUs for services
identified as potentially misvalued. To facilitate the review and
appropriate adjustment of potentially misvalued services, section
1848(c)(2)(K)(iii) specifies that the Secretary may use existing
processes to receive recommendations; conduct surveys, other data
collection activities, studies, or other analyses as the Secretary
determined to be appropriate; and use analytic contractors to identify
and analyze potentially misvalued services, conduct surveys or collect
data. In accordance with section 1848(c)(2)(K)(iii) of the Act, we
identify potentially misvalued codes, and develop and propose
appropriate adjustments to the RVUs, taking into account the
recommendations provided by the AMA RUC, the Medicare Payment Advisory
Commission (MedPAC), and other public commenters.
For many years, the AMA RUC has provided CMS with recommendations
on the appropriate relative values for PFS services. Over the past
several years, CMS and the AMA RUC have identified and reviewed a
number of potentially misvalued codes on an annual basis, based on
various identification screens for codes at risk for being misvalued.
This annual review of work RVUs and direct PE inputs for potentially
misvalued codes was further bolstered by the Affordable Care Act
mandate to examine potentially misvalued codes, with an emphasis on the
following categories specified in section 1848(c)(2)(K)(ii) (as added
by section 3134 of the Affordable Care Act):
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 ``Harvard-valued'' codes).
Other codes determined to be appropriate by the Secretary.
In addition to providing recommendations to CMS for work RVUs, the
AMA RUC's Practice Expense Subcommittee reviews, and then the AMA RUC
recommends, direct PE inputs (clinical labor, medical supplies, and
medical equipment) for individual services. To guide the establishment
of malpractice RVUs for new and revised codes before each Five-Year
Review of Malpractice, the AMA RUC also provides malpractice crosswalk
recommendations, that is, ``source'' codes with a similar specialty mix
of practitioners furnishing the source code and the new/revised code.
CMS reviews the AMA RUC recommendations on a code-by-code basis.
For AMA RUC recommendations regarding physician work RVUs, after
conducting a clinical review of the codes, we determine whether we
agree with the recommended work RVUs for a service (that is, whether we
agree the AMA RUC-recommended valuation is accurate). If we disagree,
we determine an alternative value that better reflects our estimate of
the physician work for the service.
Because of the timing of the CPT Editorial Panel decisions, the AMA
RUC recommendations, and our rulemaking cycle, we publish these work
RVUs in the PFS final rule with comment period as interim final values,
subject to public comment. Similarly, we assess the AMA RUC's
recommendations for direct PE inputs and malpractice crosswalks, and
establish PE and malpractice interim final values, which are also
subject to comment. We note that, with respect to interim final PE
RVUs, the aspect of our valuation that is open for public comment for a
new, revised, or potentially misvalued code is the direct PE inputs and
not the other elements of the PE valuation methodology, such as the
indirect cost allocation methodology, that also contribute to
establishing the PE RVUs for a code.
If we receive public comments on the interim final work RVUs for a
specific code indicating that refinement of the interim final work
value is warranted based on sufficient and new information from the
commenters concerning clinical aspects of the physician work associated
with the service (57 FR 55917) that were not already considered in
making the interim valuation or the AMA RUC deliberations, we refer the
service to a refinement panel, as discussed in further detail in
section III.M.1.a. of this final rule with comment period.
In the interval between closure of the comment period and the
subsequent year's PFS final rule with comment period, we consider all
of the public comments on the interim final work, PE, and malpractice
RVUs for the new, revised, and potentially misvalued codes and the
results of the refinement panel, if applicable. Finally, we address the
interim final RVUs (including the interim final direct PE inputs) by
providing a summary of the public comments and our responses to those
comments, including a discussion of any changes to the interim final
work or

[[Page 69013]]

malpractice RVUs or direct PE inputs, in the following year's PFS final
rule with comment period. We typically finalize the direct PE inputs
and the work, PE, and malpractice RVUs for the service in that year's
PFS final rule with comment period, unless we determine it would be
more appropriate to continue their interim final status for another
year and solicit further public comment.
1. Methodology
We conducted a clinical review of each code identified in this
section and reviewed the current and recommended work RVUs, intensity,
and time to furnish the pre-service, intra-service, and post-service
activities, as well as other components of the service that contribute
to the value. Our clinical review generally includes, but is not
limited to, a review of information provided by the AMA RUC and other
public commenters, medical literature, and comparative databases, as
well as a comparison with other codes within the Medicare PFS,
consultation with other physicians and healthcare professionals within
CMS and the Federal Government, and the views based on clinical
experience of the physicians on the PFS clinical review team. We also
assessed the methodology and data used to develop the recommendations
submitted to us by the AMA RUC and other public commenters and the
rationale for the recommendations. As we noted in the CY 2011 PFS final
rule with comment period (75 FR 73328 through 73329), there are a
variety of methodologies and approaches used to develop work RVUs,
including building block, survey data, crosswalk to key reference or
similar codes, and magnitude estimation. The building block methodology
is used to construct, or deconstruct, the work RVU for a CPT code based
on component pieces of the code. Components may include pre-, intra-,
or post-service time and post-procedure visits, or, when referring to a
bundled CPT code, the components could be considered to be the CPT
codes that make up the bundled code. Magnitude estimation refers to a
methodology for valuing physician work that determines the appropriate
work RVU for a service by gauging the total amount of physician work
for that service relative to the physician work for similar service
across the physician fee schedule without explicitly valuing the
components of that work. The resource-based relative value system
(RBRVS) has incorporated into it cross-specialty and cross-organ system
relativity. This RBRVS requires assessment of relative value and takes
into account the clinical intensity and time required to perform a
service. In selecting which methodological approach will best determine
the appropriate value for a service, we consider the current and
recommended physician work and time values, as well as the intensity of
the service, all relative to other services.
Several years ago, to aid in the development of pre-service time
recommendations for new and revised CPT codes, the AMA RUC created
standardized pre-service time packages. The packages include pre-
service evaluation time, pre-service positioning time, and pre-service
scrub, dress and wait time. Currently there are six pre-service time
packages for services typically furnished in the facility setting,
reflecting the different combinations of straightforward or difficult
procedure, straightforward or difficult patient, and without or with
sedation/anesthesia. Currently there are two pre-service time packages
for services typically furnished in the nonfacility setting, reflecting
procedures without and with sedation/anesthesia care.
We have developed several standard building block methodologies to
appropriately value services when they have very common billing
patterns. As we have discussed in past rulemaking, most recently in the
CY 2012 PFS final rule with comment period (76 FR 73107 through 73108),
in cases where a service is typically furnished to a beneficiary on the
same day as an evaluation and management (E/M) service, we believe that
there is overlap between the two services in some of the activities
furnished during the pre-service evaluation and post-service time. We
believe that at least one-third of the physician time in both the pre-
service evaluation and post-service period is duplicative of work
furnished during the E/M visit. Accordingly, in cases where we believe
that the AMA RUC has not adequately accounted for the overlapping
activities in the recommended work RVU and/or times, we adjust the work
RVU and/or times to account for the overlap. The work RVU for a service
is the product of the time involved in furnishing the service times the
intensity of the work. Pre-service evaluation time and post-service
time both have a long-established intensity of work per unit of time
(IWPUT) of .0224, which means that 1 minute of pre-service evaluation
or post-service time equates to .0224 of a work RVU. Therefore, in many
cases where we remove 2 minutes of pre-service time and 2 minutes of
post-service time from a procedure to account for the overlap with the
same day E/M service, we also remove a work RVU of .09 (4 minutes x
.0224 IWPUT) if we do not believe the overlap in time has already been
accounted for in the work RVU. We continue to believe this adjustment
is appropriate. The AMA RUC has recognized this valuation policy and,
in many cases, addresses the overlap in time and work when a service is
typically provided on the same day as an E/M service.
We appreciate the creation and use of these standardized pre-
service time packages. However, we believe that services that involve
only a local anesthetic agent do not typically involve the same amount
of pre-service time as procedures involving sedation or non-local
anesthesia care. We request that the AMA RUC consider assigning
services that require only local anesthesia without sedation to the
``no sedation/anesthesia care'' pre-service time package, or that the
AMA RUC create one or more new pre-service time packages to reflect the
pre-service time typically involved in furnishing local anesthesia
without sedation.
For many CPT codes that are typically billed on the same day as an
E/M service, the recommendations from the AMA RUC state that the AMA
RUC reviewed the work associated with the procedure, and adjusted the
pre-service and/or post-service time to account for the work that is
furnished as a part of the E/M service. For many codes, the AMA RUC
made this adjustment from the pre-service evaluation time included in
the AMA RUC-selected pre-service time package. However, as we noted
above, we believe that the pre-service time packages for procedures
with sedation or anesthesia care may overstate the time involved in
furnishing services that involve only local or topical anesthesia
without sedation. As a result, though the AMA RUC may have removed some
pre-service time from the package to account for the same day E/M
service, in a few instances, consistent with our established same day
E/M reduction methodology discussed above, we further reduced the AMA
RUC-recommended pre-service evaluation time to fully account for the
overlapping time with the same day E/M service.
2. Finalizing CY 2012 Interim and CY 2013 Proposed Values for CY 2013
In this section, we address the interim final values published in
the CY 2012 PFS final rule with comment period (76 FR 73026 through
73474), as subsequently corrected in the January 4, 2012 (77 FR 227
through 232) correction notice; and the proposed values published in
the CY 2013 PFS proposed

[[Page 69014]]

rule (77 FR 44722 through 45061). We discuss the results of the CY 2012
refinement panels for certain CY 2012 interim final code values,
respond to public comments received on specific interim final and
proposed values (including direct PE inputs), and address the other
new, revised, or potentially misvalued codes with interim final or
proposed values. The final CY 2013 direct PE database that lists the
direct PE inputs is available on the CMS Web site under the downloads
for the CY 2013 PFS final rule with comment period at: www.cms.gov/PhysicianFeeSched/. The final CY 2013 work, PE, and malpractice RVUs
are displayed in Addendum B to this final rule with comment period at:
www.cms.gov/PhysicianFeeSched/.
a. Finalizing CY 2012 Interim and Proposed Work RVUs for CY 2013
i. Refinement Panel
(1) Refinement Panel Process
As discussed in the 1993 PFS final rule with comment period (57 FR
55938), we adopted a refinement panel process to assist us in reviewing
the public comments on CPT codes with interim final work RVUs for a
year and in developing final work values for the subsequent year. We
decided the panel would be comprised of a multispecialty group of
physicians who would review and discuss the work involved in each
procedure under review, and then each panel member would individually
rate the work of the procedure. We believed establishing the panel with
a multispecialty group would balance the interests of the specialty
societies who commented on the work RVUs with the budgetary and
redistributive effects that could occur if we accepted extensive
increases in work RVUs across a broad range of services.
Depending on the number and range of codes that are subject to
refinement in a given year, we establish refinement panels with
representatives from four groups of physicians: Clinicians representing
the specialty most identified with the procedures in question;
physicians with practices in related specialties; primary care
physicians; and contractor medical directors (CMDs). Typical panels
have included 8 to 10 physicians across the four groups.
Following the addition of section 1848(c)(2)(K) to the Act by
Section 3134 of the Affordable Care Act, which authorized the Secretary
to review potentially misvalued codes and make appropriate adjustments
to the RVUs, we reassessed the refinement panel process. As detailed in
the CY 2011 PFS final rule with comment period (75 FR 73306), we
believed that the refinement panel process may provide an opportunity
to review and discuss the proposed and interim final work RVUs with a
clinically diverse group of experts, who then provide informed
recommendations. Therefore, we indicated that we would continue the
refinement process, but with administrative modification and
clarification. We also noted that we would continue using the
established composition that includes representatives from the four
groups of physicians--clinicians representing the specialty most
identified with the procedures in question, physicians with practices
in related specialties, primary care physicians, and CMDs.
One change relates to the calculation of the refinement panel
results. The basis of the process is that following discussion of the
information but without an attempt to reach a consensus, each member of
the panel votes independently. Historically, the refinement panel's
recommendation to change a work value or to retain the interim value
had hinged solely on the outcome of a statistical test on the ratings
(an F-test of panel ratings among the groups of participants). Over
time, we found the statistical test used to evaluate the RVU ratings of
individual panel members became less reliable as the physicians in each
group tended to select a previously discussed value, rather than
developing a unique value, thereby reducing the observed variability
needed to conduct a robust statistical test. In addition, reliance on
values developed using the F-test also occasionally resulted in rank
order anomalies among services (that is, a more complex procedure is
assigned lower RVUs than a less complex procedure). As a result, we
eliminated the use of the statistical F-test and instead indicated that
we would use the median work value of the individual panel members'
ratings. We said that this approach would simplify the refinement
process administratively, while providing a result that reflects the
summary opinion of the panel members based on a commonly used measure
of central tendency that is not significantly affected by outlier
values. At the same time, we clarified that we have the final authority
to set the RVUs, including making adjustments to the work RVUs
resulting from the refinement process, and that we will make such
adjustments if warranted by policy concerns (75 FR 73307).
As we continue to strive to make the refinement panel process as
effective an efficient as possible, we would like to remind readers
that the refinement panels are not intended to review every code for
which we did not propose to accept the AMA RUC-recommended RVUs. Rather
the refinement panels are designed for situations where there is new
information available that might provide a reason for a change in work
values and for which a multi-specialty panel of physicians might
provide input that would assist us in making work RVU decisions. To
facilitate the selection of services for the refinement panels, we
would like to remind specialty societies seeking reconsideration of
proposed or interim final work RVUs, including consideration by a
refinement panel, to specifically state they are requesting refinement
panel review in their public comment letters.
Furthermore we have asked commenters requesting refinement panel
review to submit sufficient new information concerning the clinical
aspects of the work assigned for a service to indicate that referral to
the refinement panel is warranted (57 FR 55917). We note that the
majority of the information presented during the CY 2012 refinement
panel discussions was duplicative of the information provided to the
AMA RUC during its development of recommendations. As detailed in
section III.B. of this final rule with comment period, we consider
information and recommendations from the AMA RUC when assigning
proposed and interim final RVUs to services. Thus, if the only
information that a commenter has to present is information already
considered by the AMA RUC, referral to a refinement panel is not
appropriate. To facilitate selection of codes for refinement, we
request that commenters seeking refinement panel review of work RVUs
submit supporting information that has not already been considered the
AMA RUC in creating recommended work RVUs or by CMS in assigning
proposed and interim final work RVUs. We can make best use of our
resources as well as those of the specialties involved and physician
volunteers, by avoiding duplicative consideration of information by the
AMA RUC, CMS, and a refinement panel. To achieve this goal, CMS will
continue to critically evaluate the need to refer codes to refinement
panels in future years, specifically considering any new information
provided by commenters.
(2) Interim Final Work RVUs Referred to the Refinement Panel in CY 2012
We referred to the CY 2012 refinement panel 17 CPT codes with
interim final work values for which we

[[Page 69015]]

received a request for refinement that met the process described above.
For these 17 CPT codes, all commenters requested increased work RVUs.
For ease of discussion, we will be referring to these services as
``refinement codes.'' Consistent with the process described above, we
convened a multi-specialty panel of physicians to assist us in the
review of the comments. The panel was moderated by our physician
advisors, and consisted of the following voting members:
One to two clinicians representing the commenting
organization;
One to two primary care clinicians nominated by the
American Academy of Family Physicians and the American College of
Physicians;
Four contractor medical directors (CMDs); and
One to two clinicians with practices in related
specialties who were expected to have knowledge of the services under
review.
The panel process was designed to capture each participant's
independent judgment and his or her clinical experience which informed
and drove the discussion of the refinement code during the refinement
panel proceedings. Following the discussion, each voting participant
rated the physician work of the refinement code and submitted those
ratings to CMS individually and confidentially, with no attempt to
achieve consensus among the panel members. As finalized in the CY 2011
PFS final rule with comment period (75 FR 73307), we reviewed the
ratings from each panel member and determined the median value for each
service that was reviewed by the refinement panel.
We note that the individual codes reviewed by the CY 2012
refinement panel, and their final work RVUs are discussed in section
III.B.1.b. of this final rule with comment period. Also, see Table 29
for the refinement panel ratings and the final work RVUs for the codes
reviewed by the CY 2012 refinement panel.

Table 29--Codes Reviewed Under the CY 2012 Refinement Panel Process
----------------------------------------------------------------------------------------------------------------
2012
CY 2012 AMA RUC/HCPAC refinement CY 2013 final
CPT code Short descriptor interim final recommended median panel WRVU
WRVU work RVU rating
----------------------------------------------------------------------------------------------------------------
26341.............. Manipulat palm cord post 0.91 1.66 1.30 0.91
inj.
29581.............. Apply multlay comprs lwr 0.25 0.60 0.50 \3\ 0.25
leg.
32096.............. Open wedge/bx lung infiltr. 13.75 17.00 17.00 13.75
32097.............. Open wedge/bx lung nodule.. 13.75 17.00 17.00 13.75
32098.............. Open biopsy of lung pleura. 12.91 14.99 14.99 12.91
32100.............. Exploration of chest....... 13.75 17.00 17.00 13.75
32505.............. Wedge resect of lung 15.75 18.79 18.79 15.75
initial.
38230.............. Bone marrow harvest allogen 3.09 4.00 4.00 3.50
38232.............. Bone marrow harvest autolog 3.09 3.50 3.50 3.50
62370.............. Anl sp inf pmp/mdreprg&fil. 0.90 1.10 1.10 0.90
92587.............. Evoked auditory test 0.35 0.45 0.45 0.35
limited.
92588.............. Evoked auditory tst 0.55 0.60 0.60 0.55
complete.
94060.............. Evaluation of wheezing..... 0.26 0.31 0.27 0.27
94726.............. Pulm funct tst 0.26 0.31 0.26 0.26
plethysmograp.
94727.............. Pulm function test by gas.. 0.26 0.31 0.26 0.26
94728.............. Pulm funct test 0.26 0.31 0.26 0.26
oscillometry.
94729.............. C02/membane diffuse 0.17 0.19 0.19 0.19
capacity.
----------------------------------------------------------------------------------------------------------------

ii. Code-Specific Issues
---------------------------------------------------------------------------

\3\ This value is interim for CY 2013.
---------------------------------------------------------------------------

In this section, we discuss all code families for which we received
a comment on an interim final physician work value in CY 2012 PFS final
rule with comment period or on a proposed value in the CY 2013 PFS
proposed rule. Refer to Addendum B for a comprehensive list of all
final values.
(1) Integumentary System: Skin, Subcutaneous, and Accessory Structures
(CPT Code 11056)
For discussion on CY 2013 interim final work values for CPT code
11056 refer to section III.M.3. of this final rule with comment period.
(2) Integumentary System: Nails (CPT Code 11719)
For discussion on CY 2013 interim final work values for CPT code
11719 refer to section III.M.3. of this final rule with comment period.
(3) Integumentary System: Repair (Closure) (CPT Codes 12035-12057)
For discussion on CY 2013 interim final work values for CPT codes
12035 through12057 refer to section III.M.3. of this final rule with
comment period.
(4) Integumentary System: Repair (Closure) (CPT Codes 15272 and 15276)
As detailed in the CY 2012 final rule with comment period (76 FR
73112), for CY 2012, the CPT Editorial Panel deleted 24 skin substitute
codes and established a 2-tier structure with 8 new codes (CPT codes
15271 through 15278) to report the application of skin substitute
grafts, which are distinguished according to the anatomic location and
surface area rather than by product description.
We assigned a work RVU of 0.33 to CPT code 15272 (Application of
skin substitute graft to trunk, arms, legs, total wound surface area up
to 100 sq cm; each additional 25 sq cm wound surface area, or part
thereof (List separately in addition to code for primary procedure)) on
an interim final basis for CY 2012. After clinical review of CPT code
15272, we believed that a work RVU of 0.33 accurately reflected the
work associated with this service. The AMA RUC reviewed the survey
results for CPT code 15272 and recommended the survey 25th percentile
work RVU of 0.59 for this service. However, we believed this value
overstated the work of this procedure when compared to the base CPT
code 15271 (Application of skin substitute graft to trunk, arms, legs,
total wound surface area up to 100 sq cm; first 25 sq cm or less wound
surface area). We believed that CPT code 15272 is similar in intensity
to CPT code 15341 (Tissue cultured allogeneic skin substitute; each
additional 25 sq cm, or part thereof (List separately in addition to
code for primary procedure)), and that the primary factor
distinguishing the work of these two services is the

[[Page 69016]]

intra-service physician time. CPT code 15341 has a work RVU of 0.50, 15
minutes of intra-service time, and an IWPUT of 0.0333. CPT code 15272
has 10 minutes of intra-service time. Ten minutes of intra-service work
at the same intensity as CPT code 15341 is equal to a work RVU of 0.33
(10 minutes x 0.0333 IWPUT). Therefore, we assigned a work RVU of 0.33
to CPT code 15272 on an interim final basis for CY 2012.
Comment: Commenters opposed the CMS-recommended interim final work
RVU of 0.33 assigned to CPT code 15272. Commenters disagreed with our
rationale to crosswalk CPT code 15272 to CPT code 15341 and stated that
CPT code 15003 (Surgical preparation or creation of recipient site by
excision of open wounds, burn eschar, or scar (including subcutaneous
tissues), or incisional release of scar contracture, trunk, arms, legs;
each additional 100 sq. cm, or part thereof, or each additional 1% of
body area of infants and children (List separately in addition to code
for primary procedure), which has a work RVU of 0.80, is a more
suitable comparison code. Commenters noted that although CPT code 15003
requires 15 minutes of intra-service time whereas CPT code 15272
requires 10 minutes, it is a more appropriate comparison for valuation
of the services under this code. Commenters stated that the AMA RUC-
recommended work RVU places this service in the proper rank order with
the base code, CPT code 15271. Furthermore, commenters noted that if
all the AMA RUC recommendations for the family of CPT codes 15271
through15278 were accepted, the result would be financial savings for
Medicare. Therefore, commenters recommended that we accept the AMA RUC-
recommended work RVU of 0.59 for CPT code 15272.
Response: Based on the comments received, we re-reviewed CPT code
15272 and continue to believe that CPT code 15272 is similar in
intensity to CPT code 15341. The primary distinguishing factor between
the two services is that CPT code 15272 has 10 minutes of intra-service
time and CPT code 15341 has 15 minutes. We continue to believe that the
AMA RUC-recommended work RVU overstates the intensity of this procedure
compared to the base procedure CPT code 15271. We maintain that valuing
the 10 minutes of intra-service work at the same intensity as CPT code
15341, which equates to a work RVU of 0.33, is appropriate. We believe
that this resulting work RVU maintains appropriate relativity with the
base code and the entire family of CPT codes (15271 through15278).
Therefore, we are finalizing a work RVU of 0.33 for CPT code 15272.
We assigned a work RVU of 0.50 to CPT code 15276 (Application of
skin substitute graft to face, scalp, eyelids, mouth, neck, ears,
orbits, genitalia, hands, feet, and/or multiple digits, total wound
surface area up to 100 sq cm; each additional 25 sq cm wound surface
area, or part thereof (List separately in addition to code for primary
procedure)) on an interim final basis for CY 2012 based on our clinical
review of the work associated with this service. The AMA RUC reviewed
the survey results for CPT code 15276 and recommended a work RVU of
0.59, which corresponds to the AMA RUC's recommended work RVU for CPT
code 15272. We disagreed with the AMA RUC that these two CPT codes
should be valued the same. We assigned an interim final work RVU of
0.33 to CPT code 15272 but believed that the work associated with CPT
code 15276, which describes work on the face, scalp, eyelids, mouth,
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits, is
more intense than the work associated with CPT code 15272, which
describes work on the trunk, arms, and legs. Accordingly, we noted that
our interim final work RVU for CPT code 15276 accurately captured the
work associated with this service and established the appropriate
relativity between the services. Therefore, we assigned a work RVU of
0.50 to CPT code 15276 on an interim final basis for CY 2012.
Comment: Commenters disagreed with the CMS-recommended interim
final work RVU for CPT code 15276. Commenters suggested that CPT code
15276 is analogous to CPT code 15272, for which the AMA RUC originally
recommended a work RVU of 0.59, both in physician work and time and
recommended that CPT code 15276 should be directly crosswalked to CPT
code 15272. Further, the commenters agreed with the AMA RUC key
reference to CPT code 15003 (Surgical preparation or creation of
recipient site by excision of open wounds, burn eschar, or scar
(including subcutaneous tissues), or incisional release of scar
contracture, trunk, arms, legs; each additional 100 sq. cm, or part
thereof, or each additional 1% of body area of infants and children),
which has a work RVU of 0.80, and stated that CPT code 15276 requires 5
minutes less intra-service time, 10 minutes versus 15 minutes, and
requires less physician work to perform. Commenters recommended that we
value CPT code 15276 based upon the AMA RUC-recommended work RVU of
0.59 for CPT code 15276.
Response: Based on the comments received, we re-evaluated whether
CPT code 15003 was an appropriate comparison code for CPT code 15276.
However, we concluded that the services of CPT code 15276 are more
intense than those of CPT code 15272 accordingly; CPT code 15276 should
be valued to reflect the difference in intensity. We believe a work RVU
of 0.50 establishes the appropriate difference in intensity between
these two services. Additionally, we believe this work RVU value
maintains appropriate relativity with the base code, CPT code 15271,
and maintains relatively within the entire family of CPT codes (15271
through15278). Therefore, we are finalizing a work RVU of 0.50 for CPT
code 15276.
(5) Musculoskeletal: Hand and Fingers (CPT Code 26341)
CPT code 26341 (Manipulation, palmar fascial cord (ie, Dupuytren's
cord), post enzyme injection (eg, collagenase), single cord) was
created by the CPT Editorial Panel along with CPT code 20517 to
describe a technique for treating Dupuytren's contracture by injecting
an enzyme into the Dupuytren's cord for full finger extension and
manipulation, effective January 1, 2012.
As detailed in the CY 2012 final rule with comment period, we
assigned an interim final work RVU of 0.91 to CPT code 26341 (76 FR
73192). After reviewing survey results for CPT code 26341, the AMA RUC
recommended a work RVU of 1.66, which corresponds to the survey 25th
percentile value. After clinical review of CPT code 26341, we believed
the service described by CPT code 26341 is analogous to that of CPT
code 97140 (Manual therapy techniques (eg, mobilization/manipulation,
manual lymphatic drainage, manual traction), 1 or more regions, each 15
minutes), which has a work RVU of 0.43. However, since CPT code 97140
has no post-service visits (global period = XXX), while CPT code 26341
includes 1 CPT code 99212 (level 2 office or outpatient visit) (global
period = 010), we added the work RVU of 0.48 for CPT code 99212, to the
work RVU of 0.43 for CPT code 97140 to obtain the work RVU of 0.91 for
CPT code 26341.
Comment: Commenters disagreed with our decision to crosswalk the
work RVU of CPT code 26341 to that of CPT code 97140, stating that the
codes do not have comparable work because CPT code 97140 is performed
by physical therapists while surgeons perform CPT code 26341.
Commenters also stated that the work associated with CPT code 26341
includes local or regional

[[Page 69017]]

anesthesia and the procedure may result in skin rupture, requiring
physician attention to manipulation. In addition, commenters noted that
the post-procedure neurovascular assessment involved in CPT code 26341
is added physician work that is distinctly different from the manual
therapy techniques furnished in CPT code 97140. Commenters asserted
that the difference in physician work, intensity, and complexity
distinguishes the two codes. Commenters also disagreed with our use of
a reverse building block methodology to value the additional work and
complexity and said that we arbitrarily reduced the value of the
surgeon's work involved. Commenters recommended we instead value the
code based upon the AMA RUC-recommended work RVU of 1.66 for CPT code
26341 and requested refinement panel review of the code.
Response: Based on comments received, we referred CPT code 26341 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 26341 was 1.30. We
believe that the refinement panel median work RVU would create a rank
order anomaly between this code and similar codes. Although CPT code
97140 is typically furnished by a physical therapist, we do not believe
that the difference in the provider specialty typically furnishing the
service results in a difference in intensity of the service. Commenters
stated that the post-procedure assessment involved in CPT code 26341
added physician work that is distinctly different from the manual
therapy techniques furnished in CPT code 97140. We disagree; both
services require an assessment following manipulation appropriate to
the provided service to determine the adequacy and outcome, both
positive and negative, of the intervention and attention to an atypical
response to treatment. We continue to believe that the crosswalk and
reverse building block methodologies that we used in assigning the
interim final work value are appropriate and the resulting work RVU
accurately reflects the work associated with this service. After
consideration of the public comments, refinement panel median, and our
clinical review, we are finalizing a work RVU of 0.91 for CPT code
26341.
(6) Musculoskeletal: Application of Casts and Strapping (CPT Codes
29581-29584)
For discussion on interim final work values for CPT codes 29581,
29582, 29583, and 29584 refer to section III.M.3. of this final rule
with comment period.
(7) Respiratory: Lungs and Pleura (CPT Codes 32096-32100, 32505)
In the CY 2012 final rule with comment period, we assigned an
interim final work RVU of 13.75 for CPT code 32096 (Thoracotomy, with
diagnostic biopsy(ies) of lung infiltrate(s) (eg, wedge, incisional),
unilateral) (76 FR 73193). As we noted, the CPT Editorial Panel
reviewed the lung resection family of codes and deleted eight, revised
five, and created 18 new codes to describe thoracoscopic procedures
effective January 1, 2013. For the wedge resection procedures, the
revisions were based on three tiers; first, the approach, thoracotomy
or thoracoscopy; second, the target to remove nodules or infiltrates;
and lastly the intent, diagnostic or therapeutic (for nodules only, all
infiltrates will be removed for diagnostic purposes).
As we noted in the CY 2012 final rule with comment period, after
clinical review of CPT code 32096, we believed a work RVU of 13.75
accurately reflected the work associated with this service compared to
other related services. The AMA RUC reviewed the survey results,
compared the code to other services, and concluded that the survey 25th
percentile work RVU of 17.00 appropriately accounted for the work and
physician time required to perform this procedure. We determined that
the work associated with CPT code 32096 was similar in terms of
physician time and intensity to CPT code 44300 (Placement, enterostomy
or cecostomy, tube open (eg, for feeding or decompression) (separate
procedure)). Therefore, we assigned the same work RVU to CPT code 32096
as that of CPT code 44300 on an interim final basis for CY 2012.
Comment: Commenters stated that CPT code 44300 is an arbitrary
crosswalk, noting that CPT code 32096 describes an open thoracic
procedure whereas CPT code 44300 is the placement of a feeding tube. A
commenter shared a regression analysis of physician time and physician
work of all thoracic surgery codes, which showed that the interim final
work RVU value falls below the regression line and stated that this
indicated an inappropriate work value. Commenters stated our work
values are lower for equivalent physician time than virtually all our
prior decisions for the specialty. Additionally, commenters noted that
the values result in IWPUT values that are approximately half of those
ordinarily associated with major surgical procedures. Therefore,
commenters stated that the interim final work RVU of 13.75 for CPT code
32096 would result in rank order anomalies with other codes in the
physician fee schedule. Commenters recommended we use the AMA RUC-
recommended work RVU of 17.00 and requested refinement panel review of
the code.
Response: Based on comments received, we referred CPT code 32096 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 32096 was 17.00.
Following the refinement panel, we again conducted a clinical review
and continue to believe a work RVU of 13.75 accurately reflected the
work associated with this service. For CY 2012, the CPT Editorial Panel
deleted CPT code 32095 which had a work RVU of 10.14 and created CPT
codes 32096, 32097, and 32100 to replace CPT code 32095. Upon our
clinical review, we do not believe that there is a significant
difference in intensity between deleted CPT code 32095 and replacement
CPT code 32096. We believe that the appropriate work RVU for CPT code
32096 should be close to a work RVU of 10.14, but should account for
the increase in 15 minutes of total time between deleted CPT code 32095
and new CPT code 32096. We believe that the refinement panel median
work RVU of 17.00 far overstates this difference. Additionally, we
continue to believe that the work associated with 32096 is similar in
terms of physician time and intensity to CPT code 44300. Therefore, we
still believe the work RVU of 13.75 appropriately values this service.
After consideration of the public comments, refinement panel results,
and our clinical review, we are assigning a work RVU of 13.75 as the
final value for CPT code 32096.
As detailed in the CY 2012 final rule with comment period, we
assigned an interim final work RVU of 13.75 for CPT code 32097
(Thoracotomy, with diagnostic biopsy(ies) of lung nodule(s) or mass(es)
(eg, wedge, incisional), unilateral) (76 FR 73194). We noted that after
clinical review of CPT code 32097, we believed a work RVU of 13.75
accurately reflected the work associated with this service compared to
other related services. We also noted that the AMA RUC had reviewed the
specialty society survey results, compared the code to other services,
and recommended the survey 25th percentile work RVU of 17.00. We stated
that we determined that the work associated with CPT code 32097 was
similar to CPT code 32096, to which we assigned a work RVU of 13.75 on
an interim final basis for CY 2012.

[[Page 69018]]

Therefore, we assigned a work RVU of 13.75 for CPT code 32097 on an
interim final basis for CY 2012.
Comment: Commenters stated that CPT code 44300 is an arbitrary
crosswalk for CPT code 32097 because it describes an open thoracic
procedure whereas CPT code 44300 is the placement of a feeding tube.
Commenters shared a regression analysis of physician work and time for
all thoracic surgery codes, which shows that the interim final work RVU
value falls below the regression line and noted that this indicates
inappropriately low work intensity. Commenters stated our interim final
work RVU values are lower for equivalent physician time than virtually
all prior work RVU decisions for this specialty. Commenters noted that
the interim final work RVU values result in IWPUT values that are
approximately half of those ordinarily associated with major surgical
procedures. Commenters added that the interim final work RVU of 13.75
for CPT code 32097 result in rank order anomalies with other codes.
Commenters recommended we instead use the AMA RUC-recommended work RVU
of 17.00 for CPT code 32097 and requested refinement panel review of
the code.
Response: Based on comments received, we referred CPT code 32097 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 32097 was 17.00. CPT
codes 32096, 32097, and 32100 were created to replace CPT code 32095,
which was deleted, effective January 1, 2012. We believe these three
services involve the same amount of physician work and should have the
same work RVU. Thus, the same rationale that we used to value CPT code
32096 applies to CPT code 32097. We continue to believe that the work
associated with CPT code 32097 is similar in terms of physician time
and intensity to CPT code 44300 and thus, still believe the work RVU of
13.75 is appropriate. Additionally, we continue to believe that a work
RVU of 17.00 overstates the increase in work between deleted CPT code
32095 and its replacement CPT codes. After consideration of the public
comments, refinement panel results, and our clinical review, we are
assigning a work RVU of 13.75 as the final value for CPT code 32097.
As detailed in the CY 2012 final rule with comment period, we
assigned an interim final work RVU of 12.91 to CPT code 32098
(Thoracotomy, with biopsy(ies) of pleura) (76 FR 73194). We noted that
after clinical review, we believed a work RVU of 12.91 accurately
reflected the work associated with this service as compared to other
related services. After reviewing survey results and comparing the code
to other services, the AMA RUC recommended the survey 25th percentile
work RVU of 14.99. We noted that the work associated with CPT code
32098 was similar in terms of physician time and intensity to CPT code
47100 (Biopsy of liver, wedge) and therefore we believed that
crosswalking to the work RVU of CPT code 47100 appropriately accounted
for the work associated with CPT code 32098. Therefore, we assigned a
work RVU of 12.91 to CPT code 32098 on an interim final basis for CY
2012.
Comment: Commenters shared a regression analysis of physician time
and physician work of all thoracic surgery codes, and indicated that
our interim final work RVU value falls below the regression line, which
commenters noted indicated inappropriately low work intensity.
Commenters stated that a work RVU of 12.91 results in an IWPUT of
0.0741, which is insufficient intensity compared to other similar
procedures. Commenters stated that our interim final work RVU of 12.91
for CPT code 32098 placed this service out of relativity with the CPT
codes in this family for which we accepted the AMA RUC recommendations
and requested refinement panel review of the code.
Response: Based on comments received, we referred CPT code 32098 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median was a work RVU of 14.99. This service would be
out of rank order with the other services in the family described by
CPT codes 32096, 32097, 32100, and 32505 if we adopted a work RVU of
14.99. As noted above, we continue to believe a work RVU of 13.75 is
appropriate for CPT code 32096. Since CPT code 32098 describes a more
limited procedure that takes less time than the other codes in the
family (CPT codes 32096, 32097, 32100, and 32505) it should have a
lower work RVU. After consideration of the public comments, refinement
panel results, and our clinical review, we believe that that the work
associated with 32098 is similar in terms of physician time and
intensity to CPT code 47100 and therefore we are assigning a work RVU
of 12.91 as the final value for CY 2013 for CPT code 32098.
We assigned a work RVU of 13.75 for CPT code 32100 (Thoracotomy;
with exploration) on an interim final basis in the CY 2012 final rule
with comment period (76 FR 73194). After clinical review of CPT code
32100, we believed a work RVU of 13.75 accurately reflected the work
associated with this service as compared to other related services. The
AMA RUC reviewed the specialty society survey results, compared the
code to other services, and recommended a work RVU of 17.00. We noted
that the affected specialty society and AMA RUC asserted that CPT code
32100 should be valued the same as CPT codes 32096 and 32097 because
they believe that the work is similar for these three services. We
noted that we assigned a work RVU of 13.75 to CPT codes 32096 and
32097, and therefore a work RVU of 13.75 to CPT code 32100 as well.
Comment: Commenters stated that CPT code 44300 is an inappropriate
crosswalk for CPT code 32100 because it describes an open thoracic
procedure whereas CPT code 44300 is the placement of a feeding tube.
Commenters shared a regression analysis of physician work and time all
thoracic surgery codes that shows the interim final work RVU value
falls below the regression line and stated that this indicates
inappropriately low work intensity. Commenters stated the interim final
work RVU value is lower for equivalent physician time than virtually
all prior work RVU assignments for this specialty. Commenters noted
that the interim final work RVU value results in IWPUT values that are
approximately half of those ordinarily associated with major surgical
procedures. Therefore, commenters stated that the interim final work
RVU of 13.75 for CPT code 32100 would result in rank order anomalies
with other codes in the fee schedule. Commenters recommended we value
the work based upon the AMA RUC-recommended work RVU of 17.00 for CPT
code 32100 and requested refinement panel review of the code.
Response: Based on comments received, we referred CPT code 32100 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 32100 was 17.00. CPT
codes 32096, 32097, and 32100 were created to replace CPT code 32095,
which was deleted, effective January 1, 2012. We believe these three
services involve the same amount of physician work and should have the
same work RVU. Thus, the same rationale that we used to value CPT codes
32096 and 32097 applies to CPT code 32100. We continue to believe that
the work associated with 32100 is similar in terms of physician time
and intensity to CPT code 44300. In addition, we agree with the
specialty society and AMA RUC's assertion that CPT code 32100 should be
valued the same as CPT codes 32096 and 32097.

[[Page 69019]]

Furthermore, we continue to believe that a work RVU of 17.00 overstates
the increase in work between deleted CPT code 32095 and its replacement
CPT codes. Thus, we maintain that the interim final work RVU of 13.75
is still appropriate. After consideration of the public comments,
refinement panel results, and our clinical review, we are assigning a
work RVU of 13.75 as the final value for CY 2013 for CPT code 32100.
We assigned a work RVU of 15.75 for CPT code 32505 (Thoracotomy;
with therapeutic wedge resection (eg, mass, nodule), initial) on an
interim final basis in the CY 2012 final rule with comment period (76
FR 73194). We noted that after clinical review of CPT code 32505, we
believed a work RVU of 15.75 accurately reflected the work associated
with this service compared to other related services. After reviewing
the survey results, comparing the code to other services, the AMA RUC
recommended the survey 25th percentile work RVU of 18.79. We explained
that we assigned the interim final work RVU of 15.75 in recognition of
the greater physician work and intensity involved in CPT 32505 as
compared to CPT code 32096. We valued the additional 30 minutes of
intra-service work associated with CPT code 32505 at 2.00 work RVUs.
Accordingly, we assigned a work RVU of 15.75 for CPT code 32505 on an
interim final basis for CY 2012.
Comment: Commenters stated that they entirely disagreed with the
methods used to value CPT code 32096 and therefore, disagreed with the
value assigned to 32505 that was based upon the value assigned to CPT
code 32096. Commenters said that the methods used for valuing CPT code
32505 have never been employed to determine a code's work value.
Further, commenters explained that our value results in an IWPUT of
0.06, which is lower than the AMA RUC recommendation. Commenters
recommended we value CPT code 32505 based upon the AMA RUC-recommended
work RVU of 18.79 for this code and requested refinement panel review.
Response: Based on comments received, we referred CPT code 32505 to
the CY 2012 multi-specialty refinement panel for further review. We
determined that the refinement panel median work RVU of 18.79 was
relatively high in relation to the other codes in the family. We
maintain that the incremental difference between CPT code 32096 and CPT
code 32505 is 2.00 RVUs and, therefore continue to believe that a work
RVU value of 15.75 accurately reflects the value of the service. As a
result of the refinement panel results, the public comments, and our
clinical review, we are assigning a work RVU of 15.75 as the final
value for CPT code 32505.
(8) Respiratory: Lungs and Pleura (CPT Codes 32663, 32668-32673)
For discussion on interim final work values for CPT codes 32663,
32668 through 32673 refer to section III.M.3. of this final rule with
comment period.
(9) Cardiovascular: Heart and Pericardium (CPT Code 36247)
In the Fourth Five-Year Review of Work (76 FR 32445), we discussed
CPT code 36247 (Selective catheter placement, arterial system; initial
third order or more selective abdominal, pelvic, or lower extremity
artery branch, within a vascular family) and proposed a CY 2012 work
RVU of 6.29 and a global period change from 90 days (Major surgery with
a 1-day pre-operative period and a 90-day postoperative period included
in the fee schedule amount) to XXX (the global concept does not apply).
In the CY 2012 PFS final rule with comment period (76 FR 73132), we
agreed with commenters to the Fourth Five-Year Review of Work that our
discussion of the global period was incorrect and should have indicated
a change in global period from XXX to 000 (Minor procedure-includes
RVUs for pre- and post-operative procedures on the same day). We stated
that, based on comments received, we referred CPT code 36247 to the CY
2011 multi-speciality refinement panel for further review. The
refinement panel median value was a work RVU of 7.00, the AMA RUC-
recommended value. We went on to state that upon clinical review, we
believed that our proposed work RVU of 6.29 was more appropriate. We
stated that we observed a significant decrease in the physician times
reported for this service that argue for a lower work RVU,
notwithstanding that the survey was conducted for a 0-day global
period, which includes an E/M service on the same day. Therefore, we
assigned work RVUs of 6.29 and a global period of 000 to CPT code 36247
on an interim basis for CY 2012 and invited additional public comment
on this code in the CY 2012 final rule with comment period.
Comment: A commenter appreciated that we acknowledged that we made
an inadvertent error when we referred to the original global period of
the code as 90 global days rather than XXX global days. However, this
commenter stated that the new 0-day global period, which includes an E/
M service on the same day, justified the refinement panel's median
value of a work RVU of 7.00. Additionally, commenters stated that the
change from a global period of XXX (global concept does not apply) to a
global period of 000 (Minor procedure-includes RVUs for pre- and post-
operative procedures on the same day) added additional pre-service
work. Other commenters stated that with the removal of the lower
extremity intervention patients from the code, the procedures now coded
with this procedure are more complex and warrant an increased value.
Commenters also pointed out that the CY 2011 refinement panel median
for the code was 7.00 work RVUs. Commenters requested that we accept
the AMA RUC recommendation of 7.00 work RVUs for CPT code 36247.
Response: Based on comments received, we re-reviewed CPT code
36247. We continue to believe that our proposed work RVU of 6.29
accurately reflects the work associated with this service. Based on the
significant reduction in the physician intra-service time assigned to
this service from 86 minutes to 60 minutes, if this CPT code had
maintained a global period of XXX, we believe it would have been
appropriate to reduce the work RVU below the current value of 6.29 to
reflect the reduction in time. We do not believe that the potential
increase in intensity due to the complexity of the patient mix counter
balances the decrease in intra-service time. We understand that this
service now includes the work of a same day E/M visit, and we believe
this additional work is accounted for by maintaining the current work
RVU of 6.29 rather than reducing the work RVU, as would have been
appropriate if the service had maintained global period of XXX.
Therefore, we are finalizing a work RVU of 6.29 and a 000 global period
for CPT code 36247.
(10) Renal Angiography Codes (CPT Code 36251)
As detailed in the CY 2012 final rule with comment period (76 FR
73196), the CPT Editorial Panel created four bundled renal angiography
services (CPT codes 36251, 36252, 36253, and 36254), effective January
1, 2012.
We assigned a work RVU of 5.35 to CPT code 36251 (Selective
catheter placement (first-order), main renal artery and any accessory
renal artery(s) for renal angiography, including arterial puncture and
catheter placement(s), fluoroscopy, contrast injection(s), image
postprocessing, permanent recording of images, and radiologic
supervision and interpretation, including pressure gradient
measurements when performed, and flush aortogram when performed;
unilateral) on an interim final basis for CY 2012 based upon our

[[Page 69020]]

clinical review of the code. The AMA RUC reviewed the survey results,
compared the code to other services, and concluded that the work value
for CPT code 36251 should be directly crosswalked to CPT code 31267
(Nasal/sinus endoscopy, surgical, with maxillary antrostomy; with
removal of tissue from maxillary sinus) endoscopy, surgical, with
maxillary antrostomy; with removal of tissue from maxillary sinus),
which has a work RVU of 5.45, and recommended a work RVU of 5.45 for
CPT code 36251. We determined that the work associated with CPT code
36251 is closely aligned in terms of physician time and intensity with
that of CPT code 52341 (Cystourethroscopy; with treatment of ureteral
stricture (eg, balloon dilation, laser, electrocautery, and incision),
which has a work RVU of 5.35. We believed crosswalking to the work RVU
of CPT code 52341 appropriately accounted for the work associated with
CPT code 36251. Therefore, we assigned a work RVU of 5.35 to CPT code
36251 on an interim final basis for CY 2012.
Comment: Commenters disagreed with the interim final work RVU of
5.35 for CPT code 36251, stating that the family of CPT codes (36251,
36252, 36253, and 36254) was carefully reviewed by the AMA RUC and the
rank order was appropriately established by the AMA RUC
recommendations. Commenters recommended CPT code 36251 should be
directly crosswalked to CPT code 31267 as the AMA had recommended and
requested that we use 5.45 work RVUs for CPT code 36251.
Response: Based on the comments received, we re-reviewed CPT code
36251 and considered the commenters' recommendation that it be directly
crosswalked to CPT code 31267. After re-considering the crosswalk, we
continue to believe that the work associated with CPT code 36251 is
closely aligned in terms of physician time and intensity with CPT code
52341 and that crosswalking to CPT code 52341 appropriately results in
a work RVU of 5.35. Therefore, we are finalizing a work RVU of 5.35 for
CPT code 36251 for CY 2013.
We assigned an interim final work RVU of 6.99 to CPT code 36252
(Selective catheter placement (first-order), main renal artery and any
accessory renal artery(s) for renal angiography, including arterial
puncture and catheter placement(s), fluoroscopy, contrast injection(s),
image postprocessing, permanent recording of images, and radiologic
supervision and interpretation, including pressure gradient
measurements when performed, and flush aortogram when performed;
bilateral), for CY 2012 after clinical review. The AMA RUC reviewed the
survey results, compared the code to other services, and concluded that
the work value for CPT code 36252 should be directly crosswalked to CPT
code 43272 (Endoscopic retrograde cholangiopancreatography (ERCP); with
ablation of tumor(s), polyp(s), or other lesion(s) not amenable to
removal by hot biopsy forceps, bipolar cautery or snare technique),
which has a work RVU of 7.38. Although the AMA RUC recommended a work
RVU of 7.38 for CPT code 36252, we found that the intensity of this
service is more similar to CPT code 58560 (Hysteroscopy, surgical; with
division or resection of intrauterine septum (any method)), which has a
work RVU of 6.99. Accordingly, we assigned an interim final work RVU of
6.99 to CPT code 36252 for CY 2012.
Comment: Commenters stated that this family of CPT codes 36251,
36252, 36253, and 36254 were carefully reviewed by the AMA RUC, that
the rank order was appropriately established based on the AMA RUC
recommendations, and that CPT code 36252 should be crosswalked to CPT
code 43272 (Endoscopic retrograde cholangiopancreatography (ERCP); with
ablation of tumor(s), polyp(s), or other lesion(s) not amenable to
removal by hot biopsy forceps, bipolar cautery or snare technique),
which has a work RVU of 7.38, as the AMA recommended.
Response: Based on the comments received, we re-reviewed CPT code
36252. Although commenters recommended a direct crosswalk to CPT code
43272, we continue to believe that the work of the services is similar
to the reference CPT code 58560. Accordingly, we find that the
resulting work RVUs of 6.99 is still appropriate and accounts for the
work associated with this service and we are finalizing a work RVU
value of 6.99 for CPT code 36252.
(11) IVC Transcatheter Procedures (CPT Codes 37192 and 37193)
As discussed in the CY 2012 final rule with comment period (76 FR
73197), for CPT code 37192 (Repositioning of intravascular vena cava
filter, endovascular approach inclusive of vascular access, vessel
selection, and all radiological supervision and interpretation,
intraprocedural roadmapping, and imaging guidance (ultrasound and
fluoroscopy)), we assigned a work RVU of 7.35 to CPT code 37192, with a
refinement to 45 minutes of intra-service time, on an interim final
basis for CY 2012.
After clinical review of CPT code 37192, we believed a work RVU of
7.35 accurately reflected the work associated with this service. The
AMA RUC reviewed the survey results, compared the code to other
services, and concluded that the survey 75th percentile intra-service
time of 60 minutes and the 25th percentile of work RVU of 8.00
accurately described the physician work involved in the service. We
determined that the work associated with CPT code 37192 is similar to
CPT code 93460 (Catheter placement in coronary artery(s) for coronary
angiography, including intraprocedural injection(s) for coronary
angiography, imaging supervision and interpretation; with right and
left heart catheterization including intraprocedural injection(s) for
left ventriculography, when performed), which has a work RVU of 7.35,
48 minutes pre-service time, 50 minutes intra-service time, and 30
minutes post-service time. By comparing the times assigned to those of
CPT code 93460, we determined that the survey median intra-service time
of 45 minutes appropriately accounted for the time required to furnish
the intra-service work of CPT code 37192. Therefore, we assigned it a
work RVU of 7.35, with a refinement to 45 minutes of intra-service time
on an interim final basis for CY 2012. A complete listing of the times
associated with this code is available on the CMS Web site at:
www.cms.gov/PhysicianFeeSched/.
Comment: A commenter disagreed with our valuation for CPT code
37192, but did not provide information as to why the valuation was
inappropriate. The commenter urged that we accept the AMA RUC-
recommended work RVU and times.
Response: After clinical re-review of CPT code 37192, we maintain
that the work associated with CPT code 37192 is similar to CPT code
93460, which has the following times: 48 minutes pre-service, 50
minutes intra-service, and 30 minutes post-service. As a result, we
continue to believe that the survey median intra-service time of 45
minutes appropriately accounts for the time involved in furnishing the
intra-service work of this procedure. We believe that the crosswalk
work RVU of 7.35 more appropriately values the services furnished in
this code than the AMA RUC recommended value of 8.00 RVUs. We are
finalizing a work RVU of 7.35 to CPT code 37192, with a refinement to
45 minutes of intra-service time. A complete listing of the times
associated with this code is available on the CMS Web site at
www.cms.gov/PhysicianFeeSched/.

[[Page 69021]]

As discussed in the CY 2012 final rule with comment period (76 FR
73197), for CPT code 37193 (Retrieval (removal) of intravascular vena
cava filter, endovascular approach inclusive of vascular access, vessel
selection, and all radiological supervision and interpretation,
intraprocedural roadmapping, and imaging guidance (ultrasound and
fluoroscopy)), we assigned a work RVU of 7.35 to CPT code 37193, with a
refinement to 45 minutes of intra-service time, on an interim final
basis for CY 2012. After clinical review of CPT code 37193, we believed
a work RVU of 7.35 accurately reflected the work associated with this
service. The AMA RUC reviewed the survey results, compared the code to
other services, and concluded that the survey 75th percentile intra-
service time of 60 minutes and the 25th percentile of work RVU of 8.00
accurately described the physician work involved in the service. We
believed that the work associated with CPT code 37193 is similar to CPT
code 93460 (Catheter placement in coronary artery(s) for coronary
angiography, including intraprocedural injection(s) for coronary
angiography, imaging supervision and interpretation; with right and
left heart catheterization including intraprocedural injection(s) for
left ventriculography, when performed), which has a work RVU of 7.35,
48 minutes pre-service time, 50 minutes intra-service time, and 30
minutes post-service time. Based upon these times, we believed that the
survey median intra-service time of 45 minutes appropriately accounted
for the time required to furnish the intra-service work associated with
CPT code 37193. Therefore, we assigned a work RVU of 7.35 to CPT code
37193, with a refinement to 45 minutes of intra-service time, on an
interim final basis for CY 2012. A complete listing of the times
associated with this code is available on the CMS Web site at:
www.cms.gov/PhysicianFeeSched/.
Comment: Without providing more information, a commenter disagreed
with the work RVUs assigned and refinement to time for CPT code 37193
and urged that we accept the AMA RUC-recommended work RVU of 8.00, and
recommended time.
Response: After clinical re-review of CPT code 37193, we maintain
that the work associated with CPT code 37193 is similar to CPT code
93460, which has the following times: 48 minutes pre-service, 50
minutes intra-service, and 30 minutes post-service. We continue to
believe that the survey median intra-service time of 45 minutes
appropriately accounted for the time required to furnish the intra-
service work of this CPT code 37193 rather than the AMA RUC-recommended
intra-service time of 60 minutes. We also continue to believe that the
work RVU of 7.35 more appropriately values the services furnished in
this code than the AMA-recommended work RVU of 8.00. Therefore, we are
finalizing a work RVU of 7.35 to CPT code 37132, with a refinement to
45 minutes of intra-service time. A complete listing of the times
associated with this code is available on the CMS Web site at:
www.cms.gov/PhysicianFeeSched/.
(12) Hemic and Lymphatic Systems: General, Bone Marrow or Stem Cell
Services/Procedures (CPT Codes 38230 and 38232)
On an interim final basis, we assigned a work RVU of 3.09 to CPT
codes 38230 (Bone marrow harvesting for transplantation; allogeneic)
and 38232 (Bone marrow harvesting for transplantation; autologous) for
CY 2012 (76 FR 73197). In the CY 2012 final rule with comment period we
noted that for CY 2012, the CPT Editorial Panel split CPT code 38230
into two separate CPT codes: 38230 and 38232 to more accurately reflect
current medical practice. We noted that we changed the global period
from 010 to 000 for CPT code 38230, and assigned a global period of 000
to CPT code 38232, as these services rarely required overnight
hospitalization and physician follow-up in the days following the
procedure.
We noted that after clinical review of CPT codes 38230 and 38232,
we believed that a work RVU of 3.09 appropriately accounted for the
work associated with these services. The AMA RUC reviewed the survey
results and, after comparison to similar CPT codes, the AMA RUC
recommended the survey median work RVU of 4.00 for CPT code 38230, and
the survey median work RVU of 3.50 for CPT code 38232. Notwithstanding
the AMA-RUC recommendation, we noted that the work for these services
is very similar and should be valued the same. In CY 2011, CPT code
38230 had a work RVU of 4.85 with a ten-day global period that included
a CPT code 99213 (Level 3 office or outpatient visit, established
patient), and a CPT code 99238 (discharge day management service). We
explained that we considered converting the value of CPT code 38230
from a 10-day global period to a 0-day global period by subtracting the
work RVUs for CPT code 99213 (work RVU=0.97) and CPT code 99238 (work
RVU=1.28), but believed that the resulting work RVU of 2.60 would
result in this code being valued too low compared to other similar
services. Instead, we found that the CPT code 38230 survey 25th
percentile work RVU of 3.09 accurately captured the intensity of this
service with the revised global period. Therefore, we assigned a work
RVU of 3.09 to CPT code 38230 on an interim final basis for CY 2012.
Since, as explained above, we believed that CPT code 38232 should have
the same work RVU as CPT code 38230, we also assigned a work RVU of
3.09 to CPT code 38230 on an interim final basis for CY 2012.
Comment: Commenters acknowledged that the intra-service times of
CPT codes 38230 and 38232 are similar; however, they stated that the
service described by CPT code 38230 is typically more intense and
stressful since it is being performed on a donor, who does not directly
benefit from the procedure. Commenters also noted that collecting donor
cells is typically prolonged to ensure that enough cells have been
collected. Commenters stated that although the survey did not reflect
the intra-service time for CPT code 38230, the AMA RUC-recommended
values appropriately accounted for the lower time reported in the
survey with a higher work RVU value. Additionally, commenters stated
that the reverse building block methodology was an inappropriate policy
to apply to any services with changing global day periods and in this
case, particularly inappropriate because the post-operative visits
built into the code were initially valued by the Harvard study several
years ago. Given these arguments, commenters requested the AMA RUC
recommended work RVUs of 4.00 for CPT code 38230 and 3.50 for CPT code
38232 be used to value these codes and requested refinement panel
review of these codes.
Response: Based on comments received, we referred CPT codes 38230
and 32832 to the CY 2012 multi-specialty refinement panel for further
review. The refinement panel median work RVU for CPT code 38230 was
4.00, and the median work RVU for CPT code 38232 was 3.50. We continue
to believe that CPT codes 38232 and 38230 require the same amount of
physician work and should be valued the same. After reviewing the
public comments and the refinement panel ratings, we agree that the
refinement panel median work RVU of 3.50 for CPT code 38232 more
appropriately reflects the work of CPT codes 38230 and 38232 than the
interim final work RVU of 3.09. We believe the refinement panel median
work RVU of 4.00 for CPT code 38230 overstates the work associated with
these services, especially considering that for CPT code

[[Page 69022]]

38230 the survey 25th percentile work RVU was 3.09 and a building block
methodology based on the CY 2011 work RVU and global period yielded
work RVU of 2.60 for this service. As a result of the refinement panel
ratings, the public comments, and our clinical review, we are
finalizing a work RVU of 3.50 for CPT codes 32830 and 32832.
(13) Digestive: Abdomen, Peritoneum, and Omentum (CPT Code 49084)
As detailed in the CY 2012 final rule with comment period (76 FR
73198), the CPT Editorial Panel deleted CPT codes 49080 and 49081and
created three new CPT codes, 49082, 49083, and 49084, effective January
1, 2012, to more accurately describe the current medical practice.
After clinical review, we assigned a work RVU of 2.00 to CPT codes
49083 (Abdominal paracentesis (diagnostic or therapeutic); with imaging
guidance) and 49084 (Peritoneal lavage, including imaging guidance,
when performed) on an interim final basis for CY 2012. The AMA RUC
recommended a work RVU of 2.00 for CPT code 49083 and a work RVU of
2.50 for CPT code 49084. We agreed with the AMA RUC-recommended work
RVU of 2.00 for CPT code 49083, but disagreed that CPT 49084 should be
valued more. Instead, we believed that CPT code 49084 requires similar
work to code 49083 and should be valued the same. Therefore, we
assigned a work RVU of 2.00 to CPT codes 49083 and 49084 on an interim
final basis for CY 2012.
Comment: One commenter disagreed with our valuation of CPT code
49084 and the resulting work RVU recommendation but did not describe
why.
Response: After clinical re-review of CPT code 49084, we continue
to believe that CPT code 49084 requires similar work as CPT code 49083
and should be valued the same. Accordingly, we are finalizing a work
RVU of 2.00 for CPT codes 49083 and 49084.
(14) Nervous: Spine and Spinal Cord (CPT Codes 62370)
CPT code 62370 (Electronic analysis of programmable, implanted pump
for intrathecal or epidural drug infusion (includes evaluation of
reservoir status, alarm status, drug prescription status)); with
reprogramming and refill (requiring physician's skill)) newly created
by the CPT Editorial Panel for CY 2012, was assigned an interim final
work RVU of 0.90 for CY 2012 as discussed in the CY 2012 final rule
with comment period (76 FR 73199).
As we noted in the CY 2012 final rule with comment period, after
clinical review of CPT code 62370, we believed that a work RVU of 0.90
accurately accounted for the work associated with this service. We
noted that after a comparison to similar services, the AMA RUC
recommended a work RVU of 1.10 for CPT code 62370 based on a crosswalk
to CPT code 56605 (Biopsy of vulva or perineum (separate procedure); 1
lesion) however, we believed that a work RVU of 1.10 for CPT code 62370
was too high compared to similar services in this family. Instead, we
found CPT code 62370 to be similar in intensity and complexity to CPT
code 93281 (Programming device evaluation (in person) with iterative
adjustment of the implantable device to test the function of the device
and select optimal permanent programmed values with physician analysis,
review and report; multiple lead pacemaker system), which has a work
RVU of 0.90. We noted that this value, which is between the specialty
society survey 25th percentile and median work RVU, appropriately
reflected the work of CPT code 62370. Therefore, we assigned a work RVU
of 0.90 to CPT code 62370 on an interim final basis for CY 2012.
Comment: Commenters disagreed with the value, explaining that CPT
code 93281 was not an appropriate crosswalk because it was a
programming only code while CPT code 62370, is a procedure and
programming code. Commenters noted that the interim final work RVU of
0.90 does not account for the work in refilling the pump, which
requires a sterile puncture in a patient whose complexities preclude
provision of these services by a nonphysician. Therefore, commenters
requested that CPT code 62370 be valued based upon the AMA RUC
recommended value of 1.10 work RVUs and requested refinement panel
review of this code.
Response: Based on comments received, we referred CPT code 62370 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 62370 was 1.10. In
subsequent review, we determined that valuing this code at the
refinement panel median work RVU value would result in too high a value
as compared to the other codes in the family. CPT code 62369
(Electronic analysis of programmable, implanted pump for intrathecal or
epidural drug infusion (includes evaluation of reservoir status, alarm
status, drug prescription status); with reprogramming and refill) has a
work RVU of 0.67. CPT code 62369 describes the same procedure as CPT
code 62370, except in CPT code 62369 the reprogramming and refill does
not require physician skill and in CPT code 62370 the reprogramming and
refill does require physician skill. We believe a work RVU of 0.90 for
CPT code 62370 reflects the appropriate incremental increase in
physician work for reprogramming and refill by a physician, versus a
nonphysician. We also continue to believe that CPT code 93281, which
was recently reviewed, has similar intensity and complexity to CPT code
62370, and that CPT codes 93281 and 62370 include the same amount of
intra-service physician time. We believe that CPT codes 93281 and 62370
involve the same amount of physician work and maintain that a work RVU
of 0.90 appropriately captures the physician work of these procedures.
After reviewing the public comments, the refinement panel ratings, and
our clinical review, we are finalizing a work RVU of 0.90 as for CPT
code 62370.
(15) Diagnostic Radiology: Abdomen (CPT Codes 74174)
For discussion on CY 2013 interim final work values for CPT code
74174 refer to section III.M.3. of this final rule with comment period.
(16) Pathology and Laboratory: Urinalysis (CPT Codes 88120 and 88121)
For discussion on CY 2013 interim work values for CPT codes 88120-
88121, refer to section III.M.3. of this final rule with comment
period.
(17) Psychiatry: Psychiatric Therapeutic Procedures (CPT Codes 90845
and 90869)
For discussion on interim work values for CPT codes 90845 and
90869, refer to section III.M.3. of this final rule with comment
period.
(18) Ophthalmology: Special Ophthalmological Services (CPT Codes 92071)
As detailed in the CY 2012 final rule with comment period (76 FR
73202), for the Fourth Five-Year Review, we identified CPT code 92070
through the Harvard-Valued--Utilization over 30,000 screen as a
potentially misvalued code. Upon review of this service, the CPT
Editorial Panel deleted CPT code 92070 and created two new CPT codes
(92071 and 92072) to distinguish reporting of fitting of contact lens
for treatment of ocular surface disease and fitting of contact lens for
management of keratoconus.
We assigned an interim final work RVU of 0.61, with refinement to
time as noted above to CPT code 92071 (Fitting of contact lens for
treatment of ocular surface disease) for CY 2012. We

[[Page 69023]]

determined that CPT code 92071 is expected to capture the utilization
of the deleted code CPT code 92070 (Fitting of contact lens for
treatment of disease, including supply of lens). Since CPT code 92070
was typically billed with an E/M service on the same day, we believed
that CPT code 92071 would also typically be billed with an E/M service
on the same day. We concluded that some of the activities conducted
during the pre- and post-service times of the procedure code and the E/
M visit overlapped and, therefore, should not be counted twice in
developing the procedure's work value. To account for this overlap, we
reduced the pre-service evaluation time and post-service time by one-
third each. Specifically, we reduced each the pre-service evaluation
time and the post-service time from 5 minutes to 3 minutes. To
determine the appropriate work RVU for CPT code 92071, we calculated
the value of the extracted time and subtracted it from the AMA RUC-
recommended work RVU of 0.70, which equals the CY 2011 work RVU for the
deleted code, CPT 92070. In valuing CPT code 92071, we removed a total
of 4 minutes (as described above) at an intensity of 0.0224 per minute,
which amounted to the removal of 0.09 work RVUs. Therefore, we assigned
an interim final work RVU of 0.61, with refinement to time as noted
above to CPT code 92071 for CY 2012. A complete listing of the times
associated with this code is available on the CMS Web site at:
www.cms.gov/PhysicianFeeSched/.
Comment: Commenters disagreed with the rationale used to lower the
value for CPT code 92071 and further disagreed with the reverse
building block methodology used. Commenters stated that the AMA RUC and
the affected specialty society had reviewed and valued CPT code 92071
with the assumption that an E/M service would be billed in conjunction
with the service and cited the AMA summary of recommendations as
evidence. Therefore, none of the pre- and post-time allocated to this
code overlapped with the E/M service. They pointed out that the AMA
RUC-recommended work RVU of 0.70 was lower than the survey median work
RVU of 1.11. Commenters preferred the AMA RUC comparison of CPT code
92071 to CPT code 65205 (Removal of foreign body, external eye;
conjunctival superficial) with a work RVU of 0.71 and noted that both
services have identical physician time components and should be valued
similarly. Therefore, commenters requested the AMA RUC recommended work
RVU of 0.70 and the AMA RUC recommended pre-service and immediate post-
service physician time of 5 minutes, each.
Response: After clinical re-review, we continue to believe that the
reverse building block methodology is an appropriate way to value the
services described by CPT code 92071. We maintain that some of the
activities conducted during the pre- and post-service times of the
procedure code and the E/M visit overlap and, therefore, should not be
counted twice in developing the procedure's work value. To account for
the overlap in work between CPT code 92071 and the same day E/M
service, the AMA RUC removed 2 minutes pre-service time from the pre-
service package time of 7 minutes. We believe that the pre-service
package overstates the time involved in this procedure and that a more
appropriate starting point for the same day E/M reduction for this
procedure is the survey median pre-service time. We believe that
removing 2 minutes of pre-service time from the survey median pre-
service time of 5 minutes, as well as 2 minutes from the post-service
time of 5 minutes better reflects the time involved in furnishing the
work of this procedure alongside an E/M service. We continue to believe
that a work RVU of 0.61 accurately reflects the work of the service
relative to similar services. Therefore, we are finalizing a refinement
to time and a work RVU of 0.61 for CPT code 92071. The times assigned
to this CPT code are available on the CMS Web site at: www.cms.gov/PhysicianFeeSched/.
(19) Special Otorhinolaryngologic Services: Audiologic Function Tests
(CPT Codes 92587 and 92588)
On an interim final basis for CY 2012, we assigned a work RVU of
0.35 to CPT code 92587 (Distortion product evoked otoacoustic
emissions; limited evaluation (to confirm the presence or absence of
hearing disorder, 3-6 frequencies) or transient evoked otoacoustic
emissions, with interpretation and report) as detailed in the CY 2012
final rule with comment period (76 FR 73202). We identified CPT code
92587 as a potentially misvalued code through the Fastest Growing
screen. The specialty society surveyed this service to create a new
recommendation for CY 2011. However, after reviewing the survey data,
it concluded that more than one service is represented by this code and
requested the service be referred back to the CPT Editorial Panel for
further clarification. As a result, the CPT Editorial Panel created CPT
code 92558 (Distortion product evoked otoacoustic emissions;
comprehensive diagnostic evaluation (quantitative analysis of outer
hair cell function by cochlear mapping, minimum of 12 frequencies),
with interpretation and report) to describe evoked otoacoustic
emissions screening, and revised CPT codes 92587 and 92588 clarify the
otoaucoustic emissions evaluations, effective January 1, 2012. After
clinical review of CPT code 92587, we believed that the survey 25th
percentile work RVU of 0.35 accurately described the work associated
with this service. The HCPAC reviewed the survey results, and after a
comparison to similar CPT codes, recommended a work RVU of 0.45 for CPT
code 92587, which was between the survey 25th percentile and median
values. We believed that CPT code 92587 was similar in time and
intensity to CPT code 97124 (Therapeutic procedure, 1 or more areas,
each 15 minutes; massage, including effleurage, petrissage and/or
tapotement (stroking, compression, percussion)), which has a work RVU
of 0.35, and that the survey 25th percentile value appropriately
reflected the relativity of this service. Therefore, we assigned a work
RVU of 0.35 to CPT code 92587 on an interim final basis for CY 2012.
Comment: Commenters disagreed with the interim final work RVU of
0.35 and urged CMS to use the HCPAC recommendation of 0.45 since it is
between the survey 25th percentile and median values. Commenters stated
that although 25th percentile might be reasonable in situations where
the accuracy of the survey data is in doubt, in this case the overall
distribution of the data, the size of the sample, and response rate
made the median a better guide. Commenters noted the importance of
cross specialty comparisons, but stated that a crosswalk to CPT code
97124 was not appropriate. Commenters stated that CPT code 92587 is a
cognitive diagnostic service that requires the audiologist to review
and interpret data resulting from numerous tonal pair samples
administered to a patient's inner ear whereas CPT code 97124 is a
therapeutic service involving hands-on manipulation of tissue and
muscles. As a result, a more appropriate comparison code listed within
the physical therapy section is the cognitive diagnostic work required
to perform CPT code 97001 (Physical Therapy Evaluation), which has a
work RVU of 1.20 and an intra-service time of 30 minutes. Commenters
stated that it was, therefore, comparable to the requested 0.45 for 12
minutes of intra-service work for CPT code 92587. Commenters requested
that we accept the HCPAC-

[[Page 69024]]

recommended work RVU of 0.45 for CPT code 92587 and requested
refinement panel review of the code.
Response: Based on comments received, we referred CPT code 92587 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median value for CPT code 92587 was a work RVU of
0.45. We note that prior to our assignment of interim final work RVUs
for CY 2012, CPT code 92587 had a work RVU of 0.13 because the work of
this service was captured in the practice expense RVU as clinical
labor, rather than in the work RVU as professional work. For CY 2012,
the work of this service was moved from the PE RVU to the work RVU. In
re-valuing the service to reflect this shift, we believe the survey
25th percentile work RVU of 0.35 captured the intensity of the
professional work. While CPT codes 97124 and 92587 describe different
services, we believe they involve the same time and have a very similar
level of intensity and complexity and therefore should be valued the
same. After consideration of the public comments, refinement panel
results, and our clinical review, we are finalizing a work RVU of 0.35
for CPT code 92587.
On an interim final basis for CY 2012, we assigned a work RVU of
0.55 to CPT code 92588 (Distortion product evoked otoacoustic
emissions; comprehensive diagnostic evaluation (quantitative analysis
of outer hair cell function by cochlear mapping, minimum of 12
frequencies), with interpretation and report) (76 FR 73202). After
clinical review of CPT code 92588, we believed that the survey 25th
percentile work RVU of 0.55 accurately described the work associated
with this service. The HCPAC reviewed the survey results, and after a
comparison to similar CPT codes, recommended the survey median work RVU
of 0.62 for CPT code 92588. We believed that CPT code 92588 is similar
in work to CPT code 92570 (Acoustic immittance testing, includes
tympanometry (impedance testing), acoustic reflex threshold testing,
and acoustic reflex decay testing), which has a work RVU of 0.55, and
that the survey 25th percentile work RVU of 0.55 appropriately
reflected the relativity of this service. Therefore, we assigned a work
RVU of 0.55 to CPT code 92588 on an interim final basis for CY 2012.
Comment: Commenters agreed with us that CPT code 92588 involves a
higher level of professional work and should be valued incrementally
higher than CPT code 92587. However, commenters disagreed with the
interim final work RVU values and believe the services furnished under
the code involve a greater degree of professional work. Commenters
stated that CPT code 92570 is not an appropriate comparison code
because it is a bundled code that includes three different audiology
tests, acoustic reflex threshold testing and acoustic reflex decay, as
currently represented individually by CPT codes 92567 and 92568. As a
bundled service, the work RVU for 92570 was reduced below the level of
the combined services to account for efficiencies involved in
conducting the three tests together. Commenters noted it is not
appropriate to compare a bundled service, for which the work RVU has
been reduced, with a test intended to evaluate overall outer hair cell
function, using a minimum of 12 frequencies. Therefore, commenters
requested the code be reviewed by the refinement panel.
Response: Based on comments received, we referred CPT code 92588 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median value for CPT code 92588 was a work RVU of
0.60. We note that prior to our assignment of interim final work RVUs
for CY 2012, CPT code 92588 had a work RVU of 0.36 because the work of
this service was captured in the practice expense RVU as clinical
labor, rather than in the work RVU as professional work. For CY 2012,
the work of this service was moved from the PE RVU to the work RVU. In
re-valuing the service to reflect this shift, we believe the survey
25th percentile work RVU of 0.55 captured the intensity of the
professional work. While CPT codes 92570 is a bundled service, we
believe CPT codes 92570 and 92588 involve very similar time and
intensity and should be valued the same. Furthermore, we believe a work
RVU of 0.55 for CPT code 92588 reflects the appropriate incremental
difference over the work RVU of 0.35 for CPT code 92587. After
consideration of the public comments, refinement panel results, and our
clinical review, we are finalizing a work RVU of 0.55 for CPT code
92588.
(20) Cardiovascular: Cardiac Catheterization (CPT Codes 93451-93568)
For CY 2012, we assigned the following interim final work RVUs for
the following CPT codes: 2.72 for CPT code 93451 (Right heart
catheterization including measurement(s) of oxygen saturation and
cardiac output, when performed), 4.75 for CPT code 93452 (Left heart
catheterization including intraprocedural injection(s) for left
ventriculography, imaging supervision and interpretation, when
performed), 6.24 for CPT code 93453 (Combined right and left heart
catheterization including intraprocedural injection(s) for left
ventriculography, imaging supervision and interpretation, when
performed), 4.79 for CPT code 93454 (Catheter placement in coronary
artery(s) including intraprocedural injection(s) for coronary
angiography, imaging supervision and interpretation), 5.54 for CPT code
93455 (with catheter placement(s) in bypass graft(s) (internal mammary,
free arterial, venous grafts) including intraprocedural injection(s)
for bypass graft angiography with catheter placement(s) in bypass
graft(s) (internal mammary, free arterial, venous grafts) including
intraprocedural injection(s) for bypass graft angiography), 6.15 for
CPT code 93456 (Catheter placement in coronary artery(s) including
intraprocedural injection(s) for coronary angiography, imaging
supervision and interpretation with right heart catheterization), 6.89
for CPT code 93457 (Catheter placement in coronary artery(s) including
intraprocedural injection(s) for coronary angiography, imaging
supervision and interpretation with catheter placement(s) in bypass
graft(s) (internal mammary, free arterial, venous grafts) including
intraprocedural injection(s) for bypass graft angiography and right
heart catheterization), 5.85 for CPT code 93458 (Catheter placement in
coronary artery(s) including intraprocedural injection(s) for coronary
angiography, imaging supervision and interpretation with left heart
catheterization including intraprocedural injection(s) for left
ventriculography, when performed), 6.60 for CPT code 93459 (Catheter
placement in coronary artery(s) including intraprocedural injection(s)
for coronary angiography, imaging supervision and interpretation with
left heart catheterization including intraprocedural injection(s) for
left ventriculography, when performed, catheter placement(s) in bypass
graft(s) (internal mammary, free arterial, venous grafts) with bypass
graft angiography), 7.35 for CPT code 93460 (Catheter placement in
coronary artery(s) including intraprocedural injection(s) for coronary
angiography, imaging supervision and interpretation with right and left
heart catheterization including intraprocedural injection(s) for left
ventriculography, when performed), 8.10 for CPT code 93461 (Catheter
placement in coronary artery(s) including intraprocedural injection(s)
for coronary angiography, imaging supervision and interpretation with
right and left heart catheterization including intraprocedural
injection(s) for left ventriculography, when

[[Page 69025]]

performed, catheter placement(s) in bypass graft(s) (internal mammary,
free arterial, venous grafts) with bypass graft angiography), 1.11 for
CPT code 93563 (Injection procedure during cardiac catheterization
including image supervision, interpretation, and report; for selective
coronary angiography during congenital heart catheterization), 1.13 for
CPT code 93564 (Injection procedure during cardiac catheterization
including image supervision, interpretation, and report; for selective
coronary angiography during congenital heart catheterization for
selective opacification of aortocoronary venous or arterial bypass
graft(s) (eg, aortocoronary saphenous vein, free radial artery, or free
mammary artery graft) to one or more coronary arteries and in situ
arterial conduits (eg, internal mammary), whether native or used for
bypass to one or more coronary arteries during congenital heart
catheterization, when performed), 0.86 for CPT code 93565 (Injection
procedure during cardiac catheterization including image supervision,
interpretation, and report; for selective coronary angiography during
congenital heart catheterization for selective left ventricular or left
arterial angiography), 0.86 for CPT code 93566 (Injection procedure
during cardiac catheterization including image supervision,
interpretation, and report; for selective coronary angiography during
congenital heart catheterization for selective right ventricular or
right atrial angiography), 0.97 for CPT code 93567 (Injection procedure
during cardiac catheterization including image supervision,
interpretation, and report; for selective coronary angiography during
congenital heart catheterization for supravalvular aortography), and
0.88 for CPT code 93568 (Injection procedure during cardiac
catheterization including image supervision, interpretation, and
report; for selective coronary angiography during congenital heart
catheterization for pulmonary angiography). As discussed in the CY 2011
final rule with comment period, the AMA RUC provided CMS with
recommendations for several categories of new diagnostic cardiac
catheterization services codes that previously were reported under
multiple component codes. These AMA RUC-recommended values for the
comprehensive diagnostic cardiac catheterization codes did not appear
to reflect the efficiencies in work and/or PE that occur when component
services are furnished together. The AMA RUC generally recommended the
lower of either the sum of the current RVUs for the component services
or the specialty society survey 25th percentile value for the
comprehensive cardiac catheterization. In most cases, the AMA RUC's
recommendation for the comprehensive service was actually the sum of
the current work RVUs for the component services, and we stated in the
CY 2011 final rule with comment period that we were unsure how this
approach is resource-based with respect to physician work. As we noted
in the CY 2011 final rule with comment period, in valuing these
comprehensive services, we used a conservative estimate of 10 percent
for the work efficiencies we would expect to occur when multiple
component cardiac catheterization services are bundled together. In the
CY 2011 final rule with comment period, we requested that the AMA RUC
reexamine the cardiac catheterization codes.
As discussed in the CY 2012 final rule with comment period (76 FR
73202), the AMA RUC reviewed these codes again for CY 2012 and
reiterated its previous recommendations, maintaining that there are
negligible work efficiencies gained in the bundling of these services.
However, we continued to believe that there would be efficiencies when
these services are performed together that should be reflected in the
values assigned. In lieu of a more specific estimate from the AMA RUC,
and using the best information available to us at the time, we noted
that we believed it was appropriate to assign as interim final for CY
2012 the AMA RUC CY 2011 recommendation with a 10 percent reduction in
work to reflect the efficiencies described above.
Comment: Commenters noted that at CMS's second request, the AMA RUC
workgroup reviewed significant documentation of the valuation and
coding history of the codes and after this extensive review, still
found the original work value recommendations for these codes to be
appropriate. Commenters stated that maintaining the diagnostic
catheterization codes at their CY 2011 work RVU levels is arbitrary and
that instead we should accept the AMA RUC recommendation for these new
set of codes for diagnostic cardiac catheterization.
Response: Based on the comments we received, we re-reviewed the
cardiac catheterization codes (CPT codes 93451 through 93568). We
appreciate that the AMA RUC reviewed the code set again; however, we
still maintain that there are work efficiencies gained in the bundling
of these services, and all services. The AMA RUC used a variety of
methodologies in developing RVUs for the comprehensive services
reviewed for CY 2012. The AMA RUC-recommended RVUs for the
comprehensive codes for diagnostic cardiac catheterization were an
average of only one percent lower than the original component codes.
Given that the AMA RUC recommendations for the bundling of endovascular
revascularization and CT codes resulted in average reductions in the
RVUs of 27 percent and 25 percent, respectively, we continue to believe
an approximation of work efficiencies garnered through the bundling of
the component codes could be as high as 27 percent. Thus, in the
absence of more precise information, we believe that a 10 percent
reduction in the AMA RUC-recommended work RVUs is an appropriate and
conservative approximation of these efficiencies. Therefore, we are
finalizing the CY 2012 interim final values for the cardiac
catheterization codes as the final work RVU values for CY 2013.
Specifically, we are finalizing the following work RVUs for the
following CPT codes: a work RVU of 2.72 for CPT code 93451; a work RVU
of 4.75 for CPT code 93452; a work RVU of 6.24 for CPT code 93453; a
work RVU of 4.79 for CPT code 93454; a work RVU of 5.54 for CPT code
93455; a work RVU of 6.15 for CPT code 93456; a work RVU of 6.89 for
CPT code 93457; a work RVU of 5.85 for CPT code 93458; a work RVU of
6.60 for CPT code 93459; a work RVU of 7.35 for CPT code 93460; a work
RVU of 8.10 for CPT code 93461; a work RVU of 1.11 for CPT code 93563;
a work RVU of 1.13 for CPT code 93564; a work RVU of 0.86 for CPT code
93565; a work RVU of 0.86 for CPT code 93566; a work RVU of 0.97 for
CPT code 93567; and a work RVU of 0.88 for CPT code 93568.
(21) Pulmonary: Other Procedures (CPT Codes 94060, 94726-94729)
CPT code 94060 (Bronchodilation responsiveness, spirometry as in
94010, pre- and post-bronchodilator administration) was assigned an
interim final work RVU of 0.26 in the CY 2012 final rule with comment
period (76 FR 73206). After CPT code 94060 was identified for review
because it was on the Multispecialty Points of Comparison List, and
also was identified as potentially misvalued through Codes Reported
Together 75 percent or More screen, the CPT Editorial Panel reviewed
the code and created CPT codes 94060, 94726 (Plethysmography for
determination of lung volumes and, when performed, airway resistance),
94727 (Gas dilution or washout for determination of lung volumes and,
when performed, distribution of ventilation and closing volumes), 94728
(Airway resistance by impulse

[[Page 69026]]

oscillometry), and 94729 (Diffusing capacity (eg, carbon monoxide,
membrane) (List separately in addition to code for primary procedure)).
For CY 2012, the CPT Editorial Panel also created CPT codes 94780 and
94781 to report car seat testing administered to the patient in the
private physician's office.
For CY 2012, we assigned a work RVU of 0.26 to CPT codes 94060,
94726, 94727, and 94728 on an interim final basis (76 FR 73206). After
clinical review, we determined that CPT codes 94060, 94726, 94727, and
94728, involve similar work and should have the same work RVUs. We
noted that CPT code 94240 (Functional residual capacity or residual
volume: helium method, nitrogen open circuit method, or other method)
(work RVU=0.26) was deleted and the utilization associated with that
service would be captured under the CPT codes 94726 and 92727. We also
noted that we believed that a work RVU of 0.26 appropriately reflected
the work associated with CPT codes 94060, 94726, 94727, and 94728 and
that the AMA RUC had recommended the same work RVU (0.31) for all four
codes, based upon each survey's 25th percentile work RVU. We explained
that this value was further supported by CPT code 97012 (Application of
a modality to 1 or more areas; traction, mechanical), which has a work
RVU of 0.25) and which had similar time and intensity. Therefore, we
assigned a work RVU of 0.26 to CPT codes 94060, 94726, 94727, and 94728
on an interim final basis for CY 2012.
Comment: Commenters disagreed with the work RVU assignments for
these codes and stated that CPT code 94375 (Respiratory flow volume
loop), which has a work RVU of 0.31, is the appropriate reference code,
as the AMA RUC recommended. Although CPT code 94375 has more intra-
service time (7 minutes compared to 5 minutes), the survey respondents
rated the surveyed codes as more intense and complex than the reference
code. Commenters stated that the appropriate value for the level of
physician work involved in CPT codes 94060, 94726, 94727, and 94728 is
0.31 work RVUs. Therefore, commenters urged that we value CPT codes
94060, 94726, 94727, and 94728 based upon the AMA RUC-recommended work
RVU of 0.31 and requested these codes be reviewed by the refinement
panel.
Response: Based on comments received, we referred CPT codes 94060,
94726, 94727, and 94728 to the CY 2012 multi-specialty refinement panel
for further review. The refinement panel median work RVUs for the CPT
codes were 0.27, 0.26, 0.26, and 0.26, respectively. As a result of the
refinement panel ratings and our clinical review, we are assigning a
work RVU of 0.27 as the final value for CPT code 94060 and 0.26 work
RVUs as the final value for CPT code 94726, 94727, and 94728.
After clinical review of CPT code 94729 (Diffusing capacity (eg,
carbon monoxide, membrane) (List separately in addition to code for
primary procedure)), we believed that a work RVU of 0.17 accurately
reflected the work associated with this service. Based on a comparison
to similar services, the AMA RUC recommended a work RVU of 0.19. We
believed that CPT code 94010 (Spirometry, including graphic record,
total and timed vital capacity, expiratory flow rate measurement(s),
with or without maximal voluntary ventilation), which has a work RVU of
0.17, was similar in time and intensity to CPT code 94729, and that the
codes should have the same work RVUs. Therefore, we assigned a work RVU
of 0.17 to CPT code 94729 on an interim final basis for CY 2012.
Comment: Commenters disagreed that CPT code 94010 was similar in
time and intensity to CPT code 94729, explaining that the service
furnished under CPT code 94010, simple spirometry, is considered the
foundation of pulmonary function testing and does not involve the same
physician work as services furnished under CPT code 94729 a diffusing
capacity including the membrane. Commenters suggested that the AMA RUC-
recommended crosswalk code 93352 (Use of echocardiographic contrast
agent during stress echocardiography), which has a work RVU of 0.19 has
identical physician time of 5 minutes and comparable physician work and
intensity to CPT code 94729. Commenters requested that we value the
code based upon the AMA RUC-recommended work RVU of 0.19 for CPT code
94729 and requested this code be reviewed by the refinement panel.
Response: Based on comments received, we referred CPT code 94729 to
the CY 2012 multi-specialty refinement panel for further review. The
refinement panel median work RVU for CPT code 94729 was 0.19. As a
result of the refinement panel ratings and our clinical review, we are
finalizing a work RVU of 0.19 for CPT code 94729.
Furthermore, for CY 2013, we received no public comments on the CY
2012 interim final work RVUs for CPT codes 94780 and 94781. We believe
these values continue to be appropriate and are finalizing them without
modification.
(22) Neurology and Neuromuscular Procedures: Autonomic Function Tests
(CPT Codes 95938-95939)
For discussion on interim work values for CPT codes 95938 and
95939, refer to section III.M.3. of this final rule with comment
period.
(23) Central Nervous System Assessments/Tests (CPT Codes 96110, HCPCS
Code G0451)
For CY 2012, the CPT Editorial Panel revised CPT code 96110
(Developmental screening, with interpretation and report, per
standardized instrument form) to reflect current practice and avoid use
of inaccurate terms associated with this code. For CY 2012 we created
HCPCS code G0451 (Development testing, with interpretation and report,
per standardized instrument form) to replace CPT code 96110, which is
discussed in the CY 2012 final rule with comment period (76 FR 73265).
In the CY 2012 final rule correction notice (77 FR 227), we noted that
the discussion of CPT codes 96110 and G0451 was omitted from the CY
final rule with comment period due to an inadvertent error, and we
included our intended discussion in subsequent the correction notice.
Additionally, we corrected the PFS status indicator in Addendum B for
CPT code 96110 to N (Non-covered service. These codes are noncovered
services. Medicare payment is not made for these codes. If RVUs are
shown, they are not used for Medicare payment.), from X (Statutory
exclusion. These codes represent an item or service that is not within
the statutory definition of ``physicians' services'' for PFS payment
purposes (for example, ambulance services). No RVUs are shown for these
codes and no payment may be made under the PFS.). The discussion and
information in this section reflects the changes made in CY 2012 final
rule correction notice.
The CPT Editorial Panel revised the long descriptor for CPT code
96110 from (Developmental testing; limited (for example, Developmental
Screening Test II, Early Language Milestone Screen), with
interpretation and report) to (Developmental screening, with
interpretation and report, per standardized instrument form), effective
January 1, 2012. With this change, we believed that the services
described by CPT code 96110 consisted of screening services, and thus
was not within the scope of benefits of the Medicare program, as
defined by the Act. Therefore, we assigned CPT code 96110 a PFS
procedure status indicator of N. To continue to make payment under the
PFS for the testing services described

[[Page 69027]]

under CPT code 96110 prior to revision of the long descriptor, we
created HCPCS code G0451 (Developmental testing, with interpretation
and report, per standardized instrument form). To calculate resource-
based RVUs for HCPCS code G0451, we crosswalked the utilization, direct
practice expense inputs, and malpractice risk factor from CPT code
96110 to HCPCS code G0451. We noted in the CY 2012 final rule with
comment period that CPT code 96110 did not have physician work RVUs,
therefore no physician work RVUs had been assigned to HCPCS code G0451.
The CY 2012 interim final RVUs assigned to G0451 were included in
Addendum B of the CY 2012 final rule correction notice.
Comment: We received notice from many commenters that they did not
believe a procedure status of X was appropriate for CPT code 96110.
Commenters stated that the change in the code description from
``developmental testing; limited'' to ``developmental screening''
should not preclude payment for this service. Additionally, other
commenters raised concerns that this code is used for early
developmental screening in pediatric offices and worried that our
decision not to cover this code under the Medicare program would
influence Medicaid coverage. Commenters recommended that this testing
service should continue to be paid under the Medicare PFS.
Response: We thank commenters for bringing the error in the status
indicator for CPT code 96110 to our attention. As noted above, we
corrected the PFS status indicator in a correction notice (77 FR 227)
to N (Noncovered service. These codes are noncovered services. Medicare
payment may not be made for these codes. If RVUs are shown, they are
not used for Medicare payment) is more appropriate for this code.
Regarding commenters concern that the testing services previously
reported under CPT code 96110 continue to be payable, we point out that
while these service are no longer payable using CPT code 96110, they
continue to be payable using HCPCS code G0451, effective January 1,
2012. We understand that our lack of discussion of these services in
the CY 2012 PFS final rule with comment period may have furthered this
concern. We received no public comments on the CY 2012 interim final
work RVUs for HCPCS code G0451. We believe these values continue to be
appropriate and are finalizing them without modification.
b. Finalizing CY 2012 Interim Direct PE Inputs
i. Background and Methodology
In this section, we address interim final direct PE inputs as
presented in the CY 2012 PFS final rule with comment period and
displayed in the final CY 2012 direct PE database available on the CMS
Web site under the downloads at http://www.cms.gov/PhysicianFeeSched/PFSFRN/list.asp#TopOfPage.
On an annual basis, the AMA RUC provides CMS with recommendations
regarding direct PE inputs, including clinical labor, supplies, and
equipment, for new, revised, and potentially misvalued codes. We review
the AMA RUC-recommended direct PE inputs on a code-by-code basis,
including the recommended facility PE inputs and/or nonfacility PE
inputs, as clinically appropriate for the code. We determine whether we
agree with the AMA RUC's recommended direct PE inputs for a service or,
if we disagree, we refine the PE inputs to represent inputs that better
reflect our estimate of the PE resources required for the service in
the facility and/or nonfacility settings. We also confirm that CPT
codes should have facility and/or nonfacility direct PE inputs, and
make changes based on our clinical judgment and any PFS payment
policies that would apply to the code.
As we explained in the CY 2012 PFS final rule (76 FR 73212), we
generally only establish interim final direct PE inputs for services
when we receive direct PE input recommendations in the context of new,
revised or potentially misvalued codes. However, for CY 2012, we
established interim final direct PE inputs for several codes for which
we did not receive direct PE recommendations. In the case of these
codes, we believed it was necessary to establish new interim final
direct PE inputs in order to maintain appropriate relativity among
those codes and other related codes or between the PE, work and
malpractice components of the PFS payment for the codes.
Comment: Several commenters stated that they understood CMS'
rationale for refining the direct PE inputs on an interim final basis
as we explained above, but urged CMS to bring the AMA RUC's attention
to these codes during the AMA RUC process so that these interim final
refinements by CMS could be avoided.
Response: We appreciate the commenters' suggestion. We also
encourage the AMA RUC and other public commenters to consider issues
related to maintaining appropriate relativity among related codes or
between the PE, work, and malpractice components of the PFS payment for
individual codes in the development of the recommendations that they
provide to us. We believe that the AMA RUC and medical specialty
societies, in light of CPT code descriptors and other language, as well
as the guiding principles established through PFS rulemaking, are in a
good position to identify, review, and develop direct PE input
recommendations for coherent sets of codes, including component and
combined codes, that ought to be developed or updated concurrently.
In the CY 2012 PFS final rule with comment period (76 FR 73213), we
addressed the general nature of some of our common refinements to the
AMA RUC-recommended direct PE inputs as well as the reasons for
refinements to particular inputs. In the following subsections, we
respond broadly to comments we received regarding common refinements we
made based on established principles or policies. Following those
discussions, we summarize and respond to comments received regarding
other refinements to particular codes.
We note that the interim final direct PE inputs for CY 2012 that
are being finalized for CY 2013 are displayed in the final CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/. The inputs displayed there have also been used in
developing the CY 2013 PE RVUs as displayed in Addendum B of this final
rule.
We also note that for several codes for which we established
interim final direct PE inputs for CY 2012, we either made proposals in
the CY 2013 PFS proposed rule with comment period as a result of those
comments or we are establishing CY 2013 interim final direct PE inputs
for the services based on new recommendations from the AMA RUC. We
acknowledge receipt of those comments here and we note that those
comments were taken into consideration in the development of CY 2013
PFS proposals and our consideration of the CY 2013 AMA RUC direct PE
input recommendations.
ii Common Refinements
(1) Equipment Time
Prior to CY 2010, the AMA RUC did not generally provide CMS with
recommendations regarding equipment time inputs. In CY 2010, in the
interest of ensuring the greatest possible degree of accuracy in
allocating equipment minutes, we requested that the AMA

[[Page 69028]]

RUC provide equipment times along with the other direct PE
recommendations, and we provided the AMA RUC with general guidelines
regarding appropriate equipment time inputs. We continue to appreciate
the AMA RUC's willingness to provide us with these additional inputs as
part of its direct PE recommendations.
In general, the equipment time inputs correspond to the intra-
service portion of the clinical labor times. We have clarified that
assumption to consider equipment time as the sum of the times within
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. In addition, when a piece of equipment is
typically used during additional visits included in a service's global
period, the equipment time should also reflect that use.
We believe that certain highly technical pieces of equipment and
equipment rooms are less likely to be used during all of the pre-
service or post-service tasks performed by clinical labor on the day of
the procedure (the clinical labor service period) and are typically
available for other patients even when one member of clinical staff may
be occupied with a pre-service or post-service task related to the
procedure.
Some commenters have repeatedly objected to CMS' rationale for
refinement of equipment minutes on this basis. We acknowledge the
comments we received that reiterate those objections to this rationale
and refer readers to our extensive discussion regarding those
objections in the CY 2012 PFS final rule with commenter period (76 FR
73182). In following paragraphs we address new comments on this policy.
Comment: One commenter suggested that ``CMS allows only a single
staff type'' for certain services, so that when pre-service and post-
service clinical labor tasks are assigned only to one type of clinical
labor (a CT technologist, for example), the equipment otherwise used by
that technologist (the CT room) is necessarily unavailable to another
patient. Therefore, the commenter argued that in those cases CMS should
also allocate the total number of minutes for all the clinical labor
tasks on the day of the service to the CT room regardless of whether or
not it is typical for the pre-service or post-service activities to
actually take place in the room.
Response: We understand the commenter's argument, but we do not
agree with the conclusion for several reasons. First, we do not agree
that allocating a number of minutes to a particular type of clinical
staff in the direct PE input database can be appropriately viewed as
CMS ``allowing only a single staff type'' being used to furnish
services to Medicare beneficiaries. We believe that the direct PE input
database should reflect the resources typically required in furnishing
particular services, but we have no reason to believe that the inputs
included in the database are prescriptive as to what actually happens
in a medical practice. Therefore, we do not think the direct PE
database staff type is likely to be a determining factor for the
division of labor in physician offices and other nonfacility settings.
Furthermore, we do not believe that most free-standing centers that
furnish highly technical services to Medicare beneficiaries typically
only employ one clinical staff member at a time. Therefore, it would
not be reasonable to assume that all capital equipment in a typical
practice is unavailable for use whenever pre- or post-service tasks are
being undertaken by any individual technologist.
We also note that there are hundreds of services in the direct PE
input database that include more than one type of staff in the clinical
labor inputs. For many services, for example, minutes are allocated for
a standard nurse blend staff type for pre-service and post-service
tasks, while technologists are only allocated intra-service period
minutes. There is no standing CMS policy that would prevent
consideration of dividing clinical labor tasks among different types of
clinical labor in the direct PE input database.
Comment: One commenter expressed a concern regarding the
relationship between the CMS refinement of recommended equipment
minutes and the 75% equipment utilization rate assumption mandated by
section 1848(b)(4)(C) of the Act. The commenter also stated that these
refinements are arbitrary and will further widen the gap between
Medicare payments determined by the Medicare hospital outpatient
prospective payment system (OPPS) and the technical component of PFS
services.
Response: As we have previously stated, we believe that many of the
pre-service and post-service clinical labor tasks typically take place
outside of resource-intensive equipment rooms to maximize use of
capital-intensive resources. Monopolizing the room for fewer minutes
per patient maximizes the availability of the machines. In turn, the
assumed rate of use for the machine should be greater, and the resource
cost of the machine is reduced through these efficiencies. Since the
direct PE input database should reflect the typical resource costs of
medical equipment, we believe that the reduced minutes and increased
utilization rate are complementary, not contradictory.
In response to the commenter's second assertion, these refinements
are far from arbitrary. We have consistently applied these principles
in refining the direct PE inputs for services as we review equipment
inputs through the potentially misvalued code initiative and our review
of new and revised codes since the AMA RUC started providing equipment
minute recommendations to CMS in 2010. We believe that imprecise
allocation of equipment minutes may be a significant factor in certain
potentially misvalued codes. We understand the importance of relativity
within the equipment category of direct practice expenses and seek
public comment on whether it might be necessary to consider making
corresponding refinements to equipment minutes for services across the
fee schedule for the sake of maintaining relativity.
Finally, as a general statement, differences in payment rates
between different payment systems do not necessarily indicate a lack of
appropriate relativity within each system. There can be legitimate
reasons why a payment rate should vary in different payment systems
(for example, higher indirect costs, different payment bundles).
Nevertheless, excessive differences in payment rates between payment
systems can be one indication of the need to examine the relativity
between services in one or both systems. While we continue to examine
this issue, we do not believe that it would be appropriate to establish
or maintain inaccurate direct PE inputs for these services based on
comparisons between the PFS and OPPS payment rates.
We will continue to work to improve the accuracy of the equipment
minutes as reflected in the direct PE input database and will address
any further improvements in future rulemaking.
After consideration of these comments, we are finalizing the
current interim final direct PE inputs as refined based on this policy.
The direct PE inputs are displayed in the final CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.

[[Page 69029]]

(2) Changes in Physician Time
Some direct PE inputs are directly affected by revisions in
physician time. Specifically, changes in the intra-service portions of
the physician time and changes in the number or level of postoperative
visits associated with the global periods result in corresponding
changes to direct PE inputs. While the direct PE input recommendations
generally correspond to the physician time values associated with
services, we believe that in some cases inadvertent discrepancies
between physician time values and direct PE inputs should be refined in
the establishment of interim final direct PE inputs. In other cases,
CMS refinement of recommended interim final physician times prompts
necessary adjustments in the direct PE inputs. In the context of our
establishment of interim final direct PE inputs for CY 2013, we explain
those refinements in section III.M.3.b of this final rule with comment
period.
Comment: One commenter requested an explanation regarding why CMS
assumes that the clinical time allocated for assisting the physician
performing the procedure should conform to the physician intra-service
time.
Response: As we have explained in previous rulemaking (76 FR
73213), for most codes valued in the nonfacility setting, a portion of
the clinical labor time allocated to the intra-service period reflects
minutes assigned for assisting the physician with the procedure. This
time is usually allocated at some proportion of the physician time for
a procedure. Frequently, the allocation is for the full physician
intraservice time; this reflects the assumption that the clinical staff
is assisting the physician during the entire procedure. For other
services, the allocation is two-thirds or one-half of the physician
time; this reflects the assumption that clinical staff is assisting the
physician for a portion of the procedure time. In establishing interim
final direct PE inputs, we note a change in clinical labor time (or
corresponding change in equipment minutes) that results from a change
in physician time as ``conforming to physician time.'' This note is not
used to reflect a refinement to the recommended proportion for which
the staff is assisting the physician performing the procedure. Instead,
these refinements reflect a change in the base procedure time
assumption for the service. After consideration of this comment, we are
finalizing the current interim final direct PE inputs as refined based
on this policy. The direct PE inputs are displayed in the final CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(3) Proxy Inputs for Digital Imaging
Comment: In the context of several codes, several commenters
objected to CMS' not accepting certain recommended items as direct PE
inputs since these items, though atypical, may be considered surrogate
items for digital imaging technology.
Response: A variety of imaging services across the PFS include
direct PE inputs that reflect film-based technology instead of digital
technology. We have accepted the film-based technology inputs in the
RUC recommendations as proxy inputs until a more comprehensive
migration of such inputs from film to digital imaging can be executed.
We anticipate updating all of the associated inputs in future
rulemaking.
After consideration of these comments, we are finalizing the
current interim final direct PE inputs as refined based on this policy.
The direct PE inputs are displayed in the final CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
iii Code-Specific Direct PE Inputs
(1) Integumentary System: Repair (Closure) (CPT Codes 15271, 15273,
15275, 15277)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendation for CPT codes 15271 (Application
of skin substitute graft to trunk, arms, legs, total wound surface area
up to 100 sq cm; first 25 sq cm or less wound surface area), 15273
(Application of skin substitute graft to trunk, arms, legs, total wound
surface area greater than or equal to 100 sq cm; first 100 sq cm wound
surface area, or 1% of body area of infants and children), 15275
(Application of skin substitute graft to face, scalp, eyelids, mouth,
neck, ears, orbits, genitalia, hands, feet, and/or multiple digits,
total wound surface area up to 100 sq cm; first 25 sq cm or less wound
surface area), and 15277 (Application of skin substitute graft to face,
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/
or multiple digits, total wound surface area greater than or equal to
100 sq cm; first 100 sq cm wound surface area, or 1% of body area of
infants and children) to allocate the full service period minutes to
the basic instrument pack (EQ137) by reducing the equipment allocation
by 3 minutes to account for the overlapping time for cleaning the room
and the pack.
Comment: One commenter disagreed with CMS' reduction of the
recommended minutes and stated that since the pack is unavailable for
other patients while the room is being cleaned, the pack should be
allocated the full number of service period clinical labor minutes,
including the time for cleaning both the room and the pack. The
commenter also stated that cleaning of the instruments is discrete
work, most often done after the patient's departure.
Response: Since clinical labor is allocated a specific number of
minutes for cleaning surgical instrument packs, we do not believe that
we should also allocate the clinical labor minutes for cleaning the
other equipment associated with the services. Because we agree with the
commenter that the task is discrete from the cleaning associated with
the other equipment and the room itself, we do not think that the
instrument pack is unavailable when the room is being cleaned.
CMS also refined the recommended direct PE inputs for CPT codes
15273 and 15275 by not including the post-op incision care (suture)
pack (SA054) in each code because the code itself does not describe
post-op care.
Comment: One commenter disagreed with the refinement and pointed
out that CPT guidelines state: ``Skin replacement surgery consists of
surgical preparation and topical placement of an autograft (including
tissue cultured autograft) or skin substitute graft (ie, homograft,
allograft, xenograft). The graft is anchored using the provider's
choice of fixation. When services are performed in the office, routine
dressing supplies are not reported separately. Removal of current graft
and/or simple cleansing of the wound is included, when performed.'' The
commenter also noted that CPT codes 15273 and 15277 typically involve
large grafts that will be anchored by sutures, and although these codes
have a 0-day global period, removal of the graft is included in the
work and therefore a suture removal kit is appropriate as a supply
item.
Response: Based on the rationale presented by the commenters, CMS
agrees that one pack should be included as a supply item for CPT codes
15273 and 15277. After consideration of the comments received, we are
finalizing the direct PE inputs for CPT codes 15271, 15273, 15275, and
15277 as established as interim final with the additional refinement of
incorporating the supply item discussed above for CPT codes 15273 and
15277.

[[Page 69030]]

(2) Musculoskeletal: General: Introduction or Removal (CPT Code 20527)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendation for CPT code 20527 (Injection,
enzyme (eg, collagenase), palmar fascial cord (ie, dupuytren's
contracture)) by including a minimum multi-specialty visit pack (SA048)
as a direct PE input for the service.
Comment: A commenter presented information indicating that the
multi-specialty pack is not typically used in furnishing the service.
Response: We agree with the information presented by the commenter.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT code 20527 as established as interim final with the
additional refinement of removing the supply item discussed above. The
direct PE inputs are displayed in the final CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(3) Musculoskeletal: Spine (Vetebral Column) (CPT Code 22525)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendation for CPT code 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 (eg, kyphoplasty);
each additional thoracic or lumbar vertebral body (list separately in
addition to code for primary procedure))by not including additional
clinical labor and equipment time for preparing the room, equipment,
and supplies since the CPT code 22525 is an add-on code and time for
those tasks is already included in the base code.
Comment: A commenter disagreed with the removal of 2 minutes for
preparing the room, equipment, and supplies and stated that since the
add-on code requires more equipment than the base code the direct PE
inputs should include additional minutes for preparing that equipment.
Response: Based on our clinical review, we believe that the
standard number of minutes allocated for the clinical labor to prepare
the room, equipment, and supplies in the base code approximates the
typical number of minutes for such tasks including the cases where the
add-on code is necessary. Were the minutes accounted for separately in
the add-on code, the number of minutes included in the base code would
need to be re-examined. At this time, we believe that it would be more
appropriate to maintain the standard number of minutes in the base code
and not allocate additional time in the add-on code.
Comment: A commenter informed CMS that the clinical labor codes
associated with CPT Code 22525 were transposed in the direct PE input
database.
Response: We appreciate being informed of the inadvertent
assignment of labor codes.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT code 22525 as established as interim final with the
additional refinement of assigning the appropriate labor codes.
(4) Musculoskeletal: Hand and Fingers (CPT Code 26341)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendation for CPT code 26341 (Manipulation,
palmar fascial cord (ie, dupuytren's cord), post enzyme injection (eg,
collagenase), single cord) by including a minimum multi-specialty visit
pack (SA048) as a direct PE input for the service period in the
nonfacility and the same pack in both settings to account for the post-
service office visit included in the global period.
Comment: A commenter stated that while the pack was typically used
in the nonfacility setting during the service period, it is not
typically used for the post-service office visit.
Response: The allocation of the supply pack minutes in the facility
setting reflects the standard allocation of direct PE inputs based on
the office visits included in the global period for the service. We
discuss the specifics related to these standard allocations in section
III.M.3.b of this final rule with comment period. At this time, we do
not believe it would be appropriate to deviate from these standards. We
direct readers interested in the appropriate valuation of services with
global periods to section III.B.2.d of this final rule with comment
period.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT code 26341 as established as interim final. The
direct PE inputs are displayed in the final CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(5) Respiratory: Lungs and Pleura (CPT Code 32405) and Digestive: Liver
(CPT Code 47000)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT codes 32405 (Biopsy, lung
or mediastinum, percutaneous needle) and 47000 (Biopsy of liver,
needle; percutaneous) by removing minutes allocated to the CT room
(EL007) since these services are typically billed with radiological
supervision and interpretation (S&I) services.
Comment: A commenter pointed out that the CT room time included
with the S&I code 77012 is only 9 minutes, which reflects a convention
for some S&I codes. On this basis, the commenter suggested that for
these codes, the CT room should be allocated the standard number of
minutes minus the 9 minutes that overlap with the S&I code.
Response: We appreciate the commenter pointing out this allocation
of equipment minutes. We note that this convention does not apply
consistently to all S&I codes and related procedure codes. We may
address such inconsistencies in future rulemaking.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT codes 32405 and 47000 as established as interim final
with the additional refinement of including the CT room as a direct PE
input for the services, with the reduction of 9 minutes to account for
the overlapping number of minutes allocated in the S&I code.
(6) Cardiovascular: Arteries and Veins (CPT Codes 36200, 36246, 36247)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT codes 36200 (Introduction
of catheter, aorta), 36246 (Selective catheter placement, arterial
system; initial second order abdominal, pelvic, or lower extremity
artery branch, within a vascular family), and 36247 (Selective catheter
placement, arterial system; initial third order or more selective
abdominal, pelvic, or lower extremity artery branch, within a vascular
family) by reducing the number of clinical labor minutes allocated for
preparing the room, equipment, and supplies used in the service to the
standard number of minutes allocated to clinical labor for those tasks.
Comment: One commenter stated that since vascular procedures have
more variable supplies than typical procedures, more minutes for
preparing supplies should be allocated for the clinical labor direct PE
inputs.

[[Page 69031]]

Response: Upon clinical review of these procedures, we believe that
the standard number of minutes allocated for such tasks in similar
services across the direct PE input database adequately accounts for
the variability of supplies in these procedures.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT codes 36200, 36246, and 36247 as established as
interim final. The direct PE inputs are displayed in the final CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(7) Digestive: Abdomen, Peritoneum, and Omentum (CPT Code 49083)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT code 49083 (Abdominal
paracentesis (diagnostic or therapeutic); with imaging guidance) by
reducing the number of clinical labor minutes recommended for a series
of tasks to correspond with the standard minutes as allocated across
PFS services. Additionally, CMS refined the minutes allocated to the
equipment associated with the service based on the standard allocation
of minutes for highly technical and resource-intensive equipment.
Comment: A commenter suggested that 42 minutes should be allocated
to the equipment using CMS' methodologies and including the 25 minutes
corresponding to the assist physician time.
Response: We agree with the commenter that the 25 minutes is the
appropriate time allocated for assisting the physician. However, we do
not agree with the final number of minutes that should be allocated for
the equipment. Based on our standard review for such equipment, we
believe that the equipment should be allocated the minutes assumed for
preparing the room, equipment, and supplies, preparing and positioning
the patient, the procedure time itself, and the time allocated to clean
the room and the equipment. Based on the procedure-specific assist
physician time and the standard number of minutes allocated for the
additional pre-service and post-service tasks, we have calculated the
appropriate equipment minutes to sum to 32.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT code 49083 as established as interim final, with the
additional refinement of allocating 32 minutes for the equipment used
in the service. The direct PE inputs are displayed in the final CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(8) Urinary: Bladder (CPT Code 51736)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT code 51736 (Simple
uroflowmetry (ufr) (eg, stop-watch flow rate, mechanical uroflowmeter))
by adding the following supplies to the direct PE inputs for the
service based on CMS clinical review: paper towel (SK082), disinfectant
spray (SM012), and sanitizing cloth wipe (SM022).
Comment: A commenter disagreed with this refinement and suggested
instead that these supplies, as well as the digital uroflowmeter
(EQ259), should instead only be included as direct PE inputs for CPT
code 51741 (Complex uroflowmetry (eg, calibrated electronic
equipment)).
Response: Upon further clinical review, and on the basis of the
commenter's recommendation, we agree that the items should be removed
from the service.
After consideration of this comment, we are finalizing the direct
PE inputs for CPT code 51741 as established as interim final, with the
additional refinement of removing the three supply items and one
equipment item identified above. The direct PE inputs are displayed in
the final CY 2013 direct PE input database, available on the CMS Web
site under the downloads for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(9) Nervous: Extracranial Nerves, Peripheral Nerves, and Autonomic
Nervous System (CPT Codes 64633, 64635)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT code 64633 (Destruction
by neurolytic agent, paravertebral facet joint nerve(s), with imaging
guidance (fluoroscopy or ct); cervical or thoracic, single facet joint)
and 64635 (Destruction by neurolytic agent, paravertebral facet joint
nerve(s), with imaging guidance (fluoroscopy or ct); lumbar or sacral,
single facet joint) by not including the recommended radiofrequency
probe kit (SA100) as a supply item. As we explained in the CY 2012 PFS
final rule (76 FR 73214), the very expensive disposable item had not
previously been included as a direct PE input for predecessor codes
that described the same services, and the recommendation did not
include any information suggesting that such a significant resource
cost had become typical in furnishing the services. At that time, we
noted that the direct PE inputs for these codes were considered interim
for CY 2012, and we would consider any submitted information regarding
the use of this supply in furnishing these services prior to finalizing
the direct PE inputs for CY 2013.
Comment: One commenter responded to this refinement by explaining
that furnishing the service requires a radiofrequency kit, but that the
kit is reusable and typically has a useful life of several months.
Response: We appreciate the information from the commenter, though
we generally prefer additional information, including paid invoices, in
order to price supply or equipment items accurately. For CY 2013, we
believe it would be appropriate to finalize the direct PE inputs for
these services with a new equipment item based on the disposable item
included in the original recommendation and the information supplied by
the commenter. We encourage stakeholders to submit additional
information through the public process for updating prices for supplies
and equipment we established in the CY 2011 PFS final rule (75 FR
73205-73207). We believe that that process will allow us to describe
the item and assign its price and useful life more accurately.
CMS also refined the recommended direct PE inputs for CPT codes
64633 and 64635 by allocating equipment minutes in the facility setting
for the exam table (EF023) and the exam light (EQ168) based on the
post-service office visits included in the global periods.
Comment: One commenter suggested that allocating this time was not
appropriate.
Response: The allocation of equipment minutes in the facility
setting reflects the standard allocation of direct PE inputs based on
the office visits included in the global period for the service. We
discuss the specifics related to these standard allocations in section
III.M.3.b of this final rule with comment period. At this time, we do
not believe it would be appropriate to deviate from these standards. We
direct readers interested in the appropriate valuation of services with
global periods to section III.B.2.d of this final rule with comment
period.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT code 64633 and 64635 as established as interim final,
with the additional refinement of establishing this equipment item,
``radiofrequency kit for destruction by

[[Page 69032]]

neurolytic agent'' (EQ354) as a placeholder direct PE input for the
codes until we receive more information regarding the item. The direct
PE inputs are displayed in the final CY 2013 direct PE input database,
available on the CMS Web site under the downloads for the CY 2013 PFS
final rule at www.cms.gov/PhysicianFeeSched/.
(10) Diagnostic Radiology: Spine and Pelvis (CPT Code 72120, 72170)
In establishing interim final direct PE inputs for 2012, CMS
refined the direct PE inputs for CPT codes 72120 (Radiologic
examination, spine, lumbosacral; bending views only, 2 or 3 views) and
72170 (Radiologic examination, pelvis; 1 or 2 views) by reducing the
number of minutes allocated to the clinical labor for cleaning the room
and equipment to one.
Comment: A commenter disagreed with the revision and suggested that
CMS should use the standard 3 minutes for this activity.
Response: We appreciate the commenter's interest in CMS using the
standard number of minutes for clinical labor tasks. As we explained in
our refinements regarding reducing recommendations that exceeded the
standard number of minutes, we believe that the standard number of
minutes generally accommodates the range of minutes likely to be
typical for such activities. We agree that it would be appropriate to
include the standard minutes for these services.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT codes 72120 and 72170, with the additional refinement
of allocating two additional minutes to the clinical labor and the
associated equipment inputs for cleaning the room and equipment. The
direct PE inputs are displayed in the final CY 2013 direct PE input
database, available on the CMS Web site under the downloads for the CY
2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(11) Nuclear Medicine: Diagnostic (CPT Codes 78226, 78227, 78579,
78580, 78582, 78597, 78598)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT codes 78226
(Hepatobiliary system imaging, including gallbladder when present;),
78227(Hepatobiliary system imaging, including gallbladder when present;
with pharmacologic intervention, including quantitative measurement(s)
when performed), 78579 (Pulmonary ventilation imaging (eg, aerosol or
gas)), 78580 (Pulmonary perfusion imaging (eg, particulate)), 78582
(Pulmonary ventilation (eg, aerosol or gas) and perfusion imaging),
78597 (Quantitative differential pulmonary perfusion, including imaging
when performed), and 78598 (Quantitative differential pulmonary
perfusion and ventilation (eg, aerosol or gas), including imaging when
performed) by refining equipment time allocations as described in
section III.M.2.b above.
Comment: One commenter disagreed with those refinements and urged
CMS to identify the clinical labor tasks associated with the minutes
excluded from the equipment allocation.
Response: We refer the commenter to the discussion above regarding
the general principles of accurate assignment of equipment minutes. In
the case of this family of codes, we believe that it is appropriate to
allocate equipment minutes for clinical labor tasks of preparing the
room, positioning the patient, placing the IV, acquiring images during
the procedure itself, and cleaning the room, including additional
minutes of cleaning for regulatory compliance. We do not believe that
expensive equipment is typically unavailable for use for other patients
while clinical staff performs such tasks as greeting and gowning the
patient, reviewing mandatory radiation education, helping the patient
to the waiting room, completing diagnostic forms or making lab and X-
ray requisitions. The minutes allocated to the equipment in the direct
PE input database reflect the application of these principles as
specifically determined through CMS clinical review.
CMS also refined the recommended direct PE inputs for CPT codes
78226, 78227, 78579, 78580, 78582, 78597, 78598 by examining all of the
educational tasks included in the AMA RUC's recommendation and refining
the sum of those times to a total number of minutes considered accurate
under CMS clinical review. The AMA RUC recommendation included 6
minutes of education by the nuclear medicine technologist. CMS refined
the total number of minutes allocated for educational tasks to 4.
Comment: One commenter disagreed with the refinement to remove the
minutes allocated for providing patient counseling while the patient is
being taken back to the waiting area. This commenter suggested that CMS
may be confusing the recommended minutes for this task with the
concurrent recommendation to include the standard number of minutes for
patient education. The commenter suggested that since nuclear medicine
patients are radioactive when they leave departments, they require more
education than other services, especially since patients need to be
reminded about the dangers of radioactivity after they leave the
office.
Response: We agree with the commenter that it is reasonable for
more time to be allocated to these services for patient education. We
also note that our interim refinements included more education time
than typical for PFS services. However, we believe that it would be
appropriate to include a total of 5 minutes for clinical labor patient
education activities for these services in consideration of the
comments received.
CMS also refined the recommended direct PE inputs for CPT codes
78226, 78227, 78579, 78580, 78582, 78597, 78598 by examining all of the
cleaning tasks included in the AMA RUC's recommendation and refining
the sum of those times to a total number of minutes considered accurate
under CMS clinical review. The AMA RUC recommendation included 13
minutes of cleaning tasks by a nuclear medicine technologist. CMS
refined the total number of minutes allocated for educational tasks to
10.
Comment: One commenter suggested that the full 13 minutes of
cleaning per service should be allocated on a standard basis for these
codes to account for the number of minutes required to meet cleaning
regulatory cleaning standards for services that use radioactive
pharmaceuticals. The commenter also noted that this allocation has been
included in similar services.
Response: Upon clinical review, we continue to doubt that nuclear
medicine technologists typically clean the room and equipment for 13
minutes following every service. However, we acknowledge that there is
an additional cleaning burden for these services, and we also agree
with the commenter that other services that use similar substances
incorporate the same number of minutes for mandated cleaning.
Therefore, we believe it is appropriate that these services include
these additional minutes for cleaning.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT codes 78226, 78227, 78579, 78580, 78582, 78597, 78598
with the additional refinement of allocating 1 additional clinical
labor minute for patient education tasks and an additional 3 minutes to
the clinical labor and equipment items to account for mandatory
cleaning tasks. The direct PE inputs are displayed in the final CY 2013
direct PE input database, available on the CMS Web site under the
downloads for the CY 2013 PFS final

[[Page 69033]]

rule at www.cms.gov/PhysicianFeeSched/.
(12) Pulmonary: Diagnostic Testing and Therapies (CPT Codes 94728)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT code 94728 (Airway
resistance by impulse oscillometry) by adding the body plethysmograph
autobox (EQ044) as direct equipment input for the service based on the
item's inclusion as a direct PE input for related services.
Comment: One commenter noted that this code is used to describe
services furnished primarily for children and that the equipment item
cannot be used with pediatric patients.
Response: We appreciate the additional information regarding the
appropriate use of the equipment.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT code 94728 with the additional refinement of removing
the equipment item discussed above as a direct PE input for the
service. The direct PE inputs are displayed in the final CY 2013 direct
PE input database, available on the CMS Web site under the downloads
for the CY 2013 PFS final rule at www.cms.gov/PhysicianFeeSched/.
(13) Hydration, Therapeutic, Prophylactic, Diagnostic Injections and
Infusions, and Chemotherapy and Other Highly Complex Drug or Highly
Complex Biologic Agent Administration (CPT Codes 96413, 96416)
In establishing interim final direct PE inputs for 2012, CMS
refined the AMA RUC's recommendations for CPT code 96413 (Chemotherapy
administration, intravenous infusion technique; up to 1 hour, single or
initial substance/drug) by not including the 6 clinical labor minutes
in the pre-service period for completing pre-service diagnostic and
referral forms and coordinating pre-surgery services since these tasks
are not generally allocated for services without global periods.
Comment: Several commenters suggested that the recommended times
for these tasks reflects the time for the oncology nurse to document
the upcoming chemotherapy session based on the physician's orders,
coordinate the service under the physician's direction, ensure that the
planned infusion is consistent with physician's direction, and confirm
that there is no change in the drugs to be infused, anti-emetics to be
supplied, or post-treatment instructions. The commenter also noted that
the minutes allocated for those tasks in CPT code 96416 (Chemotherapy
administration, intravenous infusion technique; initiation of prolonged
chemotherapy infusion (more than 8 hours), requiring use of a portable
or implantable pump) were removed in the same recommendation in order
to account for the overlap in tasks since CPT code 96413 is typically
also reported whenever CPT code 96416 is reported.
Response: We agree with the commenter's recommendation to include
those six minutes in CPT code 96413 and exclude those minutes in CPT
code 96416, consistent with the AMA RUC recommendation.
CMS refined the recommended direct PE inputs for CPT code 96416 by
not including the 4 minutes assigned to the clinical labor for
reviewing the charts and obtain chemotherapy-related medical history.
This refinement reflected that CMS clinical review concluded that these
tasks are already accounted for in the clinical labor minutes assigned
to CPT code 96413 and would typically not be repeated when CPT code
96416 is reported.
Comment: Several commenters claimed that the nurse must perform
these tasks and that the time is appropriately valued at 4 minutes.
Response: We agree with the commenters that the time for the tasks
is appropriately estimated at 4 minutes, but we maintain our belief
that the tasks fully overlap with the same tasks associated with CPT
code 96413, which is typically also reported whenever CPT code 96416 is
reported. Therefore, we do not believe those 4 minutes should be
allocated to both services.
CMS also refined the recommended direct PE inputs for CPT code
96416 by examining all of the tasks described in the AMA RUC's
recommendation for monitoring the patient and removing the minutes that
overlap with monitoring included in CPT code 96413. This refinement
assumed no monitoring was necessary beyond the monitoring time already
associated with CPT code 96413.
Comment: One commenter objected to the refinement of the intra-
service time since the clinical labor performs the procedure.
Response: We agree with the commenter that the recommendation
reflects that the clinical staff is performing the procedure. The
rationale for our refinement of the minutes for the task ``assist
physician performing the procedure'' was described broadly as
``conforming to physician time'' in the CY 2012 PFS final rule (76 FR
73264), but was specifically intended to address the overlap in minutes
allocated for monitoring the patient following the administration. We
continue to believe that some of the 18 recommended minutes for
monitoring tasks in CPT code 96416 overlap with the 24 minutes included
in CPT code 96413 for monitoring. However, upon further clinical
review, we believe that the overlap is not complete and that it would
be appropriate to increase the total clinical labor minutes allocated
in the service period by an additional 11 minutes to account for the
additional monitoring that would typically occur when CPT code 96416 is
furnished.
After consideration of these comments, we are finalizing the direct
PE inputs for CPT codes 96413 and 96416 with the additional refinements
of including an additional 6 minutes of clinical labor time in the pre-
service period for CPT code 96413 and including an additional 11
minutes of clinical labor time in the service period for CPT code
96416. We also note that the minutes allocated to the equipment inputs
will increase based on our standard allocation policies. The direct PE
inputs are displayed in the final CY 2013 direct PE input database,
available on the CMS Web site under the downloads for the CY 2013 PFS
final rule at www.cms.gov/PhysicianFeeSched/.
For all other CY 2012 new, revised, or potentially misvalued codes
with CY 2012 interim final RVUs that are not specifically discussed in
this final rule with comment period, we are finalizing, without
modification, the interim final direct PE inputs that we initially
adopted for CY 2012.
c. Finalizing CY 2012 Interim and Proposed Malpractice Crosswalks for
CY 2013
Consistent with our malpractice methodology described in section
III.C.1. of this final rule with comment period, for the CY 2012 PFS
final rule, we assigned malpractice RVUs for CY 2012 new and revised
codes by utilizing crosswalks to source codes that have a similar
malpractice risk-of-service. After reviewing the AMA RUC-recommended
malpractice source code crosswalks for CY 2012 new and revised codes,
we accepted nearly all of them on an interim final basis for CY 2012.
As detailed in the CY 2012 final rule with comment period (76 FR 73264
through 73265), for four CPT codes describing multi-layer compression
systems, we assigned a malpractice crosswalk different from the
malpractice crosswalk recommended by the AMA RUC and HCPAC.
In the CY 2012 PFS final rule with comment period, for CPT codes
29581 (Application of multi-layer compression

[[Page 69034]]

system; leg (below knee), including ankle and foot), 29582 (Application
of multi-layer compression system; thigh and leg, including ankle and
foot, when performed), 29583 (Application of multi-layer compression
system; upper arm and forearm), and 29584 (Application of multi-layer
compression system; upper arm, forearm, hand, and fingers), we assigned
an interim final malpractice crosswalk from CPT code 97140 (Manual
therapy techniques (eg, mobilization/manipulation, manual lymphatic
drainage, manual traction), 1 or more regions, each 15 minutes). CPT
codes 29582, 29583, and 29584 were new for CY 2012. The AMA RUC
recommended, and we agreed, that the estimated utilization for CPT
codes 29582, 29583, and 29584 would have previously been reported using
CPT code 97140. After review, we believed that CPT code 97140 provides
the most appropriate malpractice source code crosswalk for CPT codes
29582, 29583, and 29584. As discussed in section III.M.3 of this CY
2013 final rule with comment period, in the CY 2012 PFS final rule with
comment period we stated that we believe CPT codes 29581, 29582, 29583,
and 29584 all describe similar services from a resource perspective,
and we assigned CPT code 29581 the same interim work RVU as CPT code
29583. Because we find these services to be so similar, we stated that
we also believed that it is appropriate for CPT codes 29581 and 29583
to have the same malpractice source code crosswalk. Therefore, we
assigned CPT code 97140 as the malpractice source code crosswalk for
CPT codes 29581, 29582, 29583, and 29584.
Additionally, for CY 2012 we created HCPCS G-code G0451
(Development testing, with interpretation and report, per standardized
instrument form) to replace CPT code 96110 (Developmental screening,
with interpretation and report, per standardized instrument form). For
CY 2012, we assigned CPT code 96110 as the malpractice source code
crosswalk for HCPCS code G0451.
In accordance with our malpractice methodology, we adjusted the
malpractice RVUs for the CY 2012 new/revised codes for the difference
in work RVUs (or, if greater, the clinical labor portion of the fully
implemented PE RVUs) between the source codes and the new/revised codes
to reflect the specific risk-of-service for the new/revised codes. The
interim final malpractice crosswalks were listed in Table 22 of the CY
2012 PFS final rule with comment period (76 FR 73266 through 73268).
We receive